"Tracking David Abrams’ Abrams Capital Management Portfolio – Q1 2015 Update"
"David Abrams’ 13F portfolio decreased ~30% this quarter from $1.93B to $1.34B. The number of positions decreased from 15 to 12.Abrams Capital Management dropped a large stake in American International Group during the quarter.The top-three positions are Western Union, Microsoft Corporation, and Wells Fargo and they add up to ~60 % of the portfolio.This article is first in 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 05/14/2015.David Abrams founded Abrams Capital Management in 1999. Prior to that, he worked at Seth Klarman’s Baupost Group for ten years. His investment style is in the same mold as Klarman’s: bottom-up value investing with no leverage, plenty of cash, mostly long-only and a conservative allocation to equities. Assets Under Management (AUM) is at around $8B and the allocation to 13F US listed equity holdings are at less than $1.5B. The current cash-allocation is well over one-third with the remaining in real estate, private equity, and other unlisted securities. The firm is also known to have large positions in Fannie Mae (FNMA) & Freddie Mac (FMCC). Annualized returns since inception are known to be well over 15% although exact figures are not forthcoming due to the secretive nature of their operations.This quarter, Abrams’ US long portfolio decreased ~30% from $1.93B to $1.34B. The number of holdings in the portfolio decreased from 15 to 12: positions in American International Group, Covidien plc, Opus Bank, and JC Penney were disposed of and a small new position in VimpelCom was added during the quarter. The top three holdings are at just under 60% while the top five holdings are at ~75% of the US long assets. The largest holding by far is Western Union which has been in the portfolio since Q4 2013 and now accounts for over one-third of the US long portfolio.Stake Disposals:American International Group (AIG): AIG was the third-largest position at 13.93% of the US long portfolio as of last quarter. It was disposed of this quarter at prices between $48.87 and $56.42. The vast majority of the stake was purchased in Q4 2013 at prices between $48.28 and $52.30. The stock currently trades at $58.97. The quick elimination of a large stake indicates a clear bearish bias.Covidien PLC (COV): COV was Abrams’ second-largest position at 15.63% of the US long portfolio as of last quarter. The position was established in Q3 2014 at prices between $82 and $92 and increased by ~13% last quarter at prices between $82 and $104. It was a merger-arbitrage position - in June 2014, Medtronic (MDT) agreed to buy Covidien in a cash-and-stock deal ($35.19 cash and 0.956 MDT stock for each COV share) and that transaction closed in January.JC Penney (JCP): JCP is a minutely small 0.50% of the US long portfolio stake established in Q4 2013 at prices between $6.79 and $10.19. It had since been kept steady. This quarter, the position was sold at prices between $6.29 and $9.12. The stock currently trades at $8.04.Rayonier Advanced Materials (RYAM): RYAM was a 2.81% of the US long portfolio position that was eliminated this quarter at prices between $14.88 and $23.77. The stake was from Q2 2014 when around 920K shares were purchased at prices between $37 and $41. Q3 2014 saw a huge ~170% increase at prices between $29 and $44. The stock currently trades at $16.66. RYAM is a spin-off from Rayonier (RYN) that started trading in June 2014 at around $41 - the stock has lost ~60% since then.New Stakes:VimpelCom Ltd. (VIP): VIP is a small ~1% of the US long portfolio position established this quarter at prices between $3.43 and $5.61. The stock currently trades outside that range at $6.04.Stake Decreases:CST Brands Inc. (CST): CST is a medium-sized 6.02% of the US long portfolio stake as of last quarter. It was reduced by ~70% this quarter at prices between $40.79 and $45.07. The original position is from Q4 2013 when 3M shares were purchased at prices between $30 and $36. Q3 2014 saw a ~25% stake increase at prices between $33 and $36.46. Last quarter saw an about-turn as ~29% of the position was eliminated at prices between $33.35 and $44.03. The stock currently trades at $40.62. CST is a spin-off from Valero Energy (VLO) that started trading in May 2013 at $29 per share.Stake Increases:DIRECTV (DTV): The 3.14% DTV position was established last quarter at prices between $83.55 and $87.72 and doubled this quarter at prices between $84.57 and $88.95. The stock currently trades at $91.02. It is a merger-arbitrage stake - in May 2014, AT&T (T) agreed to acquire DTV in a cash-and-stock deal valued at $95 per share ($28.50 cash and the rest in stock protected by a collar).MoneyGram International Inc. (MGI): MGI is a 2.81% of the US long portfolio position established last quarter at prices between $8.15 and $12.93. It was increased by ~89% this quarter at prices between $7.93 and $9.44. The stock currently trades at $10.09. Abrams controls ~8.3% of the business. MGI is the second-largest money transfer business in the world after Western Union. Abrams’ largest 13F position is Western Union.Kept Steady:Barnes & Noble Inc. (BKS): BKS is a fairly large 7.27% 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 position has since been kept steady. The stock currently trades at $22.12. In February 2014, G Asset Management offered to buy 51% of BKS at $22 per share and that resulted in a price-spike. In February 2015, BKS announced plans to spin-off its college books unit and keep its Nook e-book business. Abrams controls 6.4% of the business.Clear Channel Outdoor Holdings (CCO): CCO is a 2.52% 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.Global Eagle Entertainment (ENT): ENT is a 4.95% of the US long portfolio position first purchased in Q4 2013 at prices between $9.12 and $15.66 and increased by two-thirds in Q3 2014 at prices between $9.60 and $13.75. The stock currently trades at $13.52. Abrams controls 6.48% of the business.InterXion Holding NV (INXN): INXN is a 4.92% of the US long portfolio position established in Q3 2014 at prices between $26.58 and $29.01. It was increased by ~190% last quarter at prices between $24.97 and $28.60. The stock currently trades just outside those ranges at $29.53. Abrams controls 3.4% of the business. In February 2015, TeleCity Group plc (TCY) agreed to merge with InterXion in an all-stock deal but earlier this month Equinix (EQIX) confirmed they are in discussions for a merger with TCY.Microsoft Corporation (MSFT): MSFT is a large ~15.06% of the US long portfolio stake established in Q1 2014 at prices between $36 and $40.30. It was increased by ~45% in Q3 2014 at prices between $42.74 and $47.52. The stock currently trades at $48.72.Opus Bank Irvine (OPB): OPB is a 3.34% of the US long portfolio position. It had an IPO in April 2014 at $30 per share. Prior to the IPO, Abrams had an ownership stake of just below 10% in the business and that got converted into equity.Wells Fargo (WFC): WFC is a fairly large 7.87% of the US long portfolio position established in Q4 2013 at prices between $41.30 and $45.50. The stock currently trades well outside that range at $56.04.Western Union (WU): WU is Abrams’ largest stake at 33.44% of the US long portfolio (~4.2% of the business). The position was first purchased in Q4 2013 at prices between $16.37 and $19.29 and increased by ~23% in Q2 2014 at prices between $15.25 and $17.25. The stock currently trades at $21.96.The spreadsheet below highlights changes to Abrams’ US stock holdings in Q1 2015:"