5 Best Stocks to Buy According to Billionaire David Abrams

4. Somnigroup International Inc. (NYSE:SGI)

Abrams Capital Management’s Stake: $518 Million   

Somnigroup International Inc. (NYSE:SGI) stock shares a similar story to many others in the Abrams Capital Management portfolio. Abrams bought a stake in the company in the third quarter of 2021, comprising 3.6 million shares. The fund did not make major changes to this stake till the first quarter of 2025. During this quarter, it increased the holding by 62%, bringing the shares owned to close to 6 million. Latest filings, submitted at the end of the fourth quarter of 2025, show that only minor adjustments have been made to this position in the past few quarters.

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Somnigroup International Inc. (NYSE:SGI) is the parent company behind brands like Tempur-Pedic and Sealy. Institutional investors are buying the stock because they are betting on a massive earnings unlock for the firm from the recent integration of Mattress Firm into the business. Earlier this month, management raised its synergy targets from this deal, expecting $50 million in benefits for 2026 and reaching a $100 million annual run-rate by 2027. By owning both the manufacturing (Tempur-Sealy) and the retail (Mattress Firm), SGI is capturing a much larger slice of the profit margin. Hedge funds view this as a dominant end-to-end moat. The stock has also surged following reports that Somnigroup entered a non-disclosure agreement to potentially acquire Leggett & Platt (LEG), a major bedding components supplier.