Abrams Capital, the Boston-based, value-focused hedge fund founded by reclusive billionaire David Abrams, recently revealed its 13F portfolio as of the end of 2016 via a filing submitted with the SEC. According to the filing, Abrams Capital’s portfolio was worth $2.72 billion at the end of December, which was only a fraction of the $8.5 billion in assets that the fund, one of the 140 Biggest and Most Famous Activist Hedge Funds in the world, currently manages.
Being a value investor, Mr. Abrams makes very few changes to his portfolio on a quarterly basis and as the recent 13F filing showed, the fourth quarter of 2016 was no different. Unlike several other hedge funds that used the fourth quarter rally to reduce their holdings, Abrams Capital didn’t reduce its stake in any of its holdings during the period. However, it did sell off its entire stake in two stocks during the fourth quarter, in addition to initiating stakes in five stocks and increasing its holding in two stocks. In this article, we are going to focus on the five major moves the fund made during the final quarter of 2016.
We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively the most bullish on. Over the past year, this strategy generated returns of 39.7%, topping the 24.1% gain registered by S&P 500 ETFs. Insider Monkey’s enhanced small-cap strategy registered gains of more than 45% over the last 12 months and outperformed SPY by more than 30 percentage points in the last 4.5 years (see details here).
Opus Bank (NASDAQ:OPB)
Abrams Capital liquidated its entire stake of 1.05 million shares of Opus Bank (NASDAQ:OPB) during the final three months of 2016. The fund had initiated its stake in the commercial bank during the second quarter of 2014, which was the same quarter in which the bank had its IPO. Since the end of that period, Opus Bank (NASDAQ:OPB)’s stock has declined by more than 26%, with most of those losses coming in October of last year after the company reported disastrous numbers for its third quarter and suspended its quarterly dividend payout. On February 13, Opus Bank revealed that it has received a stock permit from the California Commissioner of the Department of Business Oversight for the sale of $53 million of its common stock in a private placement that it had previously announced. Most analysts who cover the stock are bearish on it, citing the company’s excessive leverage and the dismal health of the bank’s loan book. However, the hedge funds that we track in our database collectively grew more bullish on the bank heading into 2017, with a net total of four more funds long the stock, bringing the total to 14.
Head to the following page, where we’ll analyze two other big moves made by Abrams during Q4.
