David Abrams founded Abrams Capital Management in 1999. Before forming the Boston-based investment firm, Abrams worked at Seth Klarman’s Baupost Group for 10 years. He graduated from the University of Pennsylvania with a BA degree in History, where he also served on the Board of Advisors of the College of Arts and Sciences. Abrams didn’t have a finance background when he got his first job in New York in the early 1980s. He learned all about investing under Seth Klarman before setting out independently after a decade. He is a value investor, and in the ~12 years of his fund, he has achieved an annualized return of around 20%. His firm is like a one-man shop, which employs a small staff. Abrams Capital has 9 clients and discretionary assets under management (AUM) of $10.05 billion, as reported in the firm’s Form ADV dated 13 January 2025. The last reported 13F filing for Q4 2024 included $6.22 billion in managed 13F securities and a top 10 holdings concentration of 98.7%.
Abrams is known for maintaining a low public profile, but in a conversation on Columbia Business School’s ‘Value Investing with Legends’ Podcast series, he discussed the surface of his foundational principles when it comes to his investment philosophy. He starts by looking at the risks first and foremost, without any consideration of prospective gains. This is a reminder that the future remains unpredictable, which Abrams puts in the following words:
“When you look back, there’s one path that happened, but that doesn’t mean that going forward there’s only one path. In the future, there’s multiple paths.”
Abrams’ portfolio reflects a balanced approach with exposure to growth sectors like Industrials and Consumer Cyclical, while also maintaining moderate allocations in established industries such as Communication Services. He also believes that declining industries can present stability because they attract limited new entrants. This also implies that high-growth sectors are, on the contrary, characterized by intense competition, which necessitates a more detailed analysis of potential competitive threats. Here’s what Abrams had to say about this:
“If you have a shrinking industry and it’s dying, it’s like, people are not dying to get into that.”
Abrams serves as a director of several private companies. He is currently on the board of MITMCO, which manages the MIT endowment. Previously, he was a trustee of Berklee College of Music for 15 years, where he chaired the investment committee. He was also the trustee of Milton Academy.
That being said, we’re here with a list of billionaire David Abrams’ 10 stock picks with huge upside potential.
David Abrams of Abrams Capital Management
Our Methodology
To compile the list of billionaire David Abrams’ 10 stock picks with huge upside potential, we sifted through Q4 2024 13F filings of Abrams Capital Management from Insider Monkey. From these filings, we checked each stock’s upside potential from CNN and ranked the stocks in ascending order of this upside potential. We have also added Abrams Capital Management’s stake in each stock as well as the broader hedge fund sentiment for it.
Note: All data was sourced on May 8.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Billionaire David Abrams’ 10 Stock Picks with Huge Upside Potential
10. Asbury Automotive Group Inc. (NYSE:ABG)
Abrams Capital Management’s Stake: $512.44 million
Number of Hedge Fund Holders: 32
Average Upside Potential as of May 8: 8.11%
Asbury Automotive Group Inc. (NYSE:ABG) is an automotive retailer in the US. It offers a range of automotive products and services, such as new & used vehicles, vehicle repair & maintenance services, replacement parts, collision repair, and reconditioning of used vehicles. It also provides finance and insurance products, like arranging vehicle financing through third parties.
Asbury’s parts and service division achieved a record in gross profit in Q1 2025. Same-store gross profit in parts and service saw an increase of 5% year-over-year, with customer pay gross profit specifically up by 6%. This growth particularly accelerated in March and reached 7% due to warranty work. The gross profit margin for the parts and service business expanded by 1.7% to 58.3%, fueled by the segment’s increased profitability of higher-margin components.
The company also highlighted the customer growth pay gross profit at stores they have operated since 2014. This metric ~doubled and increased by 97% over 10 years. Asbury Automotive Group Inc. (NYSE:ABG) believes that the aging vehicle fleet and the increasing complexity of modern cars position the company’s stores favorably to capture further service growth.
Artisan Mid Cap Value Fund stated the following regarding Asbury Automotive Group, Inc. (NYSE:ABG) in its Q4 2024 investor letter:
“Our next largest new position was Asbury Automotive Group, Inc. (NYSE:ABG), a franchised automative dealer. Our purchase of ABG was in conjunction with selling auto retailer AutoNation (AN). We like both companies. Auto dealerships are good businesses, and both companies are growing well. However, we prefer ABG’s business mix to that of AN as AN is investing more heavily in its used car dealership business, which we believe is a poorer use of capital, and its captive finance arm is more vulnerable in an economic downturn. ABG remains solely focused on buying and running top-quality dealerships, and it has the best margins in the industry. ABG is also selling cheaply. As we see it, the market still thinks auto dealerships are highly cyclical, not giving them enough credit for their steadily growing parts and services business, secular market share gains versus independent mechanics and retailers, and their penetration growth in the used car market.”
9. Coupang Inc. (NYSE:CPNG)
Abrams Capital Management’s Stake: $286.13 million
Number of Hedge Fund Holders: 87
Average Upside Potential as of May 8: 9.02%
Coupang Inc. (NYSE:CPNG) owns and operates retail businesses through its mobile applications and internet websites in South Korea and internationally. It operates through the Product Commerce and Developing Offerings segments. It also performs operations and support services in the US, South Korea, Taiwan, Singapore, China, Japan, and India.
Coupang’s Product Commerce segment saw a 9% improvement year-over-year in Q4 2024. This was fueled by the increased efficiencies in operations, such as greater utilization of automation and technology, supply chain optimization, and the scaling of margin-accretive offerings. On February 26, Citi analysts assigned a Buy rating on the stock and raised its price target from $28 to $29.
This sentiment was driven by Coupang Inc.’s (NYSE:CPNG) impressive growth, a boost in active customers, and the strong performance of its Fastest Last-Mile delivery service. The number of active customers in the Product Commerce segment also grew by 10% year-over-year, and the average spend per active customer saw a constant currency increase of 6%.
Baron Fifth Avenue Growth Fund remains positive on the company’s long-term growth and stated the following regarding Coupang, Inc. (NYSE:CPNG) in its Q4 2024 investor letter:
“Shares of Coupang, Inc. (NYSE:CPNG), Korea’s largest e-commerce platform, corrected 10.5% in the fourth quarter (even though they finished 2024 up 33.9%). While the company delivered solid quarterly results with 27% year-on-year revenue growth with Farfetch and other initiative losses narrowing significantly, its product commerce EBITDA margin missed expectations due to a temporarily elevated spending on technology and automation. Sluggish domestic consumption in Korea, with the e-commerce market experiencing flattish to negative growth, and political uncertainty stemming from President Yoon’s declaration of martial law and subsequent impeachment, further weighed on the stock. Despite these short-term challenges, we maintain a positive outlook on Coupang’s long-term market share expansion and margin growth trajectory, and view Coupang as one of the most competitively advantaged e-commerce businesses globally, with significant runway for both revenue and earnings growth.”
