15 Best Stocks to Invest in Today According to David Abrams

Published on September 20, 2021 at 4:14 pm by Ruchi Gupta in Hedge Funds, News

In this article, we discuss the 15 best stocks to invest in today according to David Abrams based on Q2 holdings of the fund. If you want to skip our detailed analysis of Abrams’ history, investment philosophy, and hedge fund performance, go directly to the 5 Best Stocks to Invest in Today According to David Abrams.

David Abrams, a protégé of legendary investor Seth Klarman, founded Abrams Capital Management in 1999. Klarman famously called Abrams “smart as a whip.” Abrams is a value investor. He invests in cheap stocks and holds them over a long period to maximize gains.

As of the second quarter of 2021, Abrams Capital Management has stakes in several big companies like Facebook, Inc. (NASDAQ: FB), Alphabet Inc. (NASDAQ: GOOG), and Kinder Morgan, Inc. (NYSE: KMI).

In Facebook, Inc. (NASDAQ: FB), David Abrams owns 1.21 million shares, worth over $419 million. The huge investment covers an impressive 9.31% of his portfolio. Facebook, Inc. (NASDAQ: FB) shares have gained about 28.85% in value over the last 12 months. On August 23, Arete analyst Rocco Strauss downgraded Facebook, Inc. (NASDAQ: FB) to “Neutral” from “Buy” and gave a price target of $381. Strauss warns investors in a research note that Facebook’s growth is dependent on advertising price, which is expected to be under pressure.

Another notable stock in David Abrams’ portfolio is Alphabet Inc. (NASDAQ: GOOG). The investor owns 146,440 shares worth $357.58 million in the company. Alphabet Inc. (NASDAQ: GOOG) is up 75.19% over the last 12 months. On July 28, Wedbush analyst Michael Pachter raised the price target on Alphabet Inc. (NASDAQ: GOOG) to $3,424 from $3,127 and kept an “Outperform” rating on the shares.

David Abrams of Abrams Capital Management

Why pay attention to hedge fund sentiment while choosing stocks? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021 our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.

Keeping all these points in mind, let’s start our list of 15 best stocks to invest in today according to David Abrams in 2021. We picked the top 15 holdings of Abrams’ Q2 portfolio.

Stocks to Invest in Today According to David Abrams

15. Nuvation Bio Inc. (NYSE: NUVB)

Abrams’ Stake Value: $35,485,000
Percentage of Jorge David Abrams’ 13F Portfolio: 0.78%
Number of Hedge Fund Holders: 24

Nuvation Bio Inc. (NYSE: NUVB) is a clinical-stage biopharmaceutical firm specializing in cancer treatment. The company was incorporated in 2018, and stands fifteenth on the list of 15 best stocks to invest in today according to David Abrams. Nuvation Bio Inc. (NYSE: NUVB) currently has a $2.06 billion market capitalization.

On June 11, BMO Capital analyst Matthew Luchini maintained an “Outperform” rating on Nuvation Bio Inc. (NYSE: NUVB) and gave a price target of $17.

The hedge fund managed by David Abrams owns 3.81 million shares in Nuvation Bio Inc. (NYSE: NUVB) worth over $35.49 million, representing 0.78% of their portfolio. As of the second quarter of 2021, 24 hedge funds held stakes in Nuvation Bio Inc. (NYSE: NUVB) compared to 30 funds in the first quarter.

Like Facebook, Inc. (NASDAQ: FB), Alphabet Inc. (NASDAQ: GOOG), and Kinder Morgan, Inc. (NYSE: KMI), Nuvation Bio Inc. (NYSE: NUVB) is one of the notable stocks gaining investors’ attention in 2021.

14. O-I Glass, Inc. (NYSE: OI)

Abrams’ Stake Value: $113,235,000
Percentage of Jorge David Abrams’ 13F Portfolio: 2.51%
Number of Hedge Fund Holders: 24

O-I Glass, Inc. (NYSE: OI) produces and sells glass containers to food and beverage producers primarily in the North and South America, Europe, and the Asia Pacific. The company was founded in 1903 and is ranked fourteenth on the list of 15 best stocks to invest in today according to David Abrams. O-I Glass, Inc. (NYSE: OI) shares have gained about 35.56% in value over the last 12 months.

On August 5, Seaport Global analyst Salvator Tiano upgraded O-I Glass, Inc. (NYSE: OI) to “Buy” from “Neutral” and gave a price target of $20. On August 3, O-I Glass, Inc. (NYSE: OI) reported earnings for the second quarter of 2021. It posted earnings per share of $0.54, surpassing the expectations by $0.06. Revenue over the period was $2.32 billion, up 63.4% YoY, beating the analysts’ expectations by $760 million.

The hedge fund chaired by David Abrams holds 6.93 million shares in O-I Glass, Inc. (NYSE: OI) worth over $113.24 million. Out of the hedge funds being tracked by Insider Monkey, David Abrams’ Abrams Capital Management is a leading shareholder in O-I Glass, Inc. (NYSE: OI).

In addition to Facebook, Inc. (NASDAQ: FB), Alphabet Inc. (NASDAQ: GOOG), and Kinder Morgan, Inc. (NYSE: KMI), Twilio Inc. (NYSE:TWLO) is one of the top picks of David Abrams.

Silver Ring Value Partners, in its fourth-quarter 2020 investor letter, mentioned O-I Glass, Inc. (NYSE: OI). Here is what the fund said:

“Business Vision in 5 Years: Glass containers have held their share of the market, resulting in the company’s business being moderately larger in U.S. and the EU and substantially larger in Latin America. The company’s MAGMA technology succeeded and allowed the business to grow in a more capital-efficient manner. Revenue growth has allowed margins to expand modestly. In addition, the company has resolved its outstanding asbestos issues for a sum consistent with management’s estimates.

What Can Prevent It From Getting There:

Aluminum takes a large amount of share from glass containers

The company loses share in the EU due to competitors out-innovating it and the company underinvesting in its business

Latin American growth slows or reverses due to a prolonged recession

Asbestos claims are not settled in federal courts or are settled for a very large amount relative to management’s projections.”

13. Camping World Holdings, Inc. (NYSE: CWH)

Abrams’ Stake Value: $209,410,000
Percentage of Jorge David Abrams’ 13F Portfolio: 4.65%
Number of Hedge Fund Holders: 20

Camping World Holdings, Inc. (NYSE: CWH) operates as a recreational vehicle (RV) and outdoor store through its subsidiaries. The company was founded in 1966 and is ranked thirteenth on the list of 15 best stocks to invest in today according to David Abrams. Camping World Holdings, Inc. (NYSE: CWH) shares have offered investors returns exceeding 22.93% over the course of the past 12 months.

On August 23, Camping World Holdings, Inc. (NYSE: CWH) declared a quarterly dividend of $0.50 per share, a 100% increase from a prior dividend of $0.25. On August 4, Baird analyst Craig Kennison upgraded Camping World Holdings, Inc. (NYSE: CWH) to “Outperform” from “Neutral” and maintained a price target of $56.

Abrams Capital Management owns 5.11 million shares in Camping World Holdings, Inc. (NYSE: CWH), worth over $209.41 million, representing 4.65% of their investment portfolio. As of the second quarter of 2021, 20 hedge funds in Insider Monkey’s database of 873 funds held stakes in Camping World Holdings, Inc. (NYSE: CWH) compared to 24 funds in the first quarter.

Like Facebook, Inc. (NASDAQ: FB), Alphabet Inc. (NASDAQ: GOOG), and Kinder Morgan, Inc. (NYSE: KMI), Camping World Holdings, Inc. (NYSE: CWH) is one of the notable stocks gaining investors’ attention in 2021.

Wasatch Core Growth Fund, in its fourth-quarter 2020 investor letter, mentioned Camping World Holdings, Inc. (NYSE: CWH). Here is what the fund said:

“A relative underperformer for the quarter was Camping World Holdings, Inc. (CWH), which operates more than 160 retail locations specializing in recreational vehicles and associated parts, accessories and services. Even before the pandemic, similar to our analysis for YETI, we had already recognized the trends favoring Camping World’s market segment. Although the stock was relatively flat for the quarter, we think the price is still reasonable based on strong consumer interest and the business improvements made by the management team in recent years.”

12. PG&E Corporation (NYSE: PCG)

Abrams’ Stake Value: $215,379,000
Percentage of Jorge David Abrams’ 13F Portfolio: 4.78%
Number of Hedge Fund Holders: 64

PG&E Corporation (NYSE: PCG) sells and delivers natural gas and electricity to customers. It was incorporated in 1905, and it stands twelfth on the list of 15 best stocks to invest in today according to David Abrams. PG&E Corporation (NYSE: PCG) currently has a $17.89 billion market capitalization.

On August 16, RBC Capital analyst Shelby Tucker upgraded PG&E Corporation (NYSE: PCG) to “Outperform” from “Sector Perform” and gave a $14 price target. On August 10, PG&E Corporation (NYSE: PCG) inked a 10-year resource adequacy agreement with Ormat Technologies, Inc. (NYSE: ORA) for the utility’s 40 MWh Pomona-2 plant presently under development.

David Abrams’ Abrams Capital Management holds 21.18 million shares in PG&E Corporation (NYSE: PCG), worth over $215.38 million. This represents 4.78% of their portfolio. Abrams Capital Management’s stake in PG&E Corporation (NYSE: PCG) decreased by 7% in the second quarter of 2021, the latest data reveals.

In its fourth-quarter 2020 investor letter, GoodHaven Capital Management mentioned PG&E Corporation (NYSE: PCG). Here is what the fund said:

“During the period we purchased a new holding – PG&E Corporation – the California based utility (PCG). We expect that contrarian special situations will continue to (opportunistically) be an important part of the portfolio. After all, we bought PCG – which has filed Ch. 11 twice related to prior exposure to wildfire liabilities and staggering mismanagement – right in the middle of California’s recent heavy wildfire season. Our thinking here is that the reorganized utility has new regulatory protections that significantly reduces wildfire liability exposure, an above average rate growth profile and potentially much better management – they were searching for a new CEO when we made our investment. We purchased the stock at a high single digit forward earnings multiple, a discount to its peers that trade in the mid to high teens. Shortly after our purchases PG&E hired the well regarded Patti Poppe as their new CEO – we like this decision.”

11. Kinder Morgan, Inc. (NYSE: KMI)

Abrams’ Stake Value: $227,441,000
Percentage of Jorge David Abrams’ 13F Portfolio: 5.05%
Number of Hedge Fund Holders: 38

Kinder Morgan, Inc. (NYSE: KMI) is a North American energy infrastructure corporation. It was founded in 1936 and is placed eleventh on the list of 15 best stocks to invest in today according to David Abrams. Kinder Morgan, Inc. (NYSE: KMI) shares have gained about 17.16% over the last 12 months.

On July 22, Mizuho analyst Gabriel Moreen raised the price target on Kinder Morgan, Inc. (NYSE: KMI) to $22 from $21 and kept a “Buy” rating on the shares.

Abrams Capital Management owns 12.48 million shares in Kinder Morgan, Inc. (NYSE: KMI) worth $227.44 million, representing 5.05% of their portfolio. FPR Partners is a leading shareholder in Kinder Morgan, Inc. (NYSE: KMI), with 19.73 million shares worth $359.69 million.

10. Energy Transfer LP (NYSE: ET)

Abrams’ Stake Value: $235,182,000
Percentage of Jorge David Abrams’ 13F Portfolio: 5.22%
Number of Hedge Fund Holders: 29

Energy Transfer LP (NYSE: ET) offers energy-related services. It was founded in 1996, and it stands tenth on the list of 15 best stocks to invest in today according to David Abrams. Energy Transfer LP (NYSE: ET) shares have returned 48.97% to investors over the course of the past 12 months.

On August 3, Energy Transfer LP (NYSE: ET) posted earnings for the second quarter of 2021. It declared earnings per share of $0.20, missing the estimates by $0.07. Revenue over the period was $15.10 billion, up 105.79% YoY, beating the expectations by $178.09 million. On July 16, Wolfe Research analyst Keith upgraded Energy Transfer LP (NYSE: ET) to “Outperform” from “Peer Perform” with a price target of $13, up from $12.

Abrams Capital Management holds 22.12 million shares in Energy Transfer LP (NYSE: ET) worth over $235.18 million, representing 5.22% of their portfolio. In the second quarter of 2021, 29 hedge funds in the database of Insider Monkey held stakes in Energy Transfer LP (NYSE: ET), up from 25 the preceding quarter.

Like Facebook, Inc. (NASDAQ: FB), Alphabet Inc. (NASDAQ: GOOG), and Kinder Morgan, Inc. (NYSE: KMI), Energy Transfer LP (NYSE: ET) is one of the notable stocks gaining investors’ attention in 2021.

Miller/Howard Investments, in its first-quarter 2021 investor letter, mentioned Energy Transfer LP (NYSE: ET). Here is what the fund said:

“Another upweight was Energy Transfer (ET), which was selling at a discount on EV/ EBITDA compared with the portfolio and had an attractive +20% FCF yield. Further, ET’s ample FCF should exceed the current distribution even if the Dakota Access Pipeline were to be shut down.”

9. Teva Pharmaceutical Industries Limited (NYSE: TEVA)

Abrams’ Stake Value: $238,059,000
Percentage of Jorge David Abrams’ 13F Portfolio: 5.29%
Number of Hedge Fund Holders: 22

Teva Pharmaceutical Industries Limited (NYSE: TEVA) is a pharmaceutical business that develops, manufactures, markets, and distributes generic, specialty, and biologic medications. It was incorporated in 1901 and is placed ninth on the list of 15 best stocks to invest in today according to David Abrams. Teva Pharmaceutical Industries Limited (NYSE: TEVA) currently has a $10.58 billion market capitalization.

On August 20, Teva Pharmaceutical Industries Limited (NYSE: TEVA) released the findings of a post hoc analysis of a three-year open-label extension trial that looked at effectiveness and safety outcomes for the usage of AUSTEDO (deutetrabenazine) tablets. It was usually well tolerated, with a similar safety profile in both younger and older individuals. On July 29, Teva Pharmaceutical Industries Limited (NYSE: TEVA) announced earnings for the second quarter of 2021. It declared revenue of $3.91 billion, up 1.03% YoY, missing the estimates by $118.85 million.

The hedge fund managed by David Abrams holds 24.05 million shares in Teva Pharmaceutical Industries Limited (NYSE: TEVA) worth $238.06 million, representing 5.29% of their portfolio. Legendary investor and billionaire Warren Buffett’s Berkshire Hathaway is the biggest stakeholder in Teva Pharmaceutical Industries Limited (NYSE: TEVA). The Oracle of Omaha owns 42.79 million shares of the company worth $423.62 million.

8. Willis Towers Watson Public Limited Company (NASDAQ: WLTW)

Abrams’ Stake Value: $251,642,000
Percentage of Jorge David Abrams’ 13F Portfolio: 5.59%
Number of Hedge Fund Holders: 70

Willis Towers Watson Public Limited Company (NASDAQ: WLTW) is a global advice, broking, and solutions provider. The company was founded in 1828, and it ranks eighth on the list of 15 best stocks to invest in today according to David Abrams. Willis Towers Watson Public Limited Company (NASDAQ: WLTW) currently has a $28.3 billion market capitalization.

On August 25, Willis Towers Watson Public Limited Company (NASDAQ: WLTW) agreed to buy Leaderim, an Israeli insurance brokerage and consulting firm, as part of a strategy to expand its business in the Middle East and worldwide. On August 16, Wolfe Research analyst Michael Zaremski initiated coverage of Willis Towers Watson Public Limited Company (NASDAQ: WLTW) with an “Outperform” rating and gave a price target of $261.

The hedge fund chaired by David Abrams holds 1.09 million shares in Willis Towers Watson Public Limited Company (NASDAQ: WLTW) worth $251.64 million, representing 5.59% of their portfolio. In the second quarter of 2021, 70 hedge funds in the database of Insider Monkey held stakes worth in Willis Towers Watson Public Limited Company (NASDAQ: WLTW), up from 66 the preceding quarter.

Like Facebook, Inc. (NASDAQ: FB), Alphabet Inc. (NASDAQ: GOOG), and Kinder Morgan, Inc. (NYSE: KMI), Willis Towers Watson Public Limited Company (NASDAQ: WLTW) is one of the notable stocks gaining investors’ attention in 2021.

7. Change Healthcare Inc. (NASDAQ: CHNG)

Abrams’ Stake Value: $321,267,000
Percentage of Jorge David Abrams’ 13F Portfolio: 7.14%
Number of Hedge Fund Holders: 51

Change Healthcare Inc. (NASDAQ: CHNG) is an independent healthcare technology company. It was incorporated in 2016 and is placed seventh on the list of 15 best stocks to invest in today according to David Abrams. Change Healthcare Inc. (NASDAQ: CHNG) shares have offered investors more than 54.81% in returns over the past 12 months.

On August 5, Piper Sandler analyst Sean Wieland initiated coverage of Change Healthcare Inc. (NASDAQ: CHNG), giving it a price target of $25.75 in line with the negotiated deal terms, and reiterated an “Overweight” rating. On August 4, Change Healthcare Inc. (NASDAQ: CHNG) posted earnings for the second quarter of 2021. It declared earnings per share of $0.41, missing the estimates by $0.03.

Abrams Capital Management holds more than 13.94 million shares in Change Healthcare Inc. (NASDAQ: CHNG) worth $321.27 million, representing 7.14% of their portfolio. The hedge fund has increased its stake in the firm by 13% in the second quarter of 2021.

In addition to Facebook, Inc. (NASDAQ: FB), Alphabet Inc. (NASDAQ: GOOG), and Kinder Morgan, Inc. (NYSE: KMI), analysts are paying attention to Change Healthcare Inc. (NASDAQ: CHNG) amid the company’s long-term growth potential.

6. AMERCO (NASDAQ: UHAL)

Abrams’ Stake Value: $330,805,000
Percentage of Jorge David Abrams’ 13F Portfolio: 7.35%
Number of Hedge Fund Holders: 21

AMERCO (NASDAQ: UHAL) works like a do-it-yourself moving and storage company for residential and business items. The company was founded in 1945, and it stands sixth on the list of 15 best stocks to invest in today according to David Abrams. Shares of AMERCO (NASDAQ: UHAL) surged 83.30% in the past 12 months.

On August 20, AMERCO (NASDAQ: UHAL) declared a special quarterly dividend of $0.50 per share. On August 4, AMERCO (NASDAQ: UHAL) reported earnings for the second quarter of 2021. It posted earnings per share of $17.60, beating the analysts’ expectations by $9.54. The revenue over the period was $1.47 billion, up 48.9% YoY, beating the anticipation by $230 million.

David Abrams’ Abrams Capital Management holds 561,258 shares of AMERCO (NASDAQ: UHAL), worth $330.81 million, making it the most significant shareholder of the company. In addition to Facebook, Inc. (NASDAQ: FB), Alphabet Inc. (NASDAQ: GOOG), and Kinder Morgan, Inc. (NYSE: KMI), AMERCO (NASDAQ: UHAL) is one of the top picks of David Abrams.

Smead Capital Management, in its second-quarter 2021 investor letter mentioned AMERCO (NASDAQ: UHAL). Here is what the fund said:

“AMERCO (UHAL) backed off from terrific 12-month performance. Let them know if you’d like to rent a vehicle to go to Los Angeles from Phoenix. It only costs $189 to go to LA, but it cost $1,200 to rent the same vehicle in LA and drive it to Phoenix. These results can be directly tied to holding shares which are heavily under-owned by most institutions and professionals. Many of our companies are under-followed or downright disrespected by the analysts which are paid to research them. We hope we are still in an era where stock picking can shine.”

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