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David Tepper Exits T-Mobile, General Motors in the 1st Quarter

Distressed-debt guru reports quarterly portfolio

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May 17, 2022
Summary
  • Firm’s top sells include the closure of positions in T-Mobile, General Motors and D.R. Horton.
  • He also reduced Occidental Petroleum position by more than half.
  • Firm placed new, small bets on two Las Vegas-based casino resort companies.
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David Tepper (Trades, Portfolio), manager of Appaloosa LP, disclosed in a regulatory filing that his firm exited during the first quarter its positions in T-Mobile US Inc. (TMUS, Financial), General Motors Co. (GM, Financial) and D.R. Horton Inc. (DHI, Financial). The firm also trimmed more than half of its holding in Occidental Petroleum Corp. (OXY, Financial) and established new positions in Wynn Resorts Ltd. (WYNN, Financial) and Las Vegas Sands Corp. (LVS, Financial).

A distressed-debt specialist, Tepper initially became interested in stock markets by watching his father trade stocks. The guru has earned a reputation for producing high returns among Wall Street investors.

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Tepper converted his Appaloosa hedge fund into a family office in 2019. As of March, the firm’s $2.50 billion 13F equity portfolio contains 34 stocks with a quarterly turnover ratio of 7%. The top four sectors in terms of weight are consumer cyclical, energy, communication services and technology, representing 25.11%, 21.82%, 21.22% and 13.95% of the equity portfolio.

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Investors should be aware that the 13F filings do not give a complete picture of a firm’s holdings as the reports only include its positions in U.S. stocks and American depository receipts, but the reports can still provide valuable information. Further, the reports only reflect trades and holdings as of the most-recent portfolio filing date, which may or may not be held by the reporting firm today or even when this article was published.

T-Mobile

Appaloosa sold all 1,275,992 shares of T-Mobile US (

TMUS, Financial), trimming 3.81% of its equity portfolio.

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Shares of T-Mobile averaged $119.02 during the first quarter; the stock is fairly valued based on Tuesday’s price-to-GF Value ratio of 1.02.

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The Bellevue, Washington-based communication services company has a GF Score of 84 out of 100 based on a momentum rank of 9 out of 10, a growth rank of 8 out of 10, a profitability rank of 7 out of 10, a GF Value rank of 6 out of 10 and a financial strength rank of 4 out of 10.

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Gurus with holdings in T-Mobile US include

Warren Buffett (Trades, Portfolio)’s Berkshire Hathaway Inc. (BRK.A)(BRK.B), Dodge & Cox and Andreas Halvorsen (Trades, Portfolio)’s Viking Global LP.

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General Motors

The firm sold all 2.25 million shares of General Motors (

GM, Financial), curbing 3.39% of its equity portfolio.

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Shares of General Motors averaged $50.08 during the first quarter; the stock is fairly valued based on Tuesday’s price-to-GF Value ratio of 0.92.

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The Detroit-based automaker has a GF Score of 74 out of 100 based on a profitability rank of 7 out of 10, a GF Value rank of 6 out of 10, a financial strength rank of 5 out of 10 and a rank of 4 out of 10 for growth and momentum.

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Gurus with holdings in General Motors include Buffett’s Berkshire,

Diamond Hill Capital (Trades, Portfolio) and Bill Nygren (Trades, Portfolio)’s Oakmark Fund.

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D.R. Horton

Appaloosa sold all 1.1 million shares of D.R. Horton (

DHI, Financial), paring 3.07% of its equity portfolio.

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Shares of D.R. Horton averaged $86.85 during the first quarter; the stock is significantly undervalued based on Tuesday’s price-to-GF Value ratio of 0.64. However, the GF Value Line flagged the stock as a possible value trap due to the stock’s poor momentum rank of 5 out of 10.

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Despite low momentum, the Arlington, Texas-based homebuilder has a GF Score of 95 out of 100 based on a rank of 10 out of 10 for profitability and growth, a GF Value rank of 8 out of 10 and a financial strength rank of 6 out of 10.

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Occidental Petroleum

Appaloosa sold 3.76 million shares of Occidental Petroleum (

OXY, Financial), slicing 56.97% of the position and 2.80% of its equity portfolio.

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Although shares of Occidental Petroleum averaged $44.01 during the first quarter, the stock traded around $67.94 on Tuesday. The stock is significantly overvalued based on Tuesday’s price-to-GF Value ratio of 1.50.

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The Houston-based energy exploration and production company has a GF Score of 67 out of 100 based on a profitability rank of 7 out of 10, a momentum rank of 6 out of 10, a growth rank of 5 out of 10, a financial strength rank of 4 out of 10 and a GF Value rank of 1 out of 10.

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Wynn

Appaloosa purchased 225,000 shares of Wynn Resorts (

WYNN, Financial), giving the position 0.72% equity portfolio weight. Shares averaged $78.79 during the first quarter; the stock is modestly undervalued based on Tuesday’s price-to-GF Value ratio of 0.84.

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The Las Vegas-based casino resort company has a GF Score of 67 out of 100: Even though the company’s financial strength and growth rank below 2 out of 10, Wynn has a GF Value rank of 9 out of 10 and a rank of 7 out of 10 for profitability and momentum.

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Las Vegas Sands

The firm invested in 525,000 shares in Las Vegas Sands (

LVS, Financial), giving the position 0.82% equity portfolio weight. Shares averaged $41.59 during the first quarter; the stock is fairly valued based on Tuesday’s price-to-GF Value ratio of 1.02.

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Las Vegas Sands sold in February its Venetian and Palazzo properties on the Strip, moving its primary focus to its Asian properties. The company has a GF Score of 68 out of 100 based on a profitability rank of 7 out of 10, a GF Value rank of 6 out of 10, a momentum rank of 5 out of 10, a financial strength rank of 4 out of 10 and a growth rank of 1 out of 10.

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I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours. Click for the complete disclosure
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