99% of Billionaire Abrams’ Portfolio is in These 11 Stocks

2. Lithia Motors, Inc. (NYSE:LAD)

Abrams Capital Management’s Q3 2024 Investment: $759.54 Million

Percentage of Abrams Capital Management’s Portfolio: 12.19%

Number of Hedge Fund Holders: 43

Lithia Motors, Inc. (NYSE:LAD) operates auto and truck dealerships that sell new and used vehicles and parts. It also conducts repair and maintenance services. The automotive dealership company has over 101,000 vehicles at 300 locations in the US, more than 1,000 vehicles at 15 locations in Canada, and over 4,000 vehicles at 151 locations in the UK. With more than 51 brands, it is considered one of the fastest-growing companies in the US.

Up by about 20.35% year to date, it is one of the best-performing stocks in Abrams Capital Management portfolio. Lithia Motors, Inc. (NYSE:LAD) delivered solid third-quarter results on October 23, 2024. In the quarter it leveraged its size and scale to seize new opportunities while focusing on operational efficiencies. Revenues in the quarter were up 11% year over year to $9.2 billion. Adjusted earnings per share totaled $8.21, beating consensus estimates of $7.59 a share.

Lithia Motors, Inc. (NYSE:LAD) has also embarked on an expansion drive with the acquisition of Sunrise Chevrolet Buick GMC and Sunrise Buick GMC. These purchases are expected to add $240 million in yearly revenue. The company’s earnings are also expected to grow by 51% in the next few years, showing its potential for long-term success.

As per the Insider Monkey’s database, 43 hedge fund portfolios held Lithia Motors, Inc. (NYSE:LAD) at the end of the third quarter which was 35 in the previous quarter.

Madison Investments Madison Mid Cap Fund stated the following regarding Lithia Motors, Inc. (NYSE:LAD) in its Q3 2024 investor letter:

“During the quarter we added three new holdings: Graco, Lithia Motors, Inc. (NYSE:LAD), and Asbury Automotive. We purchased shares in Lithia Motors and Asbury Automotive, two of the largest auto franchise dealer groups in the country, owning a diversified portfolio of dealerships ranging from Toyota to Ford to Mercedes. Investors tend to pay a lot of attention to the level of new car sales, but dealers actually earn more in profits from parts and service than they do from selling new cars, and this steady business provides a nice ballast throughout the economic cycle. In addition, we believe these businesses have a long runway to create value via consolidation of this fragmented industry, as the advantages of scale are increasing.”