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Billionaire David Abrams Loves The Western Union Company (WU), Microsoft Corporation (MSFT), Wells Fargo & Co (WFC)

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Billionaire David Abrams, the manager of Abrams Capital Management, has filed his latest 13F with the U.S. Securities and Exchange Commission for the reporting period as of the end of the first quarter of 2015. David Abrams is a value investor who invests only a small percentage of his assets in equities. He founded Abrams Capital in 1999 and his fund has returned 15% since its inception and currently holds nearly $8 billion in assets under management. The latest 13F revealed a total of 12 positions worth $1.3 billion. The top holdings of Abrams Capital are represented by The Western Union Company (NYSE:WU), Microsoft Corporation (NASDAQ:MSFT), and Wells Fargo & Co (NYSE:WFC), with the investor’s stakes in these companies remaining unchanged over the quarter.

David Abrams

We track the moves of more than 700 hedge funds because our research has shown that imitating a portfolio of the 15 most popular small-cap picks among these professional investors can generate an average of nearly one percentage point in excess of the S&P 500 Total Return Index’s monthly return. Moreover, these picks generated an alpha of around 80 basis points per month. By comparison, the 50 most popular stocks among hedge funds overall (which are mostly large- and mega-cap companies) had a monthly alpha of six basis points and underperformed the market by around seven basis points per month. Our small-cap strategy has returned 141% in the last 2.5+ years since we started tracking it in real time in August 2012, beating the S&P 500 ETF (SPY) by over 80 percentage points (read more details here).

On the top spot in Abrams’ portfolio is The Western Union Company (NYSE:WU), in which Abrams Capital revealed ownership of 21.61 million shares, valued at $449.68 million. The Western Union Company (NYSE:WU) is an $11.3-billion market cap company engaged in money transfer and payment services across the world. The company’s stock has risen over 35% since May 2014. The Western Union Company (NYSE:WU) reported strong results for the first quarter of 2015, exceeding analysts’ estimates by posting net income of $203.9 million, or $0.39 per share, slightly up from $203 million, or $0.37 in the same quarter last year. Revenues dropped by 2% to $1.3 billion versus $1.4 billion year-over-year. However, revenues for the quarter increased 4% on a constant currency basis. Among the funds we track, John W. Rogers‘ Ariel Investments held 12.26 million shares of The Western Union Company (NYSE:WU) at the end of the first quarter.

A notable move that Abrams Capital made in the first quarter was boosting its stake by nearly 90% in Moneygram International Inc (NASDAQ:MGI), a $530.4-million market-cap money transfer and payment services company, which is a competitor of The Western Union Company (NYSE:WU). The fund disclosed owning 4.38 million Moneygram International Inc (NASDAQ:MGI) shares, worth $37.81 million, becoming the ninth-largest holding of Abrams Capital in terms of value. Previously, Abrams Capital held 2.31 million shares of Moneygram International Inc (NASDAQ:MGI).

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