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Highest Paid Guru David Tepper Reports Appaloosa Management’s Top Five Fourth Quarter Stocks

February 17, 2014 | About:
Monica Wolfe

Monica Wolfe

119 followers

Appaloosa founder and renowned hedge fund manager David Tepper is widely regarded for his excellent returns as well as his near perfect timing on his purchases. The guru made his much of his wealth by foreseeing and accurately playing the housing crisis and the financial recovery that was to follow.

Over the fourth quarter, David Tepper made new buys in to 19 stocks across various sectors of the market. The hedge fund’s portfolio holds 70 stocks and is valued at nearly $7.98 billion, which is notably up from the third quarter’s portfolio value of $6.3 billion.

The following companies are Tepper’s five largest individual stock holdings as of the fourth quarter. Tepper also holds notable stakes in the SPDR S&P 500 ETF (SPY) as well as in PowerShares QQQ Trust (QQQ).

Citigroup (C)

David Tepper’s largest stock position over the past quarter was in Citigroup where he held on to 9,675,139 shares of the company’s stock. His holdings in Citigroup made up for 6.3% of his total portfolio as well as 0.32% of the company’s shares outstanding.

Over the past quarter Tepper reduced his holdings -0.6% by selling 58,500 shares of the company’s stock. He sold these shares in the quarterly price range of $47.67 to $53.29, with an estimated average quarterly price of $50.61 per share. Since then the price per share has decreased a slight -2.2%.

Tepper’s historical holding history:

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Citigroup is a global financial services holding company, whose businesses provide consumers, corporations, governments and institutions with a range of financial services such as consumer banking, credit cards, corporate and investment banking, securities brokerage and wealth management.

Citigroup’s historical revenue and net income:

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The analysis on Citigroup reports that the company’s revenue has been in decline over the past five years. It also notes that the company’s P/S ratio is nearing a 5-year high.

The Peter Lynch Chart suggests that the company is currently undervalued:

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Citigroup has a market cap of $150.19 billion. Its shares are currently being traded at around $49.52 with a P/E ratio of 12.50, a P/B ratio of 0.80 and a P/S ratio of 1.93.

Goodyear Tire & Rubber (GT)

The guru’s second largest position goes to Goodyear Tire & Rubber where he holds on to 12,154,921 shares. This position makes up for 3.6% of his total portfolio and 4.94% of the company’s shares outstanding.

During the fourth quarter Tepper reduced his holdings -35.49% by selling a total of 6,688,233shares of the company’s stock. He sold these shares in the price range of $20.57 to $23.85, with an estimated average quarterly price of $22.12 per share. Since his sell the price per share has gone up about 20.7%.

Tepper’s historical holding history:

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Goodyear Tire is a manufacturer of tires and rubber products. It also manufactures and markets several lines of power transmission belts, hoses and other rubber products for the transportation industry and various industrial and chemical markets, and rubber-related chemicals for various applications.

Goodyear Tire & Rubber’s historical revenue and net income:

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The analysis on Goodyear reports that the company has issued $1.5 billion of debt over the past three years, its revenue has been in decline over the past year and its price is trading at a near 1-year high.

The Peter Lynch Chart suggests that the company is currently undervalued:

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Goodyear Tire & Rubber has a market cap of $6.64 billion. Its shares are currently trading at around $26.69 with a P/E ratio of 12.10, a P/S ratio of 0.37 and a P/B ratio of 11.60. The company had an annual average earnings growth of 28.80% over the past ten years.

Google (GOOG)

Tepper’s third largest position is in the company Google where he maintains 236,709 shares of the company’s stock. This position makes up for 3.3% of his holdings as well as 0.07% of the company’s shares outstanding.

The guru upped his stake 63.35% by purchasing 91,800 shares of the company’s stock. He bought these shares near the estimated average quarterly price of $1015.29 per share. Since then the price per share has increased approximately 18.5%.

Tepper’s historical holding history:

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Google is a global technology company engaged in improving the ways people connect with information. The company's business is mainly focused around the following key areas: search, advertising, operating systems and platforms, enterprise and hardware products.

Google’s historical revenue and net income:

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The analysis on Google reports that the company’s price is near a 10-year high, the company has issued $5 billion of debt over the past three years, its interest coverage is comfortable and it’s shown signs of predictable revenue and earnings growth.

The Peter Lynch Chart suggests that Google is currently overvalued:

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Google has a market cap of $404.2 billion. Its shares are currently trading at around $1202.80 with a P/E ratio of 35.30, a P/S ratio of 7.70 and a P/B ratio of 4.63. The company had an annual average earnings growth of 31.50% over the past 10 years.

GuruFocus rated Google the business predictability rank of 2.5-star.

HCA Holdings (HCA)

Tepper’s fifth largest position goes to HCA Holdings where he owns 5,101,382 shares. His holdings represent 3.1% of his total assets managed as well as 1.14% of the company’s shares outstanding.

During the four quarter Tepper upped his holdings 11.55% by purchasing a total of 528,300 shares of the company’s stock. He bought these shares in the quarterly price range of $43.67 to $48.54, with an estimated average quarterly price of $46.22. Since his increase the price per share is up about 7.7%.

Tepper’s holding history as of the fourth quarter:

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HCA Holdings owns and operates hospitals and related health care entities. The company's general, acute care hospitals provide a range of services to accommodate such medical specialties as internal medicine, general surgery, cardiology, oncology, neurosurgery, orthopedics, and obstetrics, as well as diagnostic and emergency services.

HCA Holdings’ historical revenue and net income:

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The analysis on HCA Holdings reports that the company has issued $1.6 billion of debt over the past three years, its operating margin is expanding and its price is sitting near its 3-year high.

The Peter Lynch Chart suggests that the company is currently undervalued:

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HCA Holdings has a market cap of $22.28 billion. Its shares are currently trading at around $49.76 with a P/E ratio of 15.90 and a P/S ratio of 0.68. The company had an annual average earnings growth of 6.60% over the past ten years.

United Continental Holdings (UAL)

Tepper’s third largest position goes to United Continental where he maintains 6,047,365 shares of the company’s stock. His holdings represent 2.9% of his total portfolio as well as 1.70% of the company’s shares outstanding.

During the fourth quarter Tepper reduced his stake in United Continental Holdings. The guru cut his position -29.05% by selling 2,476,456 shares. He bought these shares in the fourth quarter price range of $29.65 to $39.83, with an estimated average quarterly price of $35.03 per share. Since then the price per share has grown an additional 27%.

Tepper’s historical holding history:

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UAL is a holding company and its principal wholly owned subsidiaries are United and Continental. United's and Continental's operations consist primarily of the transportation of persons, property and mail throughout the United States and abroad.

United Continental’s historical revenue and net income:

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The analysis on United Continental reports that the company’s price is at a 5-year high, its revenue has been in decline over the past five years and its P/S ratio is currently sitting at a 10-year high.

United Continental Holdings has a market cap of $16.1 billion. Its shares are currently trading at around $44.50 with a P/S ratio of 0.43 and a P/B ratio of 7.90.

Check out the rest of David Tepper’s fourth quarter portfolio here.

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