David Abrams (Trades, Portfolio), a former protégé of famed investor Seth Klarman (Trades, Portfolio), reported Tuesday that he made two large portfolio changes.
According to GuruFocus Real Time Picks, Abrams bought a stake in iHeartMedia (OTCPK:IHRTQ, Financial) worth 18.41% of the voting power of the company. He also boosted his stake in Camping World (CWH, Financial) for the third time in two months, increasing it by 1.85% to 4.4% of shares outstanding. The founder of Boston-based Abrams Capital has only 22 common stock positions listed in his concentrated public portfolio, valued around $3.78 billion.
Abrams’ firm, founded in 1999, relies on a value approach that emphasizes a company’s fundamentals to stocks. It typically invests for the long term and spreads its assets across stocks, debt instruments, distressed debt and illiquid investments, among other classes.
Abrams established the iHeartMedia, where he is a board member, on Dec. 14. In the 13D filing, which indicates an activist investment, Abrams Capital said it would reserve the right to “formulate and implement plans or proposals” at the company, though it did not provide further details about its strategy.
Shares of iHeartMedia, an owner of radio stations, traded for 42 cents each the date of Abrams' buy. The price represented a 15% drop from March 15, the date the heavily indebted company filed for Chapter 11 bankruptcy protection. On Dec. 3, iHeartMedia announced that it shareholders had approved the fifth amended reorganization plan that aimed to reduce debt from $10.3 billion to $5.75 billion and separate its radio and outdoor advertising businesses.
Abrams’ 16.8 million shares of the company, representing 0.19% of his long portfolio, are valued around $3.45 million.
Shares of recreational vehicle retailer Camping World dropped 66% for the year through Dec. 14, the date Abrams purchased 70,108 shares, to an average price of $15.12 each. Abrams also previously bought shares on Oct. 5 at an average price around $21 and on Dec. 10 at a price around $16.
The investor started the position in the third quarter when the price averaged $22. Worth 1.31% of the portfolio, the position is Abrams’ 16th largest.
Camping world’s stock has declined on decelerating quarterly growth in 2018. The company reported a modest 6.2% year-over-year increase in revenue to $1.31 billion in the third quarter, following growth of 13% in the second quarter and 20.4% in the first quarter. Revenue also increased 25% year-over-year in the third quarter of 2017.
Its dealership segment faced the severest challenges, with revenue up 0.7% on a 2.3% increase in units sold. Revenue in its retail segment jumped 52.6%.
Camping World has a price-earnings ratio of 44.15 and a price-book ratio near a three-year low at 13.58%.
See David Abrams (Trades, Portfolio)’ portfolio here. See more Real Time Picks here.
