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Abrams Capital’s Q2 2025 13F: A Masterclass in Measured Optimism
When Abrams Capital Management drops a quarterly 13F, it’s never a “spray and pray” list of tickers. David Abrams runs an ultra-concentrated portfolio, and every holding is there because it’s earned the right to be there.
The firm’s latest filing, for Q2 2025, shows a strategy that’s not chasing headlines—but quietly positioning for a world where the industrial cycle is strong, the consumer is resilient, and the market’s doom narrative is at least a little overdone.
1. LOAR: The Main Course, Even After a Trim
- Loar Holdings (LOAR) is still the portfolio’s heavyweight champ at 45.17% of assets, even after Abrams cut the position by 14.37%.
- LOAR lives in the aerospace/defense supply chain—selling precision-engineered parts to commercial and military customers.
Macro Signal: This isn’t a bearish exit. Trimming here suggests Abrams sees industrial demand as still robust but wants to take some gains after a big rally. With defense budgets locked in and airline backlogs still years long, they’re betting on durable demand—just not on valuations staying this hot forever.
2. Consumer Discretionary Power Trio
Three big bets—Lithia Motors (LAD), Asbury Automotive (ABG), and Coupang (CPNG)—make it clear Abrams thinks the consumer slowdown narrative is exaggerated, at least in the automotive sales segment.
- LAD & ABG: Auto dealers with strong pricing power, disciplined inventory, and high-margin service businesses.
- CPNG: South Korea’s e-commerce giant, giving Abrams consumer exposure that’s not tied 1:1 to U.S. Federal Reserve policy, but still would more than likely gain from prospective gradual rate cuts, also benefitting from a weaker dollar due to prevailing doubts surrounding the USD’s efficacy as the world’s reserve currency, as investors rotate into emerging market equities.
Macro Signal: Abrams sees a “soft landing” over a full-on consumer collapse. These aren’t the stocks you buy if you think a deep recession is around the corner—they’re the stocks you buy if you think consumers keep spending in select high-margin categories.
3. Tech Titans as Core Infrastructure
- Alphabet (GOOGL) and Meta Platforms (META) remain untouched.
- Both throw off enormous free cash flow, dominate their markets, and have balance sheets strong enough to handle turbulence, and gain in rate-cutting environments.
Macro Signal: Abrams isn’t using these as trades—they’re structural core holdings. Even in a higher-rate world, these companies can self-fund growth, buy back stock, and withstand shocks.
4. Finance, Risk, and the Next Frontier
- Willis Towers Watson (WTW): Sticky corporate insurance & benefits consulting—businesses that remain quite steady during periods of turbulence.
- CRCL (Circle Internet Financial): New position. Circle is a pure play on USD stablecoins and regulated blockchain payment infrastructure, likely to perform well in a soft-landing, gradual rate-decline environment.
Macro Signal: This is a two-part bet—corporates will keep spending to manage risk, and blockchain-based finance will keep gaining legitimacy (and revenue) in the regulated economy, especially in a risk-on environment induced by gradual rate cuts.
5. Energy Income Hedge
- Energy Transfer (ET): Yield-heavy midstream play with stable volumes, also a gainer from AI energy buildout.
- Not a levered bet on oil prices—more of a “get paid while you wait” position that works if inflation reaccelerates.
Macro Signal: A quiet hedge against energy price shocks and a way to clip a strong yield.
6. Defensive Mobility & Optionality
- U-Haul (UHAL, UHALB): A classic Abrams holding—countercyclical in the context of its self-storage offerings, asset-backed, and cash-flowing. Moving and storage can benefit in economic transitions, whether it’s people chasing jobs or downsizing in tougher times.
- Nuvalent (NUVB): Small biotech position—more of an asymmetric lottery ticket than a macro signal.
7. What They’re Done With
- Cantaloupe (CTLP): Fully sold. This was a fintech/automated retail play, and the exit says they’re less bullish on this particular small-cap, hardware-heavy fintech in a high-rate, higher-cost capital environment–oh, and more importantly, it is currently in the process of being acquired (taken private).
The Macro Playbook in One Sentence
Abrams’ Q2 2025 portfolio says: The U.S. is not heading for a deep recession, but industrial froth needs trimming, select consumer names can still thrive, big tech is core rate-cut ballast, and it never hurts to collect yield or take an intelligent flyer on the future of money.
Sector Weight Snapshot
- Industrials: 45% (down from ~53% last quarter)
- Consumer Discretionary: ~31% combined
- Communications: ~11%
- Finance: ~4.5% + new CRCL
- Energy: ~1.8%
- Other/Optionality: <1%
Takeaway:
If this portfolio were a dinner plate, LOAR is the steak, consumer discretionary is the potatoes, big tech is the green vegetable you keep because it’s good for you, ET is the glass of red wine, and CRCL is the exotic side dish you order just to see what happens.
DISCLAIMER: This analysis of the aforementioned stock security is in no way to be construed, understood, or seen as formal, professional, or any other form of investment advice. We are simply expressing our opinions regarding a publicly traded entity.
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