"Tracking David Abrams’ Abrams Capital Management Portfolio – Q2 2018 Update"
"David Abrams’ 13F portfolio value increased this quarter from $3.19B to $3.60B. The number of positions increased from 20 to 22.Abrams Capital Management added Express Scripts, Alphabet, and Lithia Motors during the quarter.The top three positions are Teva Pharmaceutical, Western Union, and Aetna and they add up to one-third of the portfolio.This article is part of a series that provides an ongoing analysis of the changes made to David Abrams’ 13F portfolio on a quarterly basis. It is based on Abrams’ regulatory  filed on 08/13/2018. Please visit our  article for an idea on his investment philosophy and our  for the fund's moves during Q1 2018.This quarter, Abrams’ 13F portfolio value increased ~13% from $3.19B to $3.60B. The number of holdings increased from 20 to 22. The top three stakes are at one-third of the 13F portfolio while the top five holdings are at ~48%. The largest position is Teva Pharmaceutical and it accounts for 13.36% of the 13F portfolio.Stake Disposals:Time Warner Inc. (TWX): TWX was a large (top three) ~10% of the portfolio position established in Q4 2017 at prices between $87 and $104 and increased by ~12% last quarter at prices between $91 and $97. In October 2016, AT&T (T) agreed to acquire Time Warner in a cash-and-stock ($53.75 cash) deal worth $107.50 per share and that transaction closed in June.Note: TWX had a previous roundtrip: It was a top three ~12% portfolio stake established in Q4 2016 at prices between $78.50 and $97 and disposed in Q3 2017 at prices between $99 and $103.New Stakes:Express Scripts (ESRX): ESRX is a fairly large 5.70% of the portfolio stake established this quarter at prices between $68 and $82 and the stock currently trades just above that range at $84.02. It is a merger-arbitrage stake – Cigna (CI) is buying Express Scripts (ESRX) in a cash-and-stock deal ($48.75 cash and 0.2434 shares of the new company for each share of ESRX held) announced in March.Alphabet Inc. (GOOG) and Lithia Motors (LAD): GOOG is a ~4% position purchased this quarter at prices between $1005 and $1175 and the stock is now above that range at $1235. The 2.74% LAD stake was established at prices between $95 and $105 and it is currently well below that range at $85.Note: Regulatory filings since the quarter ended show them owning 2M shares of Lithia Motors. This is compared to ~1M shares in the 13F report. For investors attempting to follow Abrams, Lithia Motors is a good option to consider for further research.Stake Decreases:Western Union (WU): WU is Abrams’ second-largest stake at ~12% of the 13F portfolio (~4.2% of the business). The position was first purchased in Q4 2013 at prices between $16 and $19.50 and increased by ~23% in Q2 2014 at prices between $15.25 and $17.25. The stock currently trades at $18.75. For investors attempting to follow Abrams, WU is a good option to consider for further research. This quarter saw marginal trimming.Altaba (AABA) previously Yahoo: AABA is a top-five ~8% portfolio stake established in Q2 2017 at prices between $46 and $56 and the stock currently trades well above that range at $70.20. This quarter saw a very minor ~2% trimming.Barnes & Noble Education Inc. (BNED): BNED is a ~1% of the portfolio stake. It was established as a result of the spinoff of BNED from Barnes & Noble: shareholders of Barnes & Noble received 0.632 shares of BNED for each share of BKS held. The position was more than doubled since at prices between $8.50 and $15.50. Q4 2017 saw an about turn: ~25% sold at an average price of ~$8 per share. The stock currently trades at $6.16. There was a ~7% trimming last quarter and another ~4% selling this quarter.Group 1 Automotive (GPI): GPI is a small 0.80% stake purchased in Q3 2017 at prices between $53 and $72 and doubled last quarter at prices between $62.50 and $82.50. This quarter saw a ~9% selling. The stock is currently at $75.01.Stake Increases:Aetna Inc. (AET): AET is a large ~8% of the portfolio stake established last quarter at prices between $168 and $194 and increased by ~14% this quarter at around the same price range. The stock currently trades at ~$195.AMERCO (UHAL): UHAL is a 5.71% position purchased in Q4 2016 at prices between $314 and $374 and increased by ~160% the following quarter at prices between $367 and $391. There was a ~45% increase in Q2 2017 at prices between $341 and $393 and that was followed with a similar increase over the last two quarters at prices between $323 and $384. The stock is now at ~$369. For investors attempting to follow Abrams, UHAL is a good option to consider for further research.Kinder Morgan (KMI): KMI is a 4.31% of the portfolio position purchased last quarter at prices between $14.75 and $19.75 and the stock is currently at $17.84. There was a ~4% stake increase this quarter.Quality Care Properties (QCP): QCP is a 4.20% portfolio stake established in Q4 2016 at prices between $12.50 and $17. There was a ~38% stake increase last quarter at prices between $12.25 and $20 and that was followed with a marginal increase this quarter. Abrams Capital owned ~7.4% of the outstanding shares of QCP. The REIT was a spin-off from HCP Inc. (HCP) that started trading in October 2016. Welltower Inc. (WELL) acquired QCP for $20.75 per share cash and the transaction closed last month.Suburban Propane Partners (SPH): SPH is a small 1.85% portfolio stake established in Q2 2017 at prices between $22.75 and $27 and increased by ~75% next quarter at prices between $23.50 and $26. The stock is currently at $24.03. The position was more than doubled in Q4 2017 at prices between $23.20 and $26.70 and that was followed with a ~87% increase over the last two quarters at prices between $22 and $27.Keryx Pharmaceuticals (KERX): KERX is a small ~1% of the portfolio position established in Q3 2015 at prices between $3.38 and $10.50. The stock currently trades at $3.13. There was a ~70% stake increase in Q4 2017 at an average price of ~$5 per share. This quarter saw a ~2% further increase.Note: Abrams Capital owns 8.2% of the outstanding shares of Keryx.Kept Steady:Teva Pharmaceutical (TEVA): TEVA is currently the largest position at 13.36% of the portfolio. It was established in Q3 2017 at prices between $15.50 and $33.50. The stock currently trades at $21.95. There was a ~9% trimming in Q4 2017.Franklin Resources (BEN): BEN is a top-five ~7% of the 13F portfolio position established in Q4 2015 at prices between $35 and $42 and increased by ~50% the following quarter at prices between $31.50 and $39. The stock currently trades at $32.04.  For investors attempting to follow, BEN is a good option to consider for further research.O Reilly Automotive (ORLY) and Asbury Automotive (ABG): These two positions were established in Q3 2017. The ~7% ORLY stake was purchased at prices between $173 and $220 and it is now well above that range at ~$314. ABG is a ~2% position established at prices between $50 and $62 and the stock currently trades well above that at $74.55.Note: Regulatory filings since the quarter ended show them owning 1.59M shares (7.8% of business) of Asbury Automotive. This is compared to 1.09M shares in the 13F report.Willis Towers Watson plc (WLTW): WLTW is a fairly large ~5% position purchased in Q1 2017 at prices between $117 and $133. The stock is now at ~$148.PG&E Corp. (PCG): PCG is a 4.63% of the portfolio stake established in Q4 2017 at prices between $44 and $70 and increased by ~20% last quarter at prices between $38.50 and $45.50. The stock is now at $42.79.Note: PG&E shares dropped sharply in December as they halted the dividend citing liability concerns from the October 2017 Northern California wildfires.Och-Ziff Capital Management (OZM): OZM is a 1.19% portfolio stake established in Q2 2016 at prices between $3.30 and $4.35 and increased by ~11% in the following quarter at prices between $3.35 and $4.49. There was another ~11% increase in Q4 2016 at a cost-basis around $3.20. Q1 2017 also saw a ~17% increase at prices between $2.20 and $3.63. The stock is now at $1.97.Note: Abrams controls ~12% of the business.Global Eagle Entertainment (ENT): ENT is a very small 0.49% of the portfolio position first purchased in Q4 2013 at prices between $9 and $15.50 and increased by two-thirds in Q3 2014 at prices between $9.50 and $14. Q1 2017 saw a ~18% increase at prices between $2.92 and $6.79 and that was followed with another ~19% increase the following quarter at prices between $2.75 and $3.55. The stock currently trades at $2.59.Note: Abrams controls ~8% of the business.Clear Channel Outdoor Holdings (CCO): CCO is a very small 0.40% of the 13F portfolio stake. It is a very long-term position that has been in the portfolio since 2009. The stake has been kept almost steady since. In March 2012, CCO paid a special-dividend of $6.08 per share and that recouped almost the entire outlay on this investment. The stock currently trades at $4.40.The spreadsheet below highlights changes to Abrams’ 13F stock holdings in Q2 2018:Regulatory Filings thru 05/14/2018: Form 4 – 4/27/2018 & 3/5/2018 – BNED - ~45K disposed at ~$7.4, 124K disposed at $8. 13D – 3/15/2018 & 2/14 13G – ABG – 1.09M shares – 5.2%, 13G & G/As filed on 2/14/2018: ENT – 7M shares – 7.71%, Welbilt – 0, BKS – 0, KERX – 9.7M shares – 8.2%."