Mysterious Billionaire David Abrams Reveals Top Picks; Western Union Company (WU) Retains Top Spot

#3. Microsoft Corporation (NASDAQ:MSFT)

– Number of shares owned by Abrams Capital Management as of March 31: 4.98 Million

– Value of Abrams Capital Management’s holding as of March 31: $275.05 Million

David Abrams’ hedge fund left unchanged its equity position in Microsoft Corporation (NASDAQ:MSFT) during the first three months of 2016 at 4.98 million shares, which were valued at $275.05 million on March 31. The untouched position amassed 13.0% of Abrams Capital’s portfolio at the end of March. Earlier this week, Microsoft announced the sale of its feature phone business for $350 million to Foxconn’s subsidiary FIH Mobile Ltd. and HMD Global. The deal also involves the sale of Microsoft’s mobile manufacturing facility in Vietnam. Microsoft’s decision to abandon the cell phone unit may enable the Nokia brand to make a return to the mobile device market, after losing value in recent years. The tech giant acquired Nokia’s once-powerful business in 2014 for a stunning $7.2 billion, so the deal wasn’t overly successful considering the $350 million-sale price. Microsoft shares are down 8% since the start of 2016. Ken Fisher’s Fisher Asset Management is the owner of 18.22 million shares of Microsoft Corporation (NASDAQ:MSFT) as of the end of the first quarter.

#2. Franklin Resources Inc. (NYSE:BEN)

– Number of shares owned by Abrams Capital Management as of March 31: 7.95 Million

– Value of Abrams Capital Management’s holding as of March 31: $310.25 Million

Abrams Capital Management upped its position in Franklin Resources Inc. (NYSE:BEN) by 2.67 million shares or approximately 50% during the first quarter of 2016 to 7.95 million shares. The increased stake was worth $310.25 million on March 31 and constituted 14.7% of the fund’s portfolio. The financial performance of the global investment management organization has been hurt by a sustained decline in assets under management. The company’s AUM at the end of March were $742.6 billion, down 4% from the AUM figure recorded at the end of September and 16% lower year-over-year. Precisely, Franklin Resources has been impacted by rapidly-growing customer demand for low-fee passive investment products such as exchange-traded funds, which are favored by the investment community at the expense of Franklin’s and other firms’ mutual funds. Even so, Franklin Resources plans to expand its product portfolio to include ETF products as well. Shares of Franklin Resources are 3% in the red year-to-date. Ric Dillon’s Diamond Hill Capital reported ownership of 5.88 million shares of Franklin Resources Inc. (NYSE:BEN) in its latest 13F.

#1. The Western Union Company (NYSE:WU)

– Number of shares owned by Abrams Capital Management as of March 31: 21.61 Million

– Value of Abrams Capital Management’s holding as of March 31: $416.83 Million

The Western Union Company (NYSE:WU) retained the top spot as the largest equity holding in Abrams Capital’s equity portfolio. The Boston-based asset manager did not sell or buy any shares of Western Union during the March quarter, remaining with a stake of 21.61 million shares valued at $416.83 million on March 31. Mr. Abrams’ largest equity position accounted for 19.7% of his fund’s portfolio on March 31. The provider of money movement and payment services has seen its market value gain 6% since the beginning of the year. The company’s consolidated revenues for the first quarter of 2016 dropped 2% year-on-year to $1.30 billion. The decrease in Western Union’s top-line figure was mainly driven by the strengthening of the U.S. dollar against foreign currencies, which impacted the revenue figure by 5% despite having foreign currency hedges in place. The decrease was partly offset by higher number of transactions in the company’s Consumer-to-Consumer business. John W. Rogers’ Ariel Investments owned 7.77 million shares of The Western Union Company (NYSE:WU) at the end of March.

Disclosure: None