David Abrams (Trades, Portfolio), a guru GuruFocus began following this year, has taken a stake in MoneyGram International Inc. (MGI, Financial), the second-largest global money transfer and payment services company, according to GuruFocus Real Time Picks.
Abrams runs the Boston-based hedge fund Abrams Capital Management, which focuses on U.S. equity markets with a value-based approach. His concentrated portfolio contains 13 stocks, and is valued at $1.69 billion and has 48.4% weighting in the financial services sector.
Abrams purchased 2,737,461 shares of MoneyGram, representing 5.4% of the company, on Jan. 15. MoneyGram shares closed at $8.27 each on the day of the transaction, after dropping more than 54% in the past year.
The stock saw a steep decline in October when it announced its third quarter results. The company reported $358 million in revenue, a 7% decline from $383 million a in the same quarter a year ago. It also reported a net loss of $3 million, compared to earnings of $22.5 million, in the same periods. The company’s CEO said it had been experiencing a “challenging economic, geopolitical and regulatory environment” in certain parts of the world.
The company also repurchased 643,000 of its shares at a total cost of $9.1 million during the quarter.
Fellow guru Richard Blum (Trades, Portfolio) held a 3.6% stake in MoneyGram at the end of the third quarter. Chuck Royce (Trades, Portfolio) and Jim Simons (Trades, Portfolio) also own shares, though Simons cut his stake significantly in the third quarter.
MoneyGram has a P/E ratio near a 10-year low a 7 and a P/S ratio near a three-year low at 0.4. Its stock price of $8.55 at close on Friday is near a five-year low.
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