"Tracking David Abrams’ Abrams Capital Management Portfolio – Q1 2017 Update"
"David Abrams’ 13F portfolio decreased this quarter from $2.72B to $2.61B. The number of positions decreased from 19 to 17.Abrams Capital Management increased AMERCO while decreasing WelBilt.The top three positions are Western Union, Franklin Resources, and Microsoft Corporation and they add up to ~42% of the portfolio.This article is part of a series that provides an ongoing analysis of the changes made to David Abrams’ US stock portfolio on a quarterly basis. It is based on Abrams’ regulatory  filed on 05/12/2017. Please visit our  article for an idea on his investment philosophy and our  for the fund's moves during Q4 2016.This quarter, Abrams’ US long portfolio decreased ~4% from $2.72B to $2.61B. The number of holdings decreased from 19 to 17. The top three stakes are at 42.26% of the 13F portfolio while the top five holdings are at 60.81%. The largest position by far is Western Union and it accounts for 16.85% of the US long portfolio.Stake Disposals:MoneyGram International Inc. (MGI): MGI was a 2.22% of the US long portfolio position (~10% of the business) established in Q4 2014 at prices between $8 and $13. It was increased by ~90% in Q1 2015 at prices between $8 and $9.50 and another ~17% the following quarter at prices between $7.50 and $10.50. The disposal this quarter was at prices between $11.50 and $17. The stock currently trades at $17.41.Note: In January, Ant Financial agreed to acquire MGI for $13.25 per share cash. A bidding war ensued as Euronet Worldwide (EEFT) offered $15.25 per share cash in March. Last month, Ant Financial increased the offer to $18 per share cash. Ant Financial is an affiliate of Alibaba Group Holdings (BABA).Syngenta AG (SYT): SYT was a very small 0.91% stake established last quarter at prices between $75.50 and $88 and disposed of this quarter at prices between $79 and $89. The stock currently trades at $92.50.New Stakes:None.Stake Decreases:WelBilt Inc. (WBT) previously Manitowoc Foodservice Inc. (MFS): The fairly large 5.67% WBT stake was acquired as a result of the spin-off of Manitowoc Foodservice from Manitowoc Company in February 2016. Abrams held MTW shares for which they received MFS shares in the ratio 1:1. MFS started trading at ~$12 and currently the renamed entity WelBilt goes for $19.83. This quarter saw a one-third selling at prices between $18 and $20. The stock has returned ~62% since the spinoff.Stake Increases:AMERCO (UHAL): UHAL is a ~4% position purchased last quarter at prices between $314 and $374 and increased by ~160% this quarter at prices between $367 and $391. The stock is now at $387.Quality Care Properties (QCP): QCP is a 3.61% portfolio stake established last quarter at prices between $12.50 and $17. The stock currently trades at $16.70. This quarter saw a ~12% increase.Note: Abrams controls 5.3% of QCP. The REIT is a spin-off from HCP Inc. (HCP) that started trading last October.Och-Ziff Capital Management (OZM): OZM is a 1.93% 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 last quarter at a cost-basis around $3.20. This quarter also saw a ~17% increase at prices between $2.20 and $3.63. The stock is now at $2.39.Note: Abrams controls ~12% of the business.Global Eagle Entertainment (ENT): ENT is a 0.72% of the US long 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. This quarter saw a ~18% increase at prices between $2.92 and $6.79. The stock currently trades near the low end of his purchase price ranges at $3.22.Note: Abrams controls 6.9% of the business.Kept Steady:Western Union (WU): WU is Abrams’ largest stake at 16.85% of the US long 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 $18.82. For investors attempting to follow Abrams, WU is a good option to consider for further research.Franklin Resources (BEN): BEN is a large (top-three) 12.83% 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 near the top end of those ranges at $41.40.Microsoft Corporation (MSFT): MSFT is the third-largest stake at 12.57% of the US long portfolio. It was established in Q1 2014 at prices between $36 and $40.50 and increased by ~45% in Q3 2014 at prices between $42.50 and $47.50. The stock currently trades well above those ranges at $68.68.Time Warner Inc. (TWX): TWX is a large (top five) 11.42% portfolio stake established last quarter at prices between $78.50 and $97. The stock is now at $98.23.Note: In October last year, AT&T (T) agreed to acquire Time Warner in a cash-and-stock ($53.75 cash) deal worth $107.50 per share.Wells Fargo (WFC): WFC is a large 7.13% of the US long portfolio position established in Q4 2013 at prices between $41 and $45.50. The position saw a ~20% increase last quarter at prices between $43.75 and $57.50. The stock currently trades at $53.39.Willis Towers Watson plc (WLTW): WLTW is a fairly large 5.94% position purchased last quarter at prices between $117 and $133. The stock is now at $141.Colony NorthStar Inc. (CLNS) previously Northstar Asset Management (NSAM): CLNS is a ~5.40% of the 13F portfolio stake established in Q1 2016 at prices between $9.31 and $12.14 and increased by ~38% the following quarter at ~$10.60. The stock currently trades at $13.86.Note: Northstar Asset Management, Northstar Realty Finance, and Colony Capital combined to form Colony NorthStar in a transaction that closed in January. NSAM shareholders received a special dividend of $1.16 per share following the close. The prices quoted above are adjusted for this.Barnes & Noble Inc. (BKS): BKS is a 3.69% of the US long portfolio position. The stake was established in Q1 2014 and almost doubled the following quarter in the mid-teens price-range. The four quarters thru Q1 2016 saw a combined ~150% increase at prices between $7.33 and $12.50. Overall, his cost-basis is at around $10 after adjusting for the Barnes & Noble Education spin-off transaction that closed in July 2015. The stock is now at $6.85.Note: Regulatory filings since the quarter ended show them owning 5.9M shares (8.2% of the business). This is compared to 10.4M shares in the 13F - 4.5M shares disposed at $8.575.Barnes & Noble Education Inc. (BNED): BNED is a 3.22% 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. The stock currently trades at $9.25.VEON Ltd (VEON) previously VimpelCom Ltd. (VIP): VEON is a 2.94% of the US long portfolio position established in Q1 2015 at prices between $3.40 and $5.50 and increased by ~70% the following quarter at prices between $5 and $6.50. Q3 2015 saw a stake doubling at prices between $4 and $6 and that was followed with a ~75% increase the following quarter at prices between $3 and $4.30. The stock currently trades at $3.89.Keryx Pharmaceuticals (KERX): KERX is a small 1.35% of the portfolio position established in Q3 2015 at prices between $3.38 and $10.50. The stock currently trades at $6.37. Q4 2015 saw a ~10% increase and the following quarter saw another ~4% increase.Note: Seth Klarman (Baupost Group) has a huge ~43% ownership stake (assumes the dilution implied by convertible notes held) in KERX.Clear Channel Outdoor Holdings (CCO): CCO is a very small ~0.72% of the US long 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 $3.65.The spreadsheet below highlights changes to Abrams’ US stock holdings in Q1 2017:Regulatory filings thru 02/13/2017: 13G/A 02/10/2017 MTW - 0, 13G/A 02/10/2017 MGI - 0, Form 5 02/10/2017 BKS - 10.42M shares - 14.33% - increased at $10.99 on 9/27/2016, 13G 02/10/2017 MFS - 11.26M shares - 8.13%. 13G/A 2/10/2017 KERX - 5.72M shares - 5.4%. 13G/A 2/10/2017 BNED - 8.77M shares - 18.95%. Form 4 several - OZM - 1.36M shares acquired at $3.20, 250K at $3.19, 654K at $3.25, 1.03M at $3.23, 500K at $3.2, 235K at $3, (Form 3 filed 12/22 was for 18.2M shares) - 18.95M shares - 10.43%. 13G 1/23/2017 - QCP - 5M shares - 5.3%. 13D/A - 1/11/2017 - NSAM - 0.Regulatory filings thru 11/26/2016: 13D 8/17/2016 NSAM - 10.91M shares - 5.8% - 2.9M shares purchased at around $10.60 around end of June."