In this article, we will discuss 5 best stocks to invest in today according to David Abrams. If you want to read our detailed analysis of Abrams’ history, investment philosophy, and hedge fund performance, go directly to 15 Best Stocks to Invest in Today According to David Abrams.
5. TransDigm Group Incorporated (NYSE: TDG)
Abrams’ Stake Value: $349,087,000
Percentage of Jorge David Abrams’ 13F Portfolio: 7.75%
Number of Hedge Fund Holders: 57
TransDigm Group Incorporated (NYSE: TDG) designs, manufactures, and sells airplane components across the world. It was founded in 1993 and is ranked fifth on the list of 15 best stocks to invest in today according to David Abrams. Shares of TransDigm Group Incorporated (NYSE: TDG) are up 19.81% in the past 12 months.
On August 11, Truist analyst Michael Ciarmoli raised the price target on TransDigm Group Incorporated (NYSE: TDG) to $600 from $590 and kept a “Hold” rating on the shares. On August 10, TransDigm Group Incorporated (NYSE: TDG) declared earnings for the second quarter of 2021. It reported earnings per share of $3.33, surpassing the estimates by $0.34. The revenue over the period was $1.22 billion, up 19.6% YoY.
The hedge fund chaired by David Abrams holds 539,305 shares in TransDigm Group Incorporated (NYSE: TDG) worth over $349.09 million.
Vulcan Value Partners, in its second-quarter 2021 investor letter mentioned TransDigm Group Incorporated (NYSE: TDG). Here is what the fund said:
“TransDigm Group Inc., another material contributor during the quarter, is an aerospace manufacturer providing highly engineered, niche components for use on commercial and military aircraft. The vast majority of the company’s profits come from aftermarket sales. Its business was impacted by the global pandemic; however, the company has been able to maintain margins despite strong revenue headwinds, and it continues to generate strong free cash flow.”
4. Alphabet Inc. (NASDAQ: GOOG)
Abrams’ Stake Value: $357,576,000
Percentage of Jorge David Abrams’ 13F Portfolio: 7.94%
Number of Hedge Fund Holders: 190
Alphabet Inc. (NASDAQ: GOOG) sells internet advertising in the United States, Europe, the Middle East, Africa, Asia-Pacific, Canada, and Latin America. The company was incorporated in 1998 and is placed fourth on the list of 15 best stocks to invest in today according to David Abrams. Alphabet Inc. (NASDAQ: GOOG) shares have returned 75.19% to investors over the course of the past 12 months.
Alphabet Inc. (NASDAQ: GOOG) is getting the attention of the smart money, as 190 hedge funds tracked by Insider Monkey reported owning stakes in the company in the second quarter of 2021, up from 185 funds a quarter earlier.
Baron Opportunity Fund, in its second-quarter 2021 investor letter, mentioned Alphabet Inc. (NASDAQ: GOOG). Here is what Baron Opportunity Fund has to say about Alphabet Inc. (NASDAQ: GOOG) in its letter:
“Alphabet Inc. is the parent company of Google, the world’s largest search and online advertising company and a top cloud computing player. Shares of Alphabet were up in the quarter given continued recovery in ad spending, strong cloud revenue growth, and improved cost controls. Alphabet’s total revenue grew 32%, beating the Street’s estimate of 25%, with search revenues up 30%, YouTube revenue up 49%, and total cloud revenue up 46% (with Google Cloud Platform growing much faster). Moreover, Google’s operating margins expanded over 1,000 basis points from 19% to just under 30%. We retain high conviction in Alphabet’s merits as it continues to benefit from growth in mobile and online video advertising, which accrues to its core assets of search, YouTube, and the Google ad network. We are further encouraged by Alphabet’s investments in cloud computing, artificial intelligence (AI), autonomous driving (Waymo), and life sciences.”
3. Asbury Automotive Group, Inc. (NYSE: ABG)
Abrams’ Stake Value: $362,999,000
Percentage of Jorge David Abrams’ 13F Portfolio: 8.06%
Number of Hedge Fund Holders: 26
Asbury Automotive Group, Inc. (NYSE: ABG) and its subsidiaries are car retailers in the United States. It was founded in 1996 and ranks third on the list of 15 best stocks to invest in today according to David Abrams. Shares of Asbury Automotive Group, Inc. (NYSE: ABG) rallied 71.68% in the last 12 months, resulting in a $3.69 billion market capitalization.
On July 27, Asbury Automotive Group, Inc. (NYSE: ABG) posted earnings for the second quarter of 2021. It reported earnings per share of $7.78, beating the estimates by $2.69. The revenue over the period was $2.58 billion, up 77.9% YoY, beating the market predictions by $220 million. On July 26, Morgan Stanley analyst Adam Jonas downgraded Asbury Automotive Group, Inc. (NYSE: ABG) to “Equal Weight” from “Overweight” and gave a price target of $201, up from $196. Franchise auto dealers have benefited dramatically from the most robust supply-demand imbalance and inventory tightness in memory. Still, Jonas tells investors after another record-high quarter, cycle-high conditions provide an excellent opportunity to reduce exposure to franchise dealers before secular issues emerge.
Abrams Capital Management holds more than 2.12 million shares in Asbury Automotive Group, Inc. (NYSE: ABG), worth $363 million. This represents 8.06% of their portfolio.
2. Facebook, Inc. (NASDAQ: FB)
Abrams’ Stake Value: $419,006,000
Percentage of Jorge David Abrams’ 13F Portfolio: 9.31%
Number of Hedge Fund Holders: 266
Facebook, Inc. (NASDAQ: FB) develops solutions that enable people worldwide to engage and share with their friends and family. It was incorporated in 2004 and stands second on the list of 15 best stocks to invest in today according to David Abrams. Facebook, Inc. (NASDAQ: FB) shares have offered investors more than 28.85% over the last 12 months.
Abrams Capital Management holds 1.21 million shares in Facebook, Inc. (NASDAQ: FB) worth over $419 million, representing 9.31% of their portfolio. There were 266 hedge funds in our database that held stakes in Facebook, Inc. (NASDAQ: FB) in the second quarter of 2021, compared to 257 funds in the first quarter.
In its second-quarter 2021 investor letter Polen Capital mentioned Facebook, Inc. (NASDAQ: FB). Here is what the fund said:
“Facebook was the top contributor to our return for the second consecutive quarter. The company has over $1 trillion market capitalizations. Yet, based on first quarter 2021 results, FB is currently still growing revenue at over 30% organically! In fact, last quarter Facebook grew revenue 48% year over year. Facebook has generated earnings and intrinsic value growth for many years, driven largely by the mostly free services the company provide to people who can easily choose to stop using them and spend their time elsewhere.
That said, we are regularly asked about the perceived high regulatory risk around Facebook. We examine risks to businesses and, in particular, regulatory risks through a lens of risk exposure versus actual risk. For instance, the antitrust complaints globally against Facebook based on their size, influence, and strong competitive positioning, definitionally exposes these companies to more regulatory risk than much smaller businesses. However, we do not believe risk exposure is the same as actual risk…” (Click here to see the full text)
1. Lithia Motors, Inc. (NYSE: LAD)
Abrams’ Stake Value: $807,921,000
Percentage of Jorge David Abrams’ 13F Portfolio: 17.95%
Number of Hedge Fund Holders: 63
Lithia Motors, Inc. (NYSE: LAD) is an automotive retailer in the United States. Lithia Motors, Inc. (NYSE: LAD) ranks first in the list of 15 best stocks to invest in today according to David Abrams. Lithia Motors, Inc. (NYSE: LAD) shares have returned 26.79% to investors over the course of the past 12 months.
On August 24, Lithia Motors, Inc. (NYSE: LAD) extended its multi-channel network to purchase Rock Honda, a Top 20 Honda new volume dealer in the United States. On July 27, Craig-Hallum analyst Ryan Sigdahl raised the price target on Lithia Motors, Inc. (NYSE: LAD) to $520 from $500 and maintained a “Buy” rating on the shares.
David Abrams’ Abrams Capital Management holds 2.35 million shares in Lithia Motors, Inc. (NYSE: LAD), worth $807.92 million, representing 17.95% of their portfolio. In addition, hedge funds are loading up on Lithia Motors, Inc. (NYSE: LAD), as Insider Monkey’s data shows that 63 hedge funds held a stake in the company in the second quarter of 2021, compared to 40 funds in the quarter earlier.
You can also take a peek at 10 Best Stocks to Invest In Right Now According to Seth Klarman and Top 10 Stocks to Invest in For Beginner Investors
