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David Tepper Reports 5 Stock Buys in Q3

November 18, 2013 | About:

Holly LaFon

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Hedge fund manager David Tepper returned 16.8% in the first half of 2013, bringing his net annualized 20-year return to 28%. His $17 billion hedge fund Appaloosa Management in the third quarter reported that he purchased five new holdings, for a total of 64 stocks in his $6.28 billion portfolio. Tepper has placed 21.6% of his portfolio in ETF, options and preferred stocks as the largest sector represented, followed by 18.6% in industrials and 18.6% in financial services.

Tepper is frequently bullish on the U.S. economy. In October, he told CNBC he did not foresee the Fed tapering in the near future, and that in general markets would continue to climb though be hindered by the government uncertainty.

Tepper’s Five New Stocks

Freeport-McMoRan Copper & Gold (FCX)

Tepper bought 1,754,639 shares of Freeport-McMoRan, representing 0.92% of his portfolio. The share price in the third quarter was on average around $31. The price has increased 20% from the average.

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Freeport McMoRan is a global natural resources company dealing in copper, gold, molybdenum, cobalt, oil and gas, and the world’s second-largest producer of mined copper.

Freeport-McMoRan Copper & Gold has a market cap of $38.05 billion; its shares were traded at around $36.65 with a P/E ratio of 13.50 and P/S ratio of 1.90. The dividend yield of Freeport-McMoRan Copper & Gold stocks is 3.40%.

In the third quarter Freeport-McMoRan reported $6.17 billion in revenue, up from $4.42 billion in third quarter 2012. Net income was $821 million, or $0.79 per share, compared to $824 million, or $0.86 per share, in third quarter 2012. At quarter end it had $2.22 billion in cash, down from 3.73 billion at the end of third quarter 2012

Ingredion Inc. (INGR)

Tepper bought 297,452 shares of Ingredion, representing 0.31% of his portfolio. The third quarter average share price on the stock was $65. It has increased 7% from the average.

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Ingredion is a supplier of ingredients to the global food, beverage, brewing and pharmaceutical industries and a variety of industrial and pharmaceutical sectors.

Ingredion Inc. has a market cap of $5.31 billion; its shares were traded at around $69.18 with a P/E ratio of 13.60 and P/S ratio of 0.80. The dividend yield of Ingredion Inc. stocks is 2.00%. Ingredion Inc. had an annual average earnings growth of 13.30% over the past 10 years. GuruFocus rated Ingredion Inc. the business predictability rank of 4-star.

In the third quarter, Ingredion reported a 4% year-over-year decline to $1.61 billion. Net income declined to $86 million, or $1.10 per share, compared to $113 million, or $1.145 per share, the previous year. At quarter-end the company had cash of $1.77 billion, compared to $1.8 billion at year-end 2012. Debt was $618 million, compared to $609 million in the same periods.

Community Health Systems Inc. (CYH)

Tepper bought 210,000 shares of Community Health Systems, representing 0.14% of his portfolio. The third quarter average price was $43; shares have since declined 2% from the average.

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Community Health Systems operates 135 general acute care hospitals n 29 states.

Community Health Systems Inc. has a market cap of $3.92 billion; its shares were traded at around $41.21 with a P/E ratio of 21.50 and P/S ratio of 0.30. Community Health Systems Inc. had an annual average earnings growth of 18.70% over the past 10 years. GuruFocus rated Community Health Systems Inc. the business predictability rank of 3.5-star.

In the third quarter, CHS reported revenues of $3.22 billion, a 0.2% increase from the third quarter 2012. Net income was $4.1 million, or $0.04 per share, compared to $44.23 million, or $0.50 per share, in the same periods. At quarter-end CHS had $143.6 million in cash on its balance sheet, down from $387.8 million at year-end 2012.

Tenet Healthcare Corp. (THC)

Tepper bought 210,000 shares of Tenet Healthcare Corp., representing 0.14% of his portfolio. The third quarter share price was $42; the share price is about flat from the average.

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Tenet Healthcare operates 78 hospitals and 176 outpatient centers across 42 states.

Tenet Healthcare Corp. has a market cap of $4.16 billion; its shares were traded at around $41.97 with and P/S ratio of 0.50. Tenet Healthcare Corp. had an annual average earnings growth of 12.80% over the past five years.

In the third quarter, Tenet reported a 7.9% year-over-year increase in revenue to $2.62 billion. Net income increased to $36 million from $32 million in the third quarter 2012. At quarter-end Tenet reported cash of $82 million, down from $364 million at year-end 2012.

J.C. Penney Inc. (JCP)

Tepper bought 737,800 shares of J.C. Penney Co., representing 0.1% of his portfolio. The third quarter average share price was $14; it has declined 37% from the average.

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J.C. Penney is an apparel and home furnishing retailer with 1,100 stores and shopping website at jcp.com. J.C. Penney Co Inc. has a market cap of $2.65 billion; its shares were traded at around $8.69 with and P/S ratio of 0.20.

In the second quarter ended Aug. 3, 2013, J.C. Penney reported $2.66 billion in net sales, down from $3.02 billion in the second quarter of 2012. Its net loss was $586 million, or $2.66 per share, compared to a net loss of $147 million in the same periods. The company’s cash stood at $1.54 billion at quarter-end, down by $714 million from the first quarter end.

For more David Tepper stocks, see his portfolio here. Also check out the Undervalued Stocks, Top Growth Companies and High Yield stocks of David Tepper.


Rating: 4.5/5 (6 votes)

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