David Abrams (Trades, Portfolio), founder of Abrams Capital Management, disclosed in a regulatory portfolio update filing that his firm’s top trades during the fourth quarter included the transfer of its U-Haul Holding Co. (UHAL, Financial)(UHAL.B, Financial) holding from voting shares to non-voting shares. The firm also boosted its position in Meta Platforms Inc. (META, Financial), exited its positions in O-I Glass Inc. (OI, Financial) and Kinder Morgan Inc. (KMI, Financial) and trimmed its holdings in TransDigm Group (TDG, Financial) and Teva Pharmaceutical Industries (TEVA, Financial).
Prior to founding Boston-based Abrams Capital Management, Abrams worked with Baupost leader Seth Klarman (Trades, Portfolio). Abrams follows a fundamental, value-oriented investing approach and spreads its holdings across stocks, debt instruments, distressed debt and illiquid investments and other miscellaneous securities.
As of December 2022, Abrams’ $2.80-billion 13F equity portfolio contains 16 stocks with a quarterly turnover ratio of 11%. The top-four sectors in terms of weight are consumer cyclical, communication services, industrials and energy, with weights of 46.24%, 16.70%, 16.27% and 7.55%.
Investors should be aware13F filings do not give a complete picture of a firm’s holdings as the reports only include its positions in U.S. stocks and American depository receipts, but they can still provide valuable information. Further, the reports only reflect trades and holdings as of the most-recent portfolio filing date, which may or may not be held by the reporting firm today or even when this article was published.
U-Haul
Abrams sold 3,822,143 units of U-Haul's voting shares (UHAL, Financial), chopping 90.38% of the position and 5.61% of its equity portfolio. With the proceeds, the firm purchased 3,663,243 units of U-Haul's non-voting shares (UHAL.B, Financial), giving the position 7.18% equity portfolio weight.
Voting shares of U-Haul averaged $57.53 during the fourth quarter while non-voting shares averaged $57.91 during the fourth quarter. The stock is fairly valued based on its price-to-GF-Value ratio of 1.07 as of Monday.
The Reno, Nevada-based truck and self-storage rental company announced on Nov. 15, 2022, that it transferred its listing from the Nasdaq to the New York Stock Exchange effective Dec. 19. The company also changed its name from Amerco to U-Haul Holding Co to reflect its key moving and self-storage business segment.
U-Haul has a GF Score of 93 out of 100, driven by a growth rank of 10 out of 10 and a rank of 9 out of 10 for profitability and momentum despite financial strength and GF Value ranking just 5 out of 10.
U-Haul's profitability ranks 9 out of 10 on several positive investing signs, which include a 4.5-star business predictability rank and an operating margin that has increased by approximately 5.8% per year on average over the past five years and is outperforming more than 90% of global competitors.
Meta Platforms
Abrams purchased 971,691 shares of Meta Platforms (META, Financial), boosting the position by 80.64% and its equity portfolio by 4.17%.
Shares of Meta averaged $117.43 during the fourth quarter; the stock is significantly undervalued based on its price-to-GF-Value ratio of 0.48 as of Monday.
The Menlo Park, California-based social media giant has a GF Score of 89 out of 100 based on a growth rank of 10 out of 10, a profitability rank of 9 out of 10, a financial strength rank of 7 out of 10 and a rank of 4 out of 10 for GF Value and momentum.
Meta’s profitability ranks 9 out of 10 on several positive investing signs, which include a three-star business predictability rank and an operating margin that outperforms approximately 86% of global competitors.
O-I Glass
Abrams sold all 6,934,144 shares of O-I Glass (OI, Financial), trimming 2.59% of its equity portfolio.
Shares of O-I Glass averaged $16.11 during the fourth quarter; the stock is significantly overvalued based on its price-to-GF-Value ratio of 1.53 as of Monday.
The Perrysburg, Ohio-based glass container manufacturing company has a GF Score of 59 out of 100 based on a profitability rank of 7 out of 10, a financial strength rank of 4 out of 10, a GF Value rank of 1 out of 10 and a rank of 3 out of 10 for momentum and growth.
Kinder Morgan
The firm sold all 3,377,688 shares of Kinder Morgan (KMI, Financial), trimming 1.62% of its equity portfolio.
Shares of Kinder Morgan averaged $17.99 during the fourth quarter; the stock is modestly undervalued based on its price-to-GF-Value ratio of 0.83 as of Monday.
The Houston-based midstream energy company has a GF Score of 84 out of 100 based on a rank of 9 out of 10 for momentum and GF Value, a profitability rank of 8 out of 10, a growth rank of 6 out of 10 and a financial strength rank of 4 out of 10.
TransDigm
The firm sold 173,118 shares of TransDigm (TDG, Financial), slicing 32.10% of the position and 2.62% of its equity portfolio.
Shares of TransDigm averaged $589.18 during the fourth quarter; the stock is fairly valued based on its price-to-GF-Value ratio of 1.08 as of Monday.
The Cleveland-based aircraft components manufacturing company has a GF Score of 88 out of 100 based on a momentum rank of 10 out of 10, a rank of 9 out of 10 for profitability and growth, a GF Value rank of 5 out of 10 and a financial strength rank of 3 out of 10.
Teva Pharmaceutical Industries
Abrams sold 7,966,431 shares of Teva Pharmaceutical Industries (TEVA, Financial), chopping 33.33% of the position and 1.85% of its equity portfolio.
Shares of Teva averaged $8.73 during the fourth quarter; the stock is modestly overvalued based on its price-to-GF-Value ratio of 1.25 as of Monday.
The Israeli drug manufacturer has a GF Score of 61 out of 100 based on a momentum rank of 6 out of 10, a profitability rank of 5 out of 10, a financial strength rank of 4 out of 10, a GF Value rank of 3 out of 10 and a growth rank of 1 out of 10.
