David Tepper (Trades, Portfolio), manager of Appaloosa LP, disclosed in regulatory portfolio filings that his firm’s top five trades during the fourth quarter of 2021 included a new position in General Motors Co. (GM, Financial), a boost to its stake in Macy’s Inc. (M, Financial), the closure of its stakes in HCA Healthcare Inc. (HCA, Financial) and Alibaba Group Holding Ltd. (BABA, Financial) and a reduction to its holding in T-Mobile US Inc. (TMUS, Financial).
Tepper started investing as a young boy watching his father trade stocks. A distressed-debt specialist, the Pittsburgh-based guru has earned a reputation for producing some of the highest returns among Wall Street investors.
The guru announced in 2019 that he plans to convert Appaloosa into a family office. As of December 2021, the firm’s $3.89 billion equity portfolio contains 44 stocks, with five new positions and a quarterly turnover ratio of 9%.
General Motors
Appaloosa purchased 2.25 million shares of General Motors (GM, Financial), dedicating 3.39% of its equity portfolio to the position.
Shares of General Motors averaged $58.54 during the fourth quarter; the stock is significantly overvalued based on Thursday’s price-to-GF-Value ratio of 1.44.
GuruFocus ranks the Detroit-based automobile company’s profitability 6 out of 10 on the heels of a high Piotroski F-score of 7 and profit margins outperforming more than 64% of global competitors despite three-year revenue declining and underperforming approximately 66% of global vehicles and parts companies.
Other gurus with holdings in GM include Warren Buffett (Trades, Portfolio)’s Berkshire Hathaway Inc. (BRK.A, Financial)(BRK.B, Financial), Diamond Hill Capital (Trades, Portfolio) and Bill Nygren (Trades, Portfolio)’s Oakmark Fund.
Macy’s
The firm added 3,096,160 shares of Macy’s (M, Financial), boosting the position by 44.23% and its equity portfolio by 2.09%.
Shares of Macy’s averaged $27.38 during the fourth quarter; the stock is significantly overvalued based on Thursday’s price-to-GF-Value ratio of 1.40.
GuruFocus ranks the New York-based omnichannel retail company’s profitability 6 out of 10 on the back of profit margins outperforming more than 60% of global competitors despite three-year revenue decline rates underperforming over 73% of global retail companies.
HCA Healthcare
The firm sold all 387,000 shares of HCA Healthcare (HCA, Financial), trimming 2.24% of its equity portfolio.
Shares of HCA Healthcare averaged $244.69 during the fourth quarter; the stock is significantly overvalued based on Thursday’s price-to-GF-Value ratio of 1.36.
GuruFocus ranks the Nashville-based health care provider’s profitability 9 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 and returns outperforming more than 80% of global competitors.
Alibaba
Appaloosa sold all 525,000 shares of Alibaba (BABA, Financial), trimming 1.85% of its equity portfolio.
Shares of Alibaba averaged $145.10 during the fourth quarter; the stock is significantly undervalued based on Thursday’s price-to-GF-Value ratio of 0.33.
GuruFocus ranks the Chinese e-commerce giant’s profitability 8 out of 10 on the heels of a three-star business predictability rank and profit margins outperforming more than 80% of global competitors.
Gurus with holdings in Alibaba include Charlie Munger (Trades, Portfolio)’s Daily Journal Corp. (DJCO, Financial), PRIMECAP Management (Trades, Portfolio), Baillie Gifford (Trades, Portfolio) and Dodge & Cox.
T-Mobile
The firm sold 1,269,008 shares of T-Mobile US (TMUS, Financial), slicing 49.86% of the position and 3.86% of its equity portfolio.
Shares of T-Mobile averaged $117.52 during the fourth quarter; the stock is fairly valued based on Thursday’s price-to-GF-Value ratio of 1.04.
GuruFocus ranks the Bellevue, Washington-based telecom company’s financial strength 3 out of 10 on several warning signs, which include a low Altman Z-score of 1.16 and interest coverage and debt ratios underperforming more than 76% of global competitors.
