Alphabet Inc at a -3.07% Portfolio Impact

This article first appeared on GuruFocus.

Abrams Capital trims its Alphabet stake while maintaining a concentrated, value-driven portfolio

David Abrams (Trades, Portfolio), founder and CEO of Abrams Capital Management, recently submitted his 13F filing for the second quarter of 2026, revealing key adjustments to his concentrated portfolio. Abrams established the Boston-based firm in 1999 after a decade working alongside Seth Klarman (Trades, Portfolio) at Baupost Group. Describing itself as “opportunistic,” Abrams Capital Management employs a fundamental, value-oriented approach, focusing on long-term investments in a limited number of holdings across stocks, debt instruments, distressed debt, and illiquid assets.

Key Position Reduces

David Abrams (Trades, Portfolio) reduced his position in one stock during the quarter, with the most significant change being a reduction in Alphabet Inc (NASDAQ:GOOGL). The guru sold 495,273 shares, resulting in a -26.55% decrease in the total share count and a -3.07% impact on the overall portfolio. The stock traded at an average price of $358.82 during the quarter. Despite the trim, Alphabet has returned -13.92% over the past three months and remains up 10.80% year-to-date, indicating that Abrams may be locking in gains or rebalancing his exposure to the tech giant.

Portfolio Overview

At the end of the second quarter of 2026, Abrams’s portfolio comprised 11 stocks, with a notable concentration in his top holdings. The largest position was Loar Holdings Inc (NYSE:LOAR) at 47.15% of the portfolio, followed by Lithia Motors Inc (NYSE:LAD) at 13.2%, Alphabet Inc (NASDAQ:GOOGL) at 8.94%, Somnigroup International Inc (NYSE:SGI) at 8.3%, and Asbury Automotive Group Inc (NYSE:ABG) at 7.91%. This heavy concentration underscores Abrams’s conviction in his highest-conviction ideas, a hallmark of his value-oriented investment philosophy.

The portfolio’s sector allocation is primarily concentrated in five industries: Industrials, Consumer Cyclical, Communication Services, Financial Services, and Healthcare. This diversification across sectors, while maintaining a focused stock count, reflects Abrams’s approach of seeking undervalued opportunities across different market segments. The significant weighting in Industrials, driven by the Loar Holdings position, suggests a strong conviction in the aerospace and defense components sector.

Summary of New Buy

During the second quarter of 2026, David Abrams (Trades, Portfolio) did not initiate any new positions in his portfolio. This is consistent with his long-term, concentrated investment approach, which prioritizes adding to existing high-conviction holdings over diversifying into new names. The absence of new buys suggests that Abrams found the most attractive opportunities within his current portfolio, or that market valuations did not meet his strict value criteria during the period.

Key Position Increases

Abrams did not increase any existing positions during the quarter. The lack of position increases, combined with the single reduction in Alphabet, indicates a period of relative stability in the portfolio. This could reflect a cautious stance on market conditions or a deliberate pause to reassess opportunities. For value investors, this stability may signal that Abrams is waiting for more compelling entry points before deploying additional capital.

Summary of Sold Out

David Abrams (Trades, Portfolio) did not completely exit any positions during the second quarter of 2026. The portfolio’s composition remained largely intact, with the only notable change being the reduction in Alphabet. This continuity suggests that Abrams remains confident in his existing holdings and their long-term value potential, despite any short-term market fluctuations or sector-specific headwinds.

For value investors tracking Abrams’s moves, the key takeaway from this filing is the deliberate reduction in Alphabet, which may indicate a valuation concern or a strategic rebalancing toward other opportunities. With the portfolio still heavily weighted in Loar Holdings and automotive-related stocks, Abrams continues to demonstrate a preference for businesses with tangible assets and clear fundamental value, aligning with his established investment philosophy.