David Abrams’ Hedge Fund Is Betting On These 5 Stocks

3. Somnigroup International Inc (NYSE:SGI)

Abrams Capital Management Equity Stake: $518.19 Million

Number of Hedge Fund Holders: 72

Somnigroup International Inc (NYSE:SGI) is one of billionaire David Abrams’ best stock picks. The stock has a consensus Strong Buy rating and its average price target of $103.14 suggests an upside potential of more than 30%.

On April 8, Raymond James added Somnigroup International Inc (NYSE:SGI) to its analyst favorites list. According to Raymond James, the recent pullback in Somnigroup stock presents a compelling risk/reward opportunity.

The equity research firm also noted that Somnigroup stands to benefit from adding synergies from the Mattress Firm integration. Somnigroup acquired the Mattress Firm Group for around $5 billion in a transaction completed in February 2025.

Raymond James sees revenue and cost synergies from the integration surpassing initial expectations. It says this should lead to solid free cash flow generation over the medium-term. The firm also expects Somnigroup to continue gaining market share across all segments.

Previously on March 26, Jefferies upgraded Somnigroup to Buy from Hold, though it did lower the price target to $88 from $90. Jefferies noted that Somnigroup has strengthened its competitive position, saying that the recent pullback in the stock offers an attractive entry point.

However, the firm pointed out that rising input costs could pressure margin. In this light, Jefferies trimmed its 2026 EPS estimates for Somnigroup, though it said price hikes could help the company offset input costs headwinds.

Based in Lexington, Kentucky, Somnigroup International Inc (NYSE:SGI) makes and sells mattresses and sleep products. It’s the largest bedding company in the world with operations in more than 100 countries. Somnigroup sells its products under a variety of brands, including Tempur-Pedic, Sealy, Mattress Firm, and Stearns & Foster.