David Tepper

David Tepper

Last Update: 2014-05-15

Number of Stocks: 58
Number of New Stocks: 3

Total Value: $9,058 Mil
Q/Q Turnover: 18%

Countries: USA
Details: Top Buys | Top Sales | Top Holdings  Embed:

David Tepper' s Profile & Performance

Profile

David Alan Tepper is the founder of Appaloosa Management, which is a $3 billion hedge fund investment firm based in Chatham, N.J., just west of New York City. David Tepper initially became interested in the stock market as a young boy watching his father trade stocks in his hometown of Pittsburgh. Today, as president and founder of Appaloosa Management, Tepper has earned an international reputation for producing some of the highest returns amongst fund managers on Wall Street. He earned a master of science in industrial administration from Carnegie Mellon in 1982. He donated a record $55 million to the Graduate School of Industrial Administration. The gift is the largest donation to Carnegie Mellon University in its 104-year history.

Investing Philosophy

He is a distressed-debt specialist, was once considered to be the hottest investor on wall street.

Total Holding History

Performance of Appaloosa Investment LP I

YearReturn (%)S&P500 (%)Excess Gain (%)
20102215.066.9
2009132.7226.46106.3
2008-26.72-3710.3
3-Year Cumulative108.1 (27.7%/year)-8.3 (-2.9%/year)116.4 (30.6%/year)
20078.885.613.3
200625.8615.7910.1
5-Year Cumulative185.1 (23.3%/year)12.1 (2.3%/year)173 (21%/year)
200520.554.9115.6
200433.811221.8
2003148.8228.7120.1
2002-24.8-22.1-2.7
200166.75-11.978.6
10-Year Cumulative1335 (30.5%/year)16.3 (1.5%/year)1318.7 (29%/year)
20000.04-9.19.1
199960.892139.9
1998-29.1928.6-57.8
199729.5433.4-3.9
199678.462355.5
15-Year Cumulative3680.8 (27.4%/year)170 (6.8%/year)3510.8 (20.6%/year)
199542.0637.64.5
199419.031.317.7
199357.6210.147.5

Top Ranked Articles

How David Tepper Became a Billionaire
Several major deals highlighted David Tepper’s career before he established his fame by making the all-time record payday of $4 billion investing in near-bankrupt banks in 2009. The distressed debt specialist actually made his all-time record return of 148% back in 2003 and has had a 30% average annualized return since he founded his firm, Appaloosa Management, in 1993. Read more...
How to Get an 8.4% Portfolio with the Help of Buffett, Tepper, Pabrai, Marks and Einhorn
At times like this, dividends are king. Stocks paying a high yield will hold up better as the market goes south. In this article I picked the highest yielding stocks from the portfolio of Warren Buffett, David Tepper, Mohnish Pabrai, Howard Marks and David Einhorn. By this way I created a portfolio of 5 stocks selected from superb Value Investors. Read more...
Investment Guru of the Year 2010: David Tepper
Hedge fund manager David Tepper of Appaloosa Management has been voted as the Investment Guru of the Year 2010 by GuruFocus users. He got more than 31% of the total votes casted up to today. Read more...
David Tepper’s Perfect Timing in Betting on Bank of America Corp., Fifth Third Bancorp, SunTrust Banks Inc Perfect Timing of David Tepper
(GuruFocus, Updated on July 6, 2009) David Tepper Hoarded Cash in 2008 David Tepper is a successful hedge fund manager and the founder of Appaloosa Management. With an estimated current net worth of around $1.2 billion, he is ranked by Forbes as the 601th richest person in the world. Read more...
David Tepper Speaks Again
David Tepper of Appaloosa Management shares his outlook for the year ahead today. Read more...
» More David Tepper Articles

How David Tepper Became a Billionaire

Several major deals highlighted David Tepper’s career before he established his fame by making the all-time record payday of $4 billion investing in near-bankrupt banks in 2009. The distressed debt specialist actually made his all-time record return of 148% back in 2003 and has had a 30% average annualized return since he founded his firm, Appaloosa Management, in 1993.

Tepper primarily specializes in distressed debt investing. He tends to buy distressed debt of companies on the verge of implosion and sells it when it matures. His firm now manages about $4 billion.

Power Companies (2001-2004)

Tepper’s assurance that the government would not let banks fail had at least one precedent. He made a small fortune in 2004 in a similar situation during the California electricity crisis. In 2000 and 2001, large swaths of the state of California faced blackouts and prominent electricity companies went bankrupt. The disaster began when energy companies created an artificial shortage by shutting down power plants for maintenance during times of peak usage. They then increased the price, allowing traders to sell power at significantly higher rates.

The government had also placed a price cap on retail electricity charges, which forced the industry to sell electricity at a loss. Drought and population growth in California exacerbated the situation. Consequently, Pacific Gas and Electric Company (PCG) went bankrupt, and Southern California Edison nearly went bankrupt as well.

The state of California stepped in to save the dying companies, which had together accumulated $20 billion of debt by early 2001 and had their credit ratings reduced to junk status. On January 2001, the state authorized the California Department of Water and Resources to buy power for Southern California Edison, and later it did the same for SDG&E. Companies resumed purchasing their own power in 2003.

David Tepper bought millions of shares of the two most affected power companies, Pacific Gas and Electric and Edison International (EIX), from 2001-2003, mostly when their stock traded in the teens or lower. He sold out of both companies in the beginning of 2004, when their stock had risen to the mid-$20s.

Enron, Worldcom, Conseco Bankruptcies (2002-2004)

In 2002 Tepper purchased at least $1 billion of the $14 billion of distressed debt and securities of one company that went bankrupt in the fallout of the energy crisis – Enron. Enron was accused of gaming the energy market and collapsed due to unethical bookkeeping and other causes.

Another company’s epic bankruptcy that year that paid off for Tepper. Worldcom concealed losses and misled the public about earnings, causing bond investors to lose about $7.6 billion when it defaulted on its debt, which Tepper purchased. “I’m buying a little bit today. It’s a big company with a lot of revenue so we probably will end up making money,” Tepper told the Seattle Times.

Conseco Inc., a U.S. insurance company that filed Chapter 11 bankruptcy in 2003, canceled its stock and gave ownership of the company in large part to bondholders. Tepper bought a large amount of cheap Conseco bonds when it was on the brink of bankruptcy. Conseco emerged from bankruptcy in 2003.

In 2003, Tepper returned 148% and in 2004, he was the second highest paid hedge fund manager, making $510 million, according to Institutional Investor.

Banks (2009)

Tepper’s seminal trades were made in 2009. Similar to John Paulson, he bought into financials confident that the government would not let the largest banks fail. While banks were teetering on the brink of bankruptcy and the majority of investors were believing the government would nationalize them, Tepper amassed bank-related securities, such as common and preferred shares and junior-subordinated debt.

In the first quarter of 2009, he bought 47.55 million shares of Bank of American at an average price of $6.73 per share. He then decreased his stake steadily as the stock rallied, reaching an average price of $15.79 in the fourth quarter of 2009.

He bought Bank of America preferred shares at 12 cents on the dollar and Citigroup bonds at 19 cents, and other bank debt of Washington Mutual and common and preferred shares of Wachovia, NBC reported. By the end of 2009, the companies’ stocks had recovered and he made billions.

In 2009 he made the highest payday in history of $4 billion, and achieved his second highest return of 132.7%.

Housing (2011)

With few large companies or sectors going under, Tepper has turned to one of the most distressed industries available – housing. He bought KB Homes (KBH), D.R. Horton Inc. (DHI), Pulte Group Inc. (PHM), Beazer Homes USA Inc. (BZH), Ryland Group Inc. (RYL), and Masco Corp. (MAS) in the first quarter of 2011.

Though none of the companies have balance sheets that forebode bankruptcy and none have announced an intention to, their stocks are cheap. The once-thriving companies now sell in the teens or lower.

Tepper is profiting less from disaster in the first quarter. His top five holdings are Citigroup (C), Prizer Inc. (PFE), Hewlett Packard Co. (HPQ), Bank of America Corp. (BAC), Goodyear Tire & Rubber (GT).

Commentaries and Stories

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Add Notes, Comments or Ask Questions

User Comments

Mocheng
ReplyMocheng - 2 days ago
Jcsepulveda, Not from this site, but you might be able to using SEC Edgar search.
Old_water_dude@yahoo
ReplyOld_water_dude@yahoo - 1 month ago
Tepper has a record of plundering health insurance retirement accounts for Retirees at US Pipe. Selling US Pipe to the Chicago Wynchurch gang , and canceling the health insurance of retirees is not success, it is the tip of the iceberg of evil. The hedge funds are the problem, the most massive assault on human freedom is occurring under the name of hedge funds, absolute epic in history, as the loss of human freedom and dignity by the hedge fund gangs sweeps over the land as a dark cloud of ignorance and fear.
Jcsepulveda
ReplyJcsepulveda - 2 months ago
Is there any way to know how much cash position they are holding?
A.madi27@google
ReplyA.madi27@google - 2 months ago
Please make sure you update the "Share # Change from Last Period". the numbers shown are still the ones from Q4 2013. Thanks.

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