David Abrams’ Abrams Capital Management has recently initiated a new position in Moneygram International Inc (NASDAQ:MGI). According to a 13G Form filed with the U.S. Securities and Exchange Commission, the investment firm’s new stake amounts to around 2.89 million Common Shares, representing 5.4% of the company’s outstanding stock.
Abrams Capital Management is an employee-owned hedge fund that was founded in 1999 by David Abrams. Before starting the firm, Mr. Abrams worked at Seth Klarman’s Baupost Group for a decade, where he gained a great deal of experience as a value investor. This value oriented approach is now a core element of Abrams Capital Management’s investment strategy. The fund invests in the U.S. public equity markets, employing fundamental analysis, backed by in-house research, to find the right pick. This method has allowed the Boston-based firm to achieve annual returns of around 20% since its inception. Furthermore, the institutional investor boasts an equity portfolio valued at around $1.7 billion, which is made up primarily of companies belonging to the information technology and finance sectors.
According to Abrams Capital Management last 13F filing, its largest positions are The Western Union Company (NYSE:WU), American International Group Inc (NYSE:AIG), and Microsoft Corporation (NASDAQ:MSFT), accounting for almost 50% of its equity portfolio. The fund seems particularly bullish regarding Microsoft stock, as it increased its stake in the company by 45% during the third quarter. The holdings in Western Union and American International Group on the other hand only experienced a minor increase during the same period, yet they continue to be David Abrams’ top picks.
Following its purchase of 2.8 million shares, Abrams Capital Management is now one of Moneygram International Inc (NASDAQ:MGI)’s largest shareholders. The stake was acquired just a few weeks after the company announced the departure of its Executive Vice President for Europe and Africa. This latest change to management is part of an ongoing global transformation process, which already resulted in numerous organizational shifts. This process, which includes altering its leadership, is expected to make the company leaner and more profitable.
Moneygram International is a $484 million market cap international provider of money transfers and payment services. The firm was founded in 1926 and is headquartered in Dallas, Texas. Apart from offering customers bill payment services, issuing money orders, and processing official checks, the company provides money transfer services on the Internet via its MoneyGram Online service. Moneygram operates in more than 200 countries through a global network of 347,000 agent locations.