"Tracking David Abrams’ Abrams Capital Management Portfolio – Q3 2017 Update"
"David Abrams’ 13F portfolio increased this quarter from $2.52B to $2.56B. The number of positions decreased from 19 to 18.Abrams Capital Management added Teva Pharmaceutical and O Reilly Automotive while decreasing Colony NorthStar and dropping Time Warner.The top three positions are Western Union, Teva Pharmaceutical, and Franklin Resources and they add up to ~45% 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 11/14/2017. Please visit our  article for an idea on his investment philosophy and our  for the fund's moves during Q2 2017.This quarter, Abrams’ US long portfolio increased ~2% from $2.52B to $2.56B. The number of holdings decreased from 19 to 18. The top three stakes are at 44.85% of the 13F portfolio while the top five holdings are at 62.17%. The largest position by far is Western Union and it accounts for 16.19% of the US long portfolio.Stake Disposals:Time Warner Inc. (TWX): TWX was a top three 12.17% portfolio stake established in Q4 2016 at prices between $78.50 and $97 and disposed this quarter at prices between $99 and $103. The stock is now at $89.56.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. Earlier this week, the DOJ sued to block the transaction saying the deal violates antitrust law.WelBilt Inc. (WBT) previously Manitowoc Foodservice: The 4.47% WBT stake was acquired as a result of the spin-off of Manitowoc Foodservice from Manitowoc Company in February 2016. Abrams held Manitowoc shares for which they received WelBilt (Manitowoc Foodservice at the time) shares in the ratio 1:1. It started trading at ~$12 and currently goes for $21.88. The position was sold out over the last three quarters at prices between $18.25 and $23. Abrams harvested gains.VEON Ltd (VEON) previously VimpelCom Ltd. (VIP): VEON was a 2.18% 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. There was a ~25% selling last quarter at prices between $3.68 and $4.34 and the disposal this quarter was at prices between $3.89 and $4.40. The stock currently trades at $4.Barnes & Noble Inc. (BKS): BKS was a ~1% 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 position was sold down by around two-thirds last quarter at ~$8.50 and the remaining position was disposed this quarter. The stock is now at $7.15.Note: Abrams had a ~4.8% stake in BKS as of last quarter.Cars.com (CARS): CARS was a 2.65% position. It is a spinoff from Tegna (TGNA) that started trading in May. The position was disposed this quarter at prices between $23 and $27.50. The stock is now at $24.07.New Stakes:Teva Pharmaceutical (TEVA): TEVA is top three ~15% portfolio position established this quarter at prices between $15.50 and $33.50. The stock currently trades below that range at $13.33. For investors attempting to follow Abrams, TEVA is a good option to consider for further research.O Reilly Automotive (ORLY), Asbury Automotive (ABG), and Group 1 Automotive (GPI): Combined, these three new stakes in businesses in the auto-industry form a very large position at just over 10% of the portfolio. The ~7% ORLY stake was purchased at prices between $173 and $220 and it is now at $216. ABG is a 2.38% position established at prices between $50 and $62 and the stock currently trades at $63.75. GPI is a very small 0.71% stake purchased at prices between $53 and $72 and the stock is now at $78.44.Stake Decreases:Colony NorthStar Inc. (CLNS) previously Northstar Asset Management: CLNS is a 2.79% 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 $12.23. There was a ~47% selling over the last two quarters at prices between $12.50 and $14.70.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.Stake Increases:Suburban Propane Partners (SPH): SPH is a very small 0.69% portfolio stake established last quarter at prices between $22.75 and $27 and increased by ~75% this quarter at prices between $23.50 and $26. The stock is currently at $23.93.Kept Steady:Western Union (WU): WU is Abrams’ largest stake at 16.19% 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 $19.70. For investors attempting to follow Abrams, WU is a good option to consider for further research.Franklin Resources (BEN): BEN is a top-three 13.80% 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 $41.58.Altaba (AABA) previously Yahoo: AABA is a top-five ~10% portfolio stake established last quarter at prices between $46 and $56 and the stock currently trades well above that range at $72.85.Wells Fargo (WFC): WFC is a top-five 7.20% of the US long portfolio position established in Q4 2013 at prices between $41 and $45.50. The position saw a ~20% increase in Q4 2016 at prices between $43.75 and $57.50. The stock currently trades at $54.52.Willis Towers Watson plc (WLTW): WLTW is a fairly large ~7% position purchased in Q1 2017 at prices between $117 and $133. The stock is now at $160.AMERCO (UHAL): UHAL is a ~6% 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 last quarter at prices between $341 and $393. The stock is now at $358. For investors attempting to follow Abrams, UHAL is a good option to consider for further research.Quality Care Properties (QCP): QCP is a ~3% portfolio stake established in Q4 2016 at prices between $12.50 and $17. The stock currently trades at $14.90. Q1 2017 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 2.80% 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 $3.11.Note: Abrams controls ~12% of the business.Barnes & Noble Education Inc. (BNED): BNED is a 2.23% 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 well below that range at $5.68.Keryx Pharmaceuticals (KERX): KERX is a small 1.59% of the portfolio position established in Q3 2015 at prices between $3.38 and $10.50. The stock currently trades at $4.80. 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.Global Eagle Entertainment (ENT): ENT is a ~1% 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. Q1 2017 saw a ~18% increase at prices between $2.92 and $6.79 and that was followed with another ~19% increase last quarter at prices between $2.75 and $3.55. The stock currently trades below those ranges at $2.38.Note: Abrams controls 8.2% of the business.Clear Channel Outdoor Holdings (CCO): CCO is a very small ~0.61% 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 $4.40.The spreadsheet below highlights changes to Abrams’ US stock holdings in Q3 2017:Regulatory Filings thru 8/13/2017: None."