David Abrams (Trades, Portfolio) founded Abrams Capital Management, which oversees nearly $8 billion in assets across three funds. As of Sept. 2014, the majority of Abrams’ holdings are in the banking industry, with Western Union (WU, Financial) comprising about 26% of his portfolio, and Wells Fargo (WFC, Financial) at about 10%.
Web Page:https://investors.abramscapital.com
Abrams Capital Management typically invests in public equity markets in the U.S. and utilizes a value investing approach. Abrams looks for companies in which the CEO has a significant stake, or where the CEO’s salary is primarily stock-based.
Abrams Capital Management’s current portfolio holds 15 stocks and has a total value of $1,930M
Since the last quarter he bought MoneyGram International Inc (MGI, Financial) and Directv (DTV, Financial), increased his position in Covidien PLC (COV, Financial), InterXion Holding NV (INXN, Financial), and he reduced his stake in CST Brands Inc (CST, Financial) and Rayonier Advanced Materials Inc (RYAM, Financial)
Let’s focus on the most weighted trades :
MoneyGram Internationa Inc (MGI)
He bought MGI 3 times, reaching a total held shares of 2,919,447 at an average price of $9.9 per share (currently facing a loss of -14%).
The stock is currently trading at 7.00 of P/E far +13% from its 52Week Low and -58% from its 52-week high. Since 12 months back, the price dropped -57%
Over the last 5 years, Revenue decreased by -40% and EBITDA by -48%. Despite this, the DCF model, gives a fair value of 15.64$ with a current margin of safety by 45%
David Abrams (Trades, Portfolio) is the bigger holder of MGI, followed by Richard Blum (holding 1,543,446 shares, 2.86% of outstanding shares) and Chuck Royce (Trades, Portfolio) (627,339 shares, 1.16% of outstanding shares)
Directv (DTV)
He bought 700,000 shares of DTV at an average price of $86.07 with a total impact on his portfolio of 3.1%
The stock is currently trading at a P/E of 16.00 far -2.46% from its 52-week high and +20.72% from its 52-week low. Over the last 12 months the stock rose +16%.
Profitability is rated 7/10 with a ROA of 12.70% and a ROC of 56.79% at its all time high.
Over the last 5 years Revenue Grew by 28%, EPS by 49% and Free Cash Flow by 16%.
The Peter Lynch Value gives a margin of safety of 35% while based on the DCF model the stock looks overpriced by 9%
Warren Buffett is the top holder of DTV with 31,353,468 shares (6.24% of outstanding shares), followed by PRIMECAP Management (2.77% of outstanding shares) and John Paulson (2.27% of outstanding shares)
InterXion Holding NV (INXN)
He increased his stack on INXN by 186% reaching a total shares of 2,347,788 at an average price of $27 with a current gain of 18%.
The stock is currently trading at 38.80 of P/E at its all time low, far -2.90% from its 52-week high and +42.10% from its 52-week low. Over the last 12 months the stock rose +30%.
Profitability is rated 7/10 with a ROA of 3.78% and a ROC of 10.48%.
Over the last 5 years Revenue Grew by 2.10%, Free Cash Flow by 7.30%. EPS dropped by 27% but over the last 12 months the situation is going better and based on GuruFocus rates, it is growing by 1486%
The DCF Model gives a margin of safety of 199%
David Abrams (Trades, Portfolio) is the main holder of INXN with 3.39% of outstanding shares) followed by Manning & Napier Advisors, Inc (0.12% of outstanding shares)
CST Brands Inc (CST)
He reduced his stack on CST by 28% and now is holding 2,666,680 shares at an average price of $31.63 with a total gain of 39%.
The stock is currently trading at 22.70 of P/E at its all time high, far -2.50% from its 52-week high and +49.41% from its 52-week low. Over the last 12 months the stock rose +40%.
Profitability is rated 2/10 with a ROA of 5% and a ROE of 21%.
Over the last 12 months Revenue decreased by 3%, Free Cash Flow by 79%. EPS dropped by 13%.
The DCF Model gives a margin of safety of 61% while the Peter Lynch Earnings Line says the company is overpriced by 43%
David Abrams (Trades, Portfolio) is the main holder of CST, followed by Mario Gabelli (2.06% of Outstanding Shares) and John Keeley (1.98%)
