Appaloosa Management founder David Tepper (Trades, Portfolio) established three positions during the second quarter: Alibaba Group Holding Ltd. (BABA, Financial), Altaba Inc. (AABA, Financial) and PowerShares QQQ Trust Series 1 (QQQ, Financial).
Alibaba
Tepper invested in 3,693,918 shares of Alibaba for an average price of $123.40 per share. The guru boosted his portfolio 7.72% with this transaction.
As mentioned in a previous article, the Chinese online retailer reported strong year-over-year revenue growth for the 12 months ending March 31. Chief Financial Officer Maggie Wu said the 60% revenue growth for the March quarter was “the highest growth rate [the company] achieved since [Alibaba’s] IPO.” The robust results were driven by high revenue growth in each of the company’s reporting segments: Core Commerce, Cloud Computing, Digital Media and Innovation. As the company also has strong margins and returns, GuruFocus ranked Alibaba’s profitability an 8 and Alibaba’s business predictability four stars out of five.
Several other gurus, including Daniel Loeb (Trades, Portfolio), Ken Heebner (Trades, Portfolio), Julian Robertson (Trades, Portfolio) and Stanley Druckenmiller (Trades, Portfolio) invested in Alibaba as the company offers good growth potential for the rest of the year.
Altaba
Tepper added 5,129,051 shares of Altaba for an average price of $50.17 per share. The guru increased his portfolio 4.14% with this transaction.
After Yahoo sold its core business to Verizon Communications Inc. (VZ), the online media company became Altaba, a closed-end management company with holdings primarily in Yahoo Japan Inc. (YAHOY)(TSE:4689)(FRA:YOJ) and Alibaba.
Altaba has a financial strength rank of 6, implying a good financial position. The company has a Piotroski F-score of 6 and about $5.25 in cash for every $1 in debt.
PowerShares QQQ
Tepper added 1,815,500 shares of PowerShares QQQ for an average price of $137.45 per share. The guru expanded his portfolio 3.71% with this transaction.
According to the Invesco website, the PowerShares QQQ exchange-traded fund seeks to track the Nasdaq 100 index, which includes 100 of the largest nonfinancial companies listed on the Nasdaq based on market cap. QQQ has a price-earnings ratio of 24.66 and a price-book ratio of 4.97 as of Aug. 15.
Disclosure: The author has no positions in the stocks mentioned.
