In this piece, we will take a look at the 5 best stocks to buy today according to value investor David Abrams. If you want more details about Mr. Abrams and his hedge fund, then head on over to 10 Best Stocks to Buy Today According to Value Investor David Abrams.
5. AMERCO (NASDAQ:UHAL)
Abrams Capital’s Stake Value: $362 million
Percentage of Abrams Capital’s 13F Portfolio: 7.9%
Number of Hedge Fund Holders: 25
AMERCO (NASDAQ:UHAL) is a storage and transportation provider in the United States which deals with the general public. It allows customers to rent out trucks, trailers, and storage spaces. It also operates an online marketplace alongside providing other specialty equipment.
For its fiscal Q2, AMERCO (NASDAQ:UHAL) earned $1.67 billion in revenue and $20.9 in GAAP EPS, beating analyst estimates for both.
David Abrams’ Abrams Capital Management owned 561,258 AMERCO (NASDAQ:UHAL) shares during Q3 2021. These were worth $362 million and represented 7.9% of its portfolio. Insider Monkey’s third quarter of 2021 survey of 867 hedge funds revealed that 25 owned the company’s shares.
AMERCO (NASDAQ:UHAL)’s largest investor after Abrams Capital is Donald Yacktman’s Yacktman Asset Management who owns 444,927 shares worth $287 million.
Smead Capital Management mentioned AMERCO (NASDAQ:UHAL) in its Q2 2021 investor letter. It outlined that:
“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.”
4. Alphabet Inc. (NASDAQ:GOOG)
Abrams Capital’s Stake Value: $391 million
Percentage of Abrams Capital’s 13F Portfolio: 8.5%
Number of Hedge Fund Holders: 156
Alphabet Inc. (NASDAQ:GOOG) is Google’s holding company, as it owns not only the renowned search engine but also other companies and products such as YouTube and Google Cloud.
Mr. Abrams’ hedge fund had a stake of $391 million in Alphabet Inc. (NASDAQ:GOOG) during last year’s third quarter, which represented 8.5% of its portfolio and came courtesy of 146,440 shares. For the same time period, 156 out of 867 hedge funds also had a stake in the company according to Insider Monkey’s research.
For its fiscal Q3, Alphabet Inc. (NASDAQ:GOOG) earned $65 billion in revenue and $27.99 in GAAP EPS, beating analyst estimates for both. The company’s price target was raised to $3,200 from $3,000 by Morgan Stanley in a November 2021 analyst note, which shared optimism for the recovery in advertisement spending.
Alphabet Inc. (NASDAQ:GOOG)’s largest investor according to Insider Monkey’s research is Chris Hohn’s TCI Fund Management who owns 2.9 million shares worth $7.8 billion.
Giverny Capital mentioned Alphabet Inc. (NASDAQ:GOOG) in its Q3 2021 investor letter, stating that:
“During the quarter we trimmed two positions, (which includes) Alphabet, after significant run-ups. Alphabet remains our largest holding at a 9% weight. When it rose above a 10% weight in late July, we brought it down a bit. I won’t automatically trim a position when it reaches the 10% threshold, but Alphabet nearly doubled from the summer of 2020 to 2021 and it felt responsible to take some gains.”
3. Meta Platforms, Inc. (NASDAQ:FB)
Abrams Capital’s Stake Value: $408 million
Percentage of Abrams Capital’s 13F Portfolio: 8.9%
Number of Hedge Fund Holders: 248
Meta Platforms, Inc. (NASDAQ:FB) is the holding company for Facebook, WhatsApp, and Instagram. Facebook is the world’s largest social network, which has made its founder Mr. Mark Zuckerberg into the youngest billionaire in history.
For its fiscal Q3, Meta Platforms, Inc. (NASDAQ:FB) raked in $29 billion in revenue and $3.22 in GAAP EPS, beating estimates only for EPS. Its price target was increased to $425 from $416 in December 2021 by UBS, who shared optimism for growth in spending budgets for Facebook’s corporate customers. These budgets had crashed in the wake of the ongoing pandemic.
Abrams Capital owned 1.2 million Meta Platforms, Inc. (NASDAQ:FB) shares during the third quarter of last year. These were worth $408 million and made up for 8.9% of its portfolio. During the same time period, 248 of the 867 hedge funds polled by Insider Monkey held stakes in the company.
Ken Fisher’s Fisher Asset Management is Meta Platforms, Inc. (NASDAQ:FB) largest investor according to Insider Monkey’s research. It owns 7.5 million shares worth $2.5 billion.
Jefferies Group mentioned Meta Platforms, Inc. (NASDAQ:FB) in its Q3 2021 investor letter. It stated that:
“While still early, FB is in the process of building the platforms that will ultimately support the development of the Metaverse. We look at FB’s position through the lens of 4 current investment initiatives: 1) Oculus VR hardware, 2) Smart glasses, 3) Augmented Reality lenses, and 4) “Horizon Workrooms”
Oculus Virtual Reality hardware: Since acquiring Oculus in 2014 ($2B deal), FB has been focused on developing best-in-class hardware and complementary software & services to support VR experiences. The Oculus Quest 2 is FB’s newest VR headset; it retails at $299 and allows users to play games, try fitness classes, play sports, and watch concerts in virtual environments. Most importantly, Quest 2 is linked to users’ Facebook accounts, which means users can seamlessly connect with friends in virtual environments to play games or spend time together. We believe one of FB’s biggest differentiators in VR is its large array of non-gaming experiences that were designed for Oculus. For instance, users can explore extreme terrain in National Geographic Explore VR, join virtual fitness classes, or simulate being a chef. As FB’s hardware continues to improve and becomes less cumbersome, we would expect a flywheel of greater developer and user adoption of VR…”
2. Asbury Automotive Group, Inc. (NYSE:ABG)
Abrams Capital’s Stake Value: $416 million
Percentage of Abrams Capital’s 13F Portfolio: 9.08%
Number of Hedge Fund Holders: 22
Asbury Automotive Group, Inc. (NYSE:ABG) is an American automotive retailer which sells new and old cars, alongside replacement and maintenance parts. It also provides collision recovery services in addition to finance and insurance for vehicles.
Abrams Capital’s stake in Asbury Automotive Group, Inc. (NYSE:ABG) for Q3 2021 equaled $416 million and came through 2 million shares, making it the company’s largest investor. It represented 9.08% of the fund’s portfolio. 22 of the 867 hedge funds owned the automotive group’s shares in the third quarter of last year according to Insider Monkey’s research.
Asbury Automotive Group, Inc. (NYSE:ABG)’s largest investor after Mr. Abrams is Lauren Taylor Wolfe’s Impactive Capital who owns 1 million shares worth $199 million.
For its fiscal Q3, Asbury Automotive Group, Inc. (NYSE:ABG) brought in $2.4 billion in revenue and $7.36 in non-GAAP EPS, pleasing Wall Street by beating analyst estimates for both.
However, Morgan Stanley lowered Asbury Automotive Group, Inc. (NYSE:ABG)’s price target to $180 from $205 in a December 2021 note which outlined that problems with legacy automakers might not bode well for the company in the future despite strong earnings.
1. Lithia Motors, Inc. (NYSE:LAD)
Abrams Capital’s Stake Value: $745 million
Percentage of Abrams Capital’s 13F Portfolio: 16.25%
Number of Hedge Fund Holders: 64
Lithia Motors, Inc. (NYSE:LAD) is an automotive retailer that sells new and old vehicles alongside providing financing, insurance, repair, and theft protection services. It is headquartered in Medford, Ohio, United States, and has hundreds of stores all over the country.
Lithia Motors, Inc. (NYSE:LAD) brought in $6.2 billion in revenue and $11.21 in non-GAAP EPS for its fiscal Q3 ending in September 2021. This allowed it to beat analyst estimates for both. Craig Hallum increased its price target for the retailer to $520 from $500 in July 2021, outlining that the recent earnings results beat all expectations.
Abrams Capital Management owned two million Lithia Motors, Inc. (NYSE:LAD) shares worth $745 million and constituting 16.25% of its portfolio as the third quarter of last year came to an end. Out of the 867 hedge funds polled by Insider Monkey for Q3 2021, 64 owned the company’s shares.
Lithia Motors, Inc. (NYSE:LAD)’s largest investor after Mr. Abrams is Andreas Halvorsen’s Viking Global who owns 803,472 shares worth $254 million.
You can also take a peek at the 10 Best New Stocks to Buy in 2021 According to Billionaire Paul Singer and Billionaire Julian Robertson On Interest Rates and His Top Stock Picks For 2021.
