David Tepper, founder of Appaloosa Management, was listed by Forbes as the highest-earning among the top 40 hedge fund managers and traders for 2012. With a personal income of $2.2 billion last year, the alpha investor beat out other top earning Gurus for the top slot, including Carl Icahn, Steven Cohen, James Simons, George Soros, Ken Griffin, Ray Dalio, David Shaw, Leon Cooperman and Daniel Loeb. According to GuruFocus Real Time Picks, David Tepper made major tweaks to his portfolio with 30 trades in the second quarter, either reducing or selling out. While 14 billionaire investors added or bought new holdings in Apple (AAPL), David Tepper is one of four Gurus reducing their AAPL positions in the second quarter of 2013.
Here is Apple's second quarter 2013 highlight related to Tepper’s most recent reduction and other investors slicing AAPL. Read the GuruFocus summary of all of Tepper’s second quarter trades.
Apple Inc. (AAPL)
Once Appaloosa Management’s top public equity holding, Apple Inc. recently reported selling 31.2 million iPhones, a record for the June 2013 quarter, compared to 26 million in the year-ago quarter. Apple also sold 14.6 million iPads during the quarter, compared to 17 million in the year-ago quarter. Macs are also down for the quarter, with sales of 3.8 million, compared to 4 million in the year-ago quarter, according to a company press release.
Tepper’s updated portfolio shows a 2.2% weighting for AAPL. His new number one is 8,186,960 shares of SPDR S&P 500 ETF (SPY), with an 18.9% weighting. At the quarter ending Dec. 31, 2012, David Tepper owned 912,661 shares of AAPL, valued at $486 million. His current holding dropped to 383,004 shares after this trade:
Guru Action: As of June 30, 2013, David Tepper reduced his AAPL position by 29.07%. Tepper sold 12,657,009 shares at an average price of $12.87 for a gain of 24.7%. He sold 156,996 at an average price of $430.74 for a gain of 13.7%.
Company Update: Down 20% over 12 months, Apple Inc. has a market cap of $457.1 billion. Shares traded at around $503.81 with a P/E ratio of 12.00. The dividend yield of Apple Inc. stocks is 2.30.
Apple Inc. (AAPL) reported financial results for its fiscal 2013 third quarter ended June 29, 2013, posting quarterly revenue of $35.3 billion and quarterly net profit of $6.9 billion, or $7.47 per diluted share. These results compare to revenue of $35 billion and net profit of $8.8 billion, or $9.32 per diluted share, in the year-ago quarter. Apple’s gross margin was 36.9% compared to 42.8% in the year-ago quarter. International sales accounted for 57% of the quarter’s revenue, according to a company press release. Apple’s board of directors declared a cash dividend of $3.05 per share of the company’s common stock.
The company generated $7.8 billion in cash flow from operations during the quarter and returned $18.8 billion in cash to shareholders through dividends and share repurchases, according to Apple’s CFO Peter Oppenheimer.
Tim Cook, Apple’s CEO said, “We are really excited about the upcoming releases of iOS 7 and OS X Mavericks, and we are laser-focused and working hard on some amazing new products that we will introduce in the fall and across 2014.”
Other Guru Action: As of June 30, 2013, Murray Stahl sold out his AAPL position. He sold 3,000 shares at an average price of $430.74 for a gain of 15.9%.
Chris Davis also sold out his AAPL position, unloading 585 shares at an average price of $430.74 for a gain of 15.9%.
Tom Russo also sold out his AAPL position, unloading 16 shares at an average price of $430.74 for a gain of 13.7%.
David Tepper’s hedge fund, Appaloosa Management, had net returns of almost 30% last year, with an average annual return of 23.3% over five years, and 29.2% since inception in 1993.
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