David Tepper (Trades, Portfolio), head of the $23.52 billion hedge fund Appaloosa Management whose offhand comments have moved markets, diced up his portfolio in the third quarter, making many significant additions and cuts, the update today showed.
As is common for the prescient investor, Tepper’s fund has soared this year as others have suffered, returning 12% from January through August, according to CNBC. He also said he was not bullish on the stock market and recommended not being fully invested.
“If you’re an average guy, over time you probably will do well in the stock market. We’re not talking about crashes here or massive misvaluations, we’re talking about a market that should correct. The question is, what is that level?” he said on CNBC in September.
Tepper’s portfolio totaled 33 positions including five new buys in the third quarter, with a value of $2.9 billion and estimated 14% quarter-over-quarter turnover.
Most notably Tepper sold stakes in Alibaba Group Holdings Ltd. (BABA, Financial), Bank of America Corp. (BAC, Financial), and homebuilders Lennar Corp. (LEN, Financial) and DR Horton Inc. (DHI, Financial).
His five largest new buys were: Ingersoll Rand PLC (IR, Financial), Allstate Corp. (ALL, Financial), WMIH Corp. (WMIH, Financial), Eagle Materials (EXP, Financial) and Southwest Airlines Co. (LUV, Financial).
Ingersoll Rand PLC (IR, Financial)
Tepper bought 689,566 shares of Ingersoll Rand, a 1.22% portfolio weight. Its share price average was $60 in the third quarter.
Ingersoll Rand PLC is a public limited company incorporated in Ireland in 2009. Ingersoll Rand PLC has a market cap of $14.84 billion; its shares were traded at around $56.86 with a P/E ratio of 22.36 and P/S ratio of 1.17. The dividend yield of Ingersoll Rand PLC stocks is 1.95%. Ingersoll Rand PLC had an annual average earnings growth of 7.2% over the past five years.
Allstate Corp. (ALL, Financial)
He purchased 625,084 shares of Allstate Corp., a 1.27% portfolio holding whose share price averaged $63 in the quarter.
Allstate Corp. was incorporated under the laws of the State of Delaware on Nov. 5, 1992, to serve as the holding company for Allstate Insurance Company. Allstate Corp. has a market cap of $24.17 billion; its shares were traded at around $62.41 with a P/E ratio of 10.88 and P/S ratio of 0.73. The dividend yield of Allstate Corp. stocks is 1.88%. Allstate Corp had an annual average earnings growth of 35.3% over the past five years.
Tepper bought 16,902,465 shares of WMIH Corp., a 1.52% portfolio weight. Its share price averaged $2 for the quarter.
WMIH Corp., formerly WMI Holdings Corp., consists of WM Mortgage Reinsurance Company Inc. WMIH Corp. has a market cap of $472.13 million; its shares were traded at around $2.29.
Eagle Materials (EXP, Financial)
Tepper added 774,637 shares of Eagle Materials, a 1.85% portfolio weight whose shares averaged $78 in the quarter.
Eagle Materials Inc. was incorporated in 1936 in Delaware. Eagle Materials Inc. has a market cap of $3.39 billion; its shares were traded at around $67.81 with a P/E ratio of 20.59 and P/S ratio of 3.04. The dividend yield of Eagle Materials Inc. stocks is 0.58%. Eagle Materials Inc. had an annual average earnings growth of 28.4% over the past five years.
Southwest Airlines Co. (LUV, Financial)
He purchased 1,636,300 shares of Southwest Airlines Co., a 2.17% portfolio weight whose share price averaged $40.
Southwest Airlines Co. was incorporated in Texas on March 15, 1967. Southwest Airlines Co. has a market cap of $29.84 billion; its shares were traded at around $45.89 with a P/E ratio of 16.9 and P/S ratio of 1.59. The dividend yield of Southwest Airlines Co. stocks is 0.59%. Southwest Airlines Co. had an annual average earnings growth of 8.3% over the past 10 years.
See the rest of Tepper’s long portfolio here. Not a Premium Member of GuruFocus? Try it free for 7 days.
