5 Stocks Top Earners Steven Cohen and David Tepper Have in Common

The hedge fund giants both raked in $1.7 billion in 2020

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Sydnee Gatewood
Mar 12, 2021
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At the end of February, the 20th annual Institutional Investor's Rich List revealed that hedge fund giants

Steven Cohen (Trades, Portfolio), head of Point72 Asset Management, and Appaloosa Management's David Tepper (Trades, Portfolio) were among the biggest earners in 2020. The gurus tied for sixth place last year.

The list, which is composed of the highest-earning managers, found that the top 25 hedge funds made a combined $32 billion in earnings last year despite the negative effects of the Covid-19 pandemic.

Other renowned investors followed by GuruFocus that made the top 10 were

Jim Simons (Trades, Portfolio), the head of Renaissance Technologies, Tiger Global Management founder Chase Coleman (Trades, Portfolio), Citadel's Kenneth Griffin, Coatue Management leader Philippe Laffont (Trades, Portfolio), Viking Global's Andreas Halvorsen (Trades, Portfolio) and Bill Ackman (Trades, Portfolio), the head of Pershing Square Capital Management.

Tying once again, but for fifth place, Cohen and Tepper each raked in $1.7 billion in 2020. As a result of their strong performance, investors may be interested in knowing where the two gurus are investing.

Cohen's Stamford, Connecticut-based firm executes a long-short strategy that involves fundamental, bottom-up research processes, macro investments and insights to generate superior risk-adjusted returns.

In contrast, Tepper, who revealed to CNBC earlier this week that he is getting more bullish on stocks, specializes in distressed debt. He announced in 2019 that he would be returning money to investors and converting his New Jersey-based hedge fund into a family office.

While Cohen and Tepper have slightly different approaches to investing, they have several holdings in common. According to the GuruFocus Aggregated Portfolio, a Premium feature, the two gurus both had positions in T-Mobile US Inc. (

TMUS, Financial), Amazon.com Inc. (AMZN, Financial), Micron Technology Inc. (MU, Financial), Facebook Inc. (FB, Financial) and PG&E Corp. (PCG, Financial), among several other stocks, as of the end of fourth-quarter 2020.

T-Mobile US

During the fourth quarter, Cohen reduced his T-Mobile (

TMUS, Financial) stake by 24.6% and Tepper curbed his position by 5.94%. They have a combined equity portfolio weight of 10.58% in the stock.

The Bellevue, Washington-based telecom company, which operates a wireless network, has a $156.58 billion market cap; its shares were trading around $125.99 on Friday with a price-earnings ratio of 45.16, a price-book ratio of 2.39 and a price-sales ratio of 2.14.

The GF Value Line suggests the stock is significantly overvalued currently based on the company's historical ratios, past performance and future earnings projections.

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Since establishing the position in second-quarter 2020, GuruFocus estimates Cohen has gained 12.45% on the investment. Tepper has gained approximately 28.11% since the fourth quarter of 2017.

Of the gurus invested in T-Mobile, Halvorsen has the largest stake with 0.70% of outstanding shares.

Warren Buffett (Trades, Portfolio), Dodge & Cox, Stanley Druckmiller, PRIMECAP Management (Trades, Portfolio) and Bill Nygren (Trades, Portfolio) also have large positions in the stock.

Amazon

In the fourth quarter, Tepper upped his Amazon (

AMZN, Financial) holding by 39.72%, while Cohen trimmed his position by 70.27%. They have a combined equity portfolio weight of 10.37% in the stock.

The e-commerce company, which is headquartered in Seattle, has a market cap of $1.57 trillion; its shares were trading around $3,113.59 on Friday with a price-earnings ratio of 74.54, a price-book ratio of 16.77 and a price-sales ratio of 4.12.

According to the GF Value Line, the stock is fairly valued currently.

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GuruFocus estimates Cohen has gained 39.72% on his investment since the first quarter of 2017, while Tepper has accrued a return of 48.55% since the first quarter of 2019.

Baillie Gifford (Trades, Portfolio) has the largest stake in Amazon with 0.63% of outstanding shares. Other top guru investors include Ken Fisher (Trades, Portfolio), Frank Sands (Trades, Portfolio), Pioneer Investments (Trades, Portfolio), Spiros Segalas (Trades, Portfolio), Coleman, Buffett, Primecap, Chris Davis (Trades, Portfolio), Steve Mandel (Trades, Portfolio) and Laffont.

Micron Technology

Cohen beefed up his Micron (

MU, Financial) position by 98.85% in the fourth quarter, while Tepper slimmed down his stake by 34.69%. They have a combined portfolio weight of 9.94% in the stock.

The Boise, Idaho-based chipmaker has a $99.91 billion market cap; its shares were trading around $89.31 on Friday with a price-earnings ratio of 33.7, a price-book ratio of 2.5 and a price-sales ratio of 4.58.

Based on the GF Value Line, the stock appears to be significantly overvalued currently.

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GuruFocus data shows Cohen has gained an estimated 30.32% on his investment since the second quarter of 2019. Tepper's investment has returned roughly 15.49% since the fourth quarter of 2016.

With a 4.34% stake, Primecap is the company's largest guru. Other top guru investors include

Li Lu (Trades, Portfolio), Pioneer, Seth Klarman (Trades, Portfolio), the Parnassus Endeavor Fund (Trades, Portfolio), Simons' firm, Halvorsen, Laffont and Mohnish Pabrai (Trades, Portfolio).

Facebook

Tepper upped his Facebook (

FB, Financial) holding by 13.78% in the fourth quarter, while Cohen boosted his stake by 34.93%. The gurus have a combined portfolio weight of 9.72% in the stock.

The social media company headquartered in Menlo Park, California has a market cap of $757.76 billion; its shares were trading around $266.23 on Friday with a price-earnings ratio of 26.35, a price-book ratio of 5.9 and a price-sales ratio of 8.94.

The GF Value Line currently suggests the stock is fairly valued.

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According to GuruFocus, Cohen has gained roughly 13.56% on his investment since the second quarter of 2020. GuruFocus data shows Tepper's investment has climbed 20.16% since the third quarter of 2016.

Of the gurus invested in Facebook, Baillie Gifford has the largest stake with 0.39% of outstanding shares. Sands, Coleman, Segalas, Fisher, Pioneer, Mandel, Dodge & Cox, Davis,

First Eagle Investment (Trades, Portfolio) and many other gurus also own the stock.

PG&E

Cohen established a stake in PG&E (

PCG, Financial) during the fourth quarter, while Tepper trimmed his holding by 47.55%. The stock has a combined weight of 7.97% in their equity portfolios.

The San Francisco-based utility company has a $23 billion market cap; its shares were trading around $11.59 on Friday with a price-book ratio of 1.09 and a price-sales ratio of 0.58.

According to the GF Value Line, the stock is significantly overvalued currently.

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GuruFocus data indicates Cohen has lost an estimated 4.18% on his investment so far. Since fourth-quarter 2017, Tepper has lost roughly 5.23%.

Daniel Loeb (Trades, Portfolio) is the company's largest guru shareholder with 4.28% of outstanding shares. Klarman, David Abrams (Trades, Portfolio), Howard Marks (Trades, Portfolio), First Pacific Advisors (Trades, Portfolio) and Steven Romick (Trades, Portfolio) also have significant stakes in PG&E.

Additional common holdings and portfolio composition

Other stocks Cohen and Tepper both own as of Dec. 31, 2020 were Twitter Inc. (

TWTR, Financial), Visa Inc. (V, Financial), Microsoft Corp. (MSFT, Financial), Mastercard Inc. (MA, Financial), HCA Healthcare Inc. (HCA, Financial), The Walt Disney Co. (DIS, Financial) and PayPal Holdings Inc. (PYPL, Financial).

Cohen's $20.5 billion equity portfolio, which was composed of 879 stocks as of the end of the fourth quarter, was largely invested in the technology, health care and consumer cyclical sectors.

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Slightly over half of Tepper's $6.69 billion equity portfolio, which was composed of 45 stocks for the same period, was invested in the communication services and consumer cyclical sectors.

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Disclosure: No positions.

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I am the editorial director at GuruFocus. I have a BA in journalism and a MA in mass communications from Texas Tech University. I have lived in Texas most of my life, but also have roots in New Mexico and Colorado. Follow me on Twitter! @gurusydneerg