Abrams Capital Buys Covidien, InterXion, Rayonier Advanced Materials

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Abrams Capital Management disclosed that its equity portfolio had a market value of around $1.69 billion for the third quarter based on its 13F filing with the Securities and Exchange Commission (SEC).

David Abrams is the manager of Abrams Capital Management. The hedge fund manages nearly $8 billion across three funds. Abrams was a veteran at Baupost Group, the hedge fund managed by Seth Klarman. The main funds of Abrams Capital Management delivered 19% return on an annualized basis from 2009 to 2013.

Abrams Capital’s largest stockholdings

The Western Union Company (NYSE:WU) is the largest stockholding of Abrams Capital Management based on its regulatory filing. The hedge fund owned more than 21.6 million shares of the company worth approximately $346.6 million. The stock accounts 20.5% of its equity portfolio.

Its second largest stockholding is American International Group Inc (NYSE:AIG) followed by Microsoft Corporation (NASDAQ:MSFT).  Abrams Capital Management owned more than 4.8 million AIG shares worth around $259.36 million and over 4.9 million MSFT shares with a market value of approximately $230.87 million.

American International Group Inc (NYSE:AIG) and Microsoft Corporation (NASDAQ:MSFT) account 15.34% and 13.66% of the hedge fund’s equity portfolio.

Abrams Capital Management – New stockholdings

During the quarter, Abrams Capital Management purchased 2.62 million shares of Covidien plc (NYSE:COV), a medical device manufacturer. Its stake in the company is worth around $226.65 million. C

Last week, Covidien plc (NYSE:COV) reported strong financial results for its fiscal fourth quarter. The company reported a 26.4% increase in earnings to $1.15 per share and a 7% increase in revenue to $2.73 billion. Its financial results were better than the consensus estimate of $1.01 in earnings per share on $2.68 billion in revenue.

Abrams Capital Management bought 820,269 shares of InterXion Holding NV (NYSE:INXN), a provider of carrier-neutral colocation data center services in Europe. Its stake in the company is worth around $22.71 million.

Wall Street analysts have a consensus Hold rating for the shares of InterXion Holding NV (NYSE:INXN).

Abrams Capital Management also purchased 2.5 million shares of Rayonier Advanced Materials Inc (NYSE:RYAM) worth approximately $82.27 million. The company produces specialty cellulose fibers.

Last month, the company reported $19 million net income or $0.46 in earnings per share for the third quarter. Its revenue was $254 million.

Abrams Capital Management – Increased and sold out positions

The hedge fund increased its positions in Global Eagle Entertainment Inc (NASDAQ:ENT) by 657,464 shares to 5 million shares. Its stake has a market value of approximately $56.1 million.

Abrams Capital Management also bought additional 740,304 shares of CST Brands Inc (NYSE:CST) to more than 3.74 million worth approximately $134.46 million.

During the quarter, the hedge fund also increase its position in Microsoft Corporation (NASDAQ:MSFT) by 1.56 million shares, American International Group Inc (NYSE:AIG) by 56,236 shares and The Western Union Company (NYSE:WU) by 181,230 shares.

It sold all of its shares in Gentiva Health Services, Inc. (NASDAQ:GTIV), Navient Corp (NASDAQ:NAVI), Rayonier Inc.(NYSE:RYN) and others.

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