This the second half of the exclusive and extended interview with David Tepper of Appaloosa Management by CNBC this morning.
Tepper made a name for himself by backing up his truck and scooping up the financial stocks at the market low of 2Q09. He made $7.5 billion last year for his fund and returned 132 percent in that year. But the performance is not unusual: Tepper returned an average north of 40% in the past 17 years.
The view expressed by Tepper today is credited for lift the sentiment of the market. Dow is up 180 points at this writing.
His reason is simple: either the economy will get better on its own or the Fed will continue its Quantitative Easing II until the economy gets better.
Top of his equity holdings are in financials, but Tepper said his overall exposure to financials is around 10%. In stocks, he does own a number of high profile financial such as BAC, WFC, and C. He thinks these stocks are as cheap as other stocks.
He sees a P/E expansion for S&P 500 from the current 12 level. It might go 14 and we could still think it is conservative.
Tepper says if the market (S&P500) hits 1,000, he will be 100% equity. He is a bond guy, having made more of his money last year in bonds. At the end of 2Q10, most of his $12.5 billion was in bond or other investment.
Readers of GuruFocus have the benefit of knowing the top purchases he made during the second quarter of 2010 when their came out in the middle of last month:
No. 1: Macy's Inc. (M, Financial), Buy: 3.02% of the portfolio - Total: 4,838,123 Shares
Federated Department Stores, through its subsidiaries, is one of the operators of full-line department stores in the United States. Macy's Inc. has a market cap of $9.4 billion; its shares were traded at around $22.28 with a P/E ratio of 12.6 and P/S ratio of 0.4. The dividend yield of Macy's Inc. stocks is 0.9%.
This is a new position for Tepper for the 2Q10 quarter.
No. 2: CF Industries Holdings Inc. (CF, Financial), Buy: 2.69% of the portfolio - Total: 1,215,840 Shares
CF Industries Holdings, Inc. is the holding company for the operations of CF Industries, Inc. Cf Industries Holdings Inc. has a market cap of $7.01 billion; its shares were traded at around $98.68 with a P/E ratio of 15.4 and P/S ratio of 2.7. The dividend yield of Cf Industries Holdings Inc. stocks is 0.4%. Cf Industries Holdings Inc. had an annual average earning growth of 85.7% over the past 5 years.
No. 3: Merck & Co. Inc. (MRK, Financial), Add: 2.58% of the portfolio - Total: 3,843,000 Shares
Merck & Co., Inc. is a global research-driven pharmaceutical company dedicated to putting patients first. Merck & Co. Inc. has a market cap of $112.68 billion; its shares were traded at around $36.66 with a P/E ratio of 10.9 and P/S ratio of 4.1. The dividend yield of Merck & Co. Inc. stocks is 4.2%.
No. 4: Pfizer Inc (PFE, Financial), Add: 2.43% of the portfolio - Total: 11,344,002 Shares
Pfizer Inc is a research-based, global pharmaceutical company that discovers and develops innovative, value-added products that improve the quality of life of people around the world and help them enjoy longer, healthier, and more productive lives. Pfizer Inc has a market cap of $136.97 billion; its shares were traded at around $17.04 with a P/E ratio of 7.6 and P/S ratio of 2.8. The dividend yield of Pfizer Inc stocks is 4.2%. Pfizer Inc had an annual average earning growth of 1.8% over the past 10 years.
No. 5: Banco Santander Central Hispano S.A. (STD, Financial), Buy: 0.28% of the portfolio - Total: 754,015 Shares
Banco Santander SA is the biggest bank in Spain and the biggest international bank in Latin America as well. Banco Santander Central Hispano S.a. has a market cap of $100.89 billion; its shares were traded at around $12.26 with a P/E ratio of 8.6 and P/S ratio of 1. The dividend yield of Banco Santander Central Hispano S.a. stocks is 6.7%. Banco Santander Central Hispano S.a. had an annual average earning growth of 50.2% over the past 10 years. GuruFocus rated Banco Santander Central Hispano S.a. the business predictability rank of 4.5-star.
It appears at least in 2Q10, Tepper has started to broaden his scope to include banks, retailer and big pharms.
Check out Tepper’s stock portfolio with GuruFocus: http://www.gurufocus.com/holdings.php?GuruName=David+Tepper
GuruFocus provides these kind of real time information and insights of Investment Gurus such as Warren Buffettand David Tepper for Premium Members. If you are not a premium member, click here to sign up or upgrade. 7-Day Free Trial is available.
Also check out:
Tepper made a name for himself by backing up his truck and scooping up the financial stocks at the market low of 2Q09. He made $7.5 billion last year for his fund and returned 132 percent in that year. But the performance is not unusual: Tepper returned an average north of 40% in the past 17 years.
The view expressed by Tepper today is credited for lift the sentiment of the market. Dow is up 180 points at this writing.
His reason is simple: either the economy will get better on its own or the Fed will continue its Quantitative Easing II until the economy gets better.
Top of his equity holdings are in financials, but Tepper said his overall exposure to financials is around 10%. In stocks, he does own a number of high profile financial such as BAC, WFC, and C. He thinks these stocks are as cheap as other stocks.
He sees a P/E expansion for S&P 500 from the current 12 level. It might go 14 and we could still think it is conservative.
Tepper says if the market (S&P500) hits 1,000, he will be 100% equity. He is a bond guy, having made more of his money last year in bonds. At the end of 2Q10, most of his $12.5 billion was in bond or other investment.
Readers of GuruFocus have the benefit of knowing the top purchases he made during the second quarter of 2010 when their came out in the middle of last month:
No. 1: Macy's Inc. (M, Financial), Buy: 3.02% of the portfolio - Total: 4,838,123 Shares
Federated Department Stores, through its subsidiaries, is one of the operators of full-line department stores in the United States. Macy's Inc. has a market cap of $9.4 billion; its shares were traded at around $22.28 with a P/E ratio of 12.6 and P/S ratio of 0.4. The dividend yield of Macy's Inc. stocks is 0.9%.
This is a new position for Tepper for the 2Q10 quarter.
No. 2: CF Industries Holdings Inc. (CF, Financial), Buy: 2.69% of the portfolio - Total: 1,215,840 Shares
CF Industries Holdings, Inc. is the holding company for the operations of CF Industries, Inc. Cf Industries Holdings Inc. has a market cap of $7.01 billion; its shares were traded at around $98.68 with a P/E ratio of 15.4 and P/S ratio of 2.7. The dividend yield of Cf Industries Holdings Inc. stocks is 0.4%. Cf Industries Holdings Inc. had an annual average earning growth of 85.7% over the past 5 years.
No. 3: Merck & Co. Inc. (MRK, Financial), Add: 2.58% of the portfolio - Total: 3,843,000 Shares
Merck & Co., Inc. is a global research-driven pharmaceutical company dedicated to putting patients first. Merck & Co. Inc. has a market cap of $112.68 billion; its shares were traded at around $36.66 with a P/E ratio of 10.9 and P/S ratio of 4.1. The dividend yield of Merck & Co. Inc. stocks is 4.2%.
No. 4: Pfizer Inc (PFE, Financial), Add: 2.43% of the portfolio - Total: 11,344,002 Shares
Pfizer Inc is a research-based, global pharmaceutical company that discovers and develops innovative, value-added products that improve the quality of life of people around the world and help them enjoy longer, healthier, and more productive lives. Pfizer Inc has a market cap of $136.97 billion; its shares were traded at around $17.04 with a P/E ratio of 7.6 and P/S ratio of 2.8. The dividend yield of Pfizer Inc stocks is 4.2%. Pfizer Inc had an annual average earning growth of 1.8% over the past 10 years.
No. 5: Banco Santander Central Hispano S.A. (STD, Financial), Buy: 0.28% of the portfolio - Total: 754,015 Shares
Banco Santander SA is the biggest bank in Spain and the biggest international bank in Latin America as well. Banco Santander Central Hispano S.a. has a market cap of $100.89 billion; its shares were traded at around $12.26 with a P/E ratio of 8.6 and P/S ratio of 1. The dividend yield of Banco Santander Central Hispano S.a. stocks is 6.7%. Banco Santander Central Hispano S.a. had an annual average earning growth of 50.2% over the past 10 years. GuruFocus rated Banco Santander Central Hispano S.a. the business predictability rank of 4.5-star.
It appears at least in 2Q10, Tepper has started to broaden his scope to include banks, retailer and big pharms.
Check out Tepper’s stock portfolio with GuruFocus: http://www.gurufocus.com/holdings.php?GuruName=David+Tepper
GuruFocus provides these kind of real time information and insights of Investment Gurus such as Warren Buffettand David Tepper for Premium Members. If you are not a premium member, click here to sign up or upgrade. 7-Day Free Trial is available.
Also check out:
