David Tepper (Trades, Portfolio), founder of Appaloosa Management, disclosed this week that his firm’s top five trades in the second quarter included reductions to his holdings in T-Mobile US Inc. (TMUS, Financial), Amazon.com Inc. (AMZN, Financial), Facebook Inc. (FB, Financial) and Alphabet Inc. (GOOG, Financial). According to top 10 holdings statistics, a Premium feature of GuruFocus, the above four companies are all among Tepper’s top five holdings.
With the proceeds, the firm established a holding in Uber Technologies Inc. (UBER, Financial).
A distressed-debt specialist, Tepper became interested in the stock market watching his father trade stocks in his hometown of Pittsburgh. The hedge fund guru has earned international reputation for producing one of the highest returns among Wall Street fund managers.
Tepper announced in 2019 that he plans to convert the hedge fund into a family office. As of June 30, Appaloosa’s $4.83 billion equity portfolio contains 54 stocks, with four new positions and quarterly turnover of 5.67%. The top four sectors in terms of weight are communication services, consumer cyclical, technology and energy, representing 28.17%, 20.53%, 18.04% and 11.03% of the equity portfolio.
T-Mobile US
Tepper sold 1.67 million shares of T-Mobile US (TMUS, Financial), trimming 39.86% of the position and 3.01% of its equity portfolio. It is the his fifth-largest holding with a weight of 7.55%.
Shares averaged $137.59 during the second quarter; the stock is significantly overvalued based on Tuesday’s price-to-GF Value ratio of 1.39.
GuruFocus ranks the Bellevue, Washington-based telecommunications company’s profitability 6 out of 10 on the back of three-year revenue and earnings growth rates that outperform more than 65% of global competitors despite profit margins and returns underperforming more than half of global telecom companies.
Gurus with large holdings in T-Mobile US include Dodge & Cox, Andreas Halvorsen (Trades, Portfolio) and Warren Buffett (Trades, Portfolio)’s Berkshire Hathaway Inc. (BRK.A, Financial)(BRK.B, Financial).
Amazon.com
Tepper sold 61,000 shares of Amazon.com (AMZN, Financial), curbing 32.80% of the position and 2.71% of the equity portfolio. Amazon represents Tepper’s second-largest holding with a 8.9% equity portfolio weight.
Shares averaged $3,316.50 during the second quarter; the stock is fairly valued based on Tuesday’s price-to-GF Value ratio of 0.91.
GuruFocus ranks the Seattle-based e-commerce giant’s profitability 8 out of 10 on several positive investing signs, which include a five-star business predictability rank, a high Piotroski F-score of 8 and an operating margin that is near a 10-year high and outperforms more than 64.19% of global competitors.
Gurus with large holdings in Amazon.com include Baillie Gifford (Trades, Portfolio), Ken Fisher (Trades, Portfolio) and Pioneer Investments.
Tepper sold 615,000 shares of Facebook (FB, Financial), chipping away 33.79% of the stake and 2.60% of the equity portfolio. Facebook occupies 8.67% of the portfolio, making it the third-largest holding.
Shares averaged $320.19 during the second quarter; the stock is fairly valued based on Tuesday’s price-to-GF Value ratio of 1.03.
GuruFocus ranks the Menlo Park, California-based social media giant’s profitability 10 out of 10 on several positive investing signs, which include a five-star business predictability rank, a high Piotroski F-score of 7 and profit margins that outperform more than 95% of global competitors.
Alphabet
The firm sold 85,000 Class C shares of Alphabet (GOOG, Financial), slicing 36.8% of the holding and 2.52% of the equity portfolio. The holding occupies 7.57% of the equity portfolio, fourth on the top holding list.
Shares averaged $2,375 during the second quarter; the stock is significantly overvalued based on Tuesday’s price-to-GF Value ratio of 1.35.
GuruFocus ranks the Mountain View, California-based online search giant’s profitability 9 out of 10 on several positive investing signs, which include a five-star business predictability rank and profit margins and returns that outperform more than 86% of global competitors.
Uber
Appaloosa purchased 2.035 million shares of Uber (UBER, Financial), giving the position 2.11% weight in the equity portfolio. Shares averaged $52.32 during the second quarter.
GuruFocus ranks the San Francisco-based rideshare company’s financial strength 4 out of 10 on several warning signs, which include a low Piotroski F-score of 2 and debt ratios that are underperforming more than 70% of global competitors.
