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James Li
James Li
Articles (1321)  | Author's Website |

David Abrams Sells 2 Holdings, Drills Into Kinder Morgan in 2nd Quarter

Klarman student releases portfolio

August 13, 2020 | About:

David Abrams (Trades, Portfolio), founder of Abrams Capital Management, disclosed this week that he sold out of Suburban Propane Partners LP (NYSE:SPH), boosted his position in Kinder Morgan Inc. (NYSE:KMI) and eliminated over 90% of his stake in Pacific Drilling SA (NYSE:PACD) during the second quarter.

Managing a portfolio of 22 stocks, the pupil of Baupost Group manager Seth Klarman (Trades, Portfolio) seeks companies in which the CEO has a significant stake or where the CEO's salary is primarily stock-based. Abrams employs a value approach to investing.

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Suburban Propane Partners

Abrams sold 2,667,512 shares of Suburban Propane Partners, reducing the equity portfolio by 1.48%. Shares averaged $14.32 during the second quarter.

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The Whippany, New Jersey-based company distributes propane, fuel oil and other refined fuels to customers on the East Coast and West Coast. GuruFocus ranks the company's financial strength 3 out of 10 on several warning signs, which include a low Altman Z-score of 1 and an interest coverage ratio that underperforms 84.77% of global competitors.

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Kinder Morgan

Abrams purchased 2,669,942 shares of Kinder Morgan, increasing the position 27.23% and the equity portfolio 1.31%. Shares averaged $15.19 during the second quarter.

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GuruFocus ranks the Houston-based midstream energy company's profitability 6 out of 10: Even though the three-year decline rate of 0.10% underperforms 65.87% of global competitors, Kinder Morgan has a high Piotroski F-score of 7 and an operating margin that outperforms 87.31% of global energy companies.

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Gurus with large holdings in Kinder Morgan include First Pacific Advisors (Trades, Portfolio) and Steven Romick (Trades, Portfolio).

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Pacific Drilling

Abrams sold 7,008,461 shares of Pacific Drilling, dumping 94.52% of the stake. Shares averaged 52 cents during the second quarter, down significantly from the fourth-quarter 2018 average price of $1,331.62.

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GuruFocus ranks the Luxembourg-based energy company's financial strength 2 out of 10 on several warning signs, which include a low Piotroski F-score of 2 and a debt-to-equity ratio that underperforms 74.29% of global competitors.

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See also

Abrams also disclosed the removal of his holding in Allergan following the Irish drug manufacturer's merger with AbbVie Inc. (NYSE:ABBV), which closed on May 8. The equity portfolio impact is -8.63%.

Disclosure: No positions.

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About the author:

James Li
I am an editorial researcher at GuruFocus. I have a Master's in Finance from SMU, and I enjoy writing reports on financial trends and investor portfolios. Follow me on Twitter at @JamesLiGuru!

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