David Tepper

David Tepper

Last Update: 08-14-2017

Number of Stocks: 58
Number of New Stocks: 22

Total Value: $6,742 Mil
Q/Q Turnover: 36%

Countries: USA
Details: Top Buys | Top Sales | Top Holdings  Embed:

David Tepper' s Profile & Performance

Profile

David Alan Tepper is the founder of Appaloosa Management, which is a $3 billion hedge fund investment firm based in Chatham, N.J., just west of New York City. David Tepper initially became interested in the stock market as a young boy watching his father trade stocks in his hometown of Pittsburgh. Today, as president and founder of Appaloosa Management, Tepper has earned an international reputation for producing some of the highest returns amongst fund managers on Wall Street. He earned a master of science in industrial administration from Carnegie Mellon in 1982. He donated a record $55 million to the Graduate School of Industrial Administration. The gift is the largest donation to Carnegie Mellon University in its 104-year history.

Investing Philosophy

He is a distressed-debt specialist, was once considered to be the hottest investor on wall street.

Total Holding History

Performance of Appaloosa Investment LP I

YearReturn (%)S&P500 (%)Excess Gain (%)
20142.2813.69-11.4
201342.3632.3910.0
201229.291613.3
3-Year Cumulative88.3 (23.5%/year)74.6 (20.4%/year)13.7 (3.1%/year)
2011-3.532.11-5.6
20102215.066.9
5-Year Cumulative121.6 (17.2%/year)105.1 (15.5%/year)16.5 (1.7%/year)
2009132.7226.46106.3
2008-26.72-3710.3
20078.885.493.4
200625.8615.7910.1
200520.554.9115.6
10-Year Cumulative524.2 (20.1%/year)109.4 (7.7%/year)414.8 (12.4%/year)
200433.8110.8822.9
2003148.8228.68120.1
2002-24.8-22.1-2.7
200166.75-11.8978.6
20000.04-9.19.1
15-Year Cumulative2507 (24.3%/year)86.4 (4.2%/year)2420.6 (20.1%/year)
199960.8921.0439.8
1998-29.1928.58-57.8
199729.5433.36-3.8
199678.4622.9655.5
199542.0637.584.5
20-Year Cumulative9654.1 (25.7%/year)554.6 (9.8%/year)9099.5 (15.9%/year)
199419.031.3217.7
199357.6210.0847.5

Top Ranked Articles

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How David Tepper Became a Billionaire

Several major deals highlighted David Tepper’s career before he established his fame by making the all-time record payday of $4 billion investing in near-bankrupt banks in 2009. The distressed debt specialist actually made his all-time record return of 148% back in 2003 and has had a 30% average annualized return since he founded his firm, Appaloosa Management, in 1993.

Tepper primarily specializes in distressed debt investing. He tends to buy distressed debt of companies on the verge of implosion and sells it when it matures. His firm now manages about $4 billion.

Power Companies (2001-2004)

Tepper’s assurance that the government would not let banks fail had at least one precedent. He made a small fortune in 2004 in a similar situation during the California electricity crisis. In 2000 and 2001, large swaths of the state of California faced blackouts and prominent electricity companies went bankrupt. The disaster began when energy companies created an artificial shortage by shutting down power plants for maintenance during times of peak usage. They then increased the price, allowing traders to sell power at significantly higher rates.

The government had also placed a price cap on retail electricity charges, which forced the industry to sell electricity at a loss. Drought and population growth in California exacerbated the situation. Consequently, Pacific Gas and Electric Company (PCG) went bankrupt, and Southern California Edison nearly went bankrupt as well.

The state of California stepped in to save the dying companies, which had together accumulated $20 billion of debt by early 2001 and had their credit ratings reduced to junk status. On January 2001, the state authorized the California Department of Water and Resources to buy power for Southern California Edison, and later it did the same for SDG&E. Companies resumed purchasing their own power in 2003.

David Tepper bought millions of shares of the two most affected power companies, Pacific Gas and Electric and Edison International (EIX), from 2001-2003, mostly when their stock traded in the teens or lower. He sold out of both companies in the beginning of 2004, when their stock had risen to the mid-$20s.

Enron, Worldcom, Conseco Bankruptcies (2002-2004)

In 2002 Tepper purchased at least $1 billion of the $14 billion of distressed debt and securities of one company that went bankrupt in the fallout of the energy crisis – Enron. Enron was accused of gaming the energy market and collapsed due to unethical bookkeeping and other causes.

Another company’s epic bankruptcy that year that paid off for Tepper. Worldcom concealed losses and misled the public about earnings, causing bond investors to lose about $7.6 billion when it defaulted on its debt, which Tepper purchased. “I’m buying a little bit today. It’s a big company with a lot of revenue so we probably will end up making money,” Tepper told the Seattle Times.

Conseco Inc., a U.S. insurance company that filed Chapter 11 bankruptcy in 2003, canceled its stock and gave ownership of the company in large part to bondholders. Tepper bought a large amount of cheap Conseco bonds when it was on the brink of bankruptcy. Conseco emerged from bankruptcy in 2003.

In 2003, Tepper returned 148% and in 2004, he was the second highest paid hedge fund manager, making $510 million, according to Institutional Investor.

Banks (2009)

Tepper’s seminal trades were made in 2009. Similar to John Paulson, he bought into financials confident that the government would not let the largest banks fail. While banks were teetering on the brink of bankruptcy and the majority of investors were believing the government would nationalize them, Tepper amassed bank-related securities, such as common and preferred shares and junior-subordinated debt.

In the first quarter of 2009, he bought 47.55 million shares of Bank of American at an average price of $6.73 per share. He then decreased his stake steadily as the stock rallied, reaching an average price of $15.79 in the fourth quarter of 2009.

He bought Bank of America preferred shares at 12 cents on the dollar and Citigroup bonds at 19 cents, and other bank debt of Washington Mutual and common and preferred shares of Wachovia, NBC reported. By the end of 2009, the companies’ stocks had recovered and he made billions.

In 2009 he made the highest payday in history of $4 billion, and achieved his second highest return of 132.7%.

Housing (2011)

With few large companies or sectors going under, Tepper has turned to one of the most distressed industries available – housing. He bought KB Homes (KBH), D.R. Horton Inc. (DHI), Pulte Group Inc. (PHM), Beazer Homes USA Inc. (BZH), Ryland Group Inc. (RYL), and Masco Corp. (MAS) in the first quarter of 2011.

Though none of the companies have balance sheets that forebode bankruptcy and none have announced an intention to, their stocks are cheap. The once-thriving companies now sell in the teens or lower.

Tepper is profiting less from disaster in the first quarter. His top five holdings are Citigroup (C), Prizer Inc. (PFE), Hewlett Packard Co. (HPQ), Bank of America Corp. (BAC), Goodyear Tire & Rubber (GT).

Commentaries and Stories

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David Tepper Reduces General Motors, Allergan Positions, Exits Pfizer The guru's 8 largest 2nd-quarter sales David Tepper - David Tepper Reduces General Motors, Allergan Positions, Exits Pfizer
Appaloosa Management founder David Tepper (TradesPortfolio) sold shares of the following stocks during the second quarter: More...

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David Tepper Sells Airline Stocks Except Delta Tepper just increased his positions in the first quarter David Tepper - David Tepper Sells Airline Stocks Except Delta
Head of successful hedge fund Appaloosa Management, David Tepper (Trades, Portfolio) shied away from airlines in the second quarter after upping his bets in the first three months of the year, according to his portfolio filing released this week. More...

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David Tepper Adds 3 Positions in 2nd Quarter Guru invests in retail, online media and Nasdaq ETF David Tepper, Daniel Loeb, Ken Heebner, Julian Rob - David Tepper Adds 3 Positions In 2nd Quarter
Appaloosa Management founder David Tepper (Trades, Portfolio) established three positions during the second quarter: Alibaba Group Holding Ltd. (NYSE:BABA), Altaba Inc. (NASDAQ:AABA) and PowerShares QQQ Trust Series 1 (NASDAQ:QQQ). More...

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Exploit Errors to Find Your Edge Determining who makes mistakes – and how – in stock market wagers David Tepper,Ray Dalio,George Soros,Warren Buffett - Exploit Errors To Find Your Edge
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John Rogers Cuts Tiffany, Franklin Resources in 1st Quarter The guru's largest sales John Rogers,David Tepper,Mario Gabelli,Pioneer Inv - John Rogers Cuts Tiffany, Franklin Resources In 1st Quarter
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Risk-Reward With Teva Pharmaceutical With the stock down close to 40% over the last year, is it a buy or a value trap? David Tepper - Risk-Reward With Teva Pharmaceutical
As two of its largest guru shareholders, John Paulson (TradesPortfolio) and David Tepper (TradesPortfolio) are dead wrong on Teva Pharmaceutical Industires Ltd. (NYSE:TEVA). Teva is a value trap even if the stock had a short-term price pop. Paulson owns 15.9 million shares, good for 7.36% of his portfolio, while Tepper owns 5.05 million shares, good for 3.25% of his total assets managed. More...

HEALTHCARE, BIOTECH, TEVA, ALLERGEN


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The Most Attractive Value Stock There Is? These value investors love Allergan Carl Icahn,David Tepper - The Most Attractive Value Stock There Is?
Of all the data contained in hedge fund 13F filings published over the past few weeks for trading activity conducted during the last quarter of 2016, there is one trend that really stands out. More...

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David Tepper Discusses Interest Rates, GOP Plans, Border Tax Tepper addressed several economic topics David Tepper - David Tepper Discusses Interest Rates, GOP Plans, Border Tax
David Tepper (Trades, Portfolio), the famed founder of Appaloosa Management, spoke on CNBC Wednesday morning about the direction of the U.S. economy and market under the GOP's plans and the possibility of a Fed rate hike. More...

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David Tepper Discusses Allergan Investment, Market Valuation Tepper thinks the market is fully valued but has other factors going for it David Tepper - David Tepper Discusses Allergan Investment, Market Valuation
Appaloosa Management founder David Tepper (Trades, Portfolio) discussed his investment in pharma stocks in an interview with CNBC Wednesday morning. Tepper particularly favors Allergan (NYSE:AGN) due to its attractive valuation following Valeant (NYSE:VRX)'s trouble, which affected the sector. Tepper also discussed his assessment of market valuations and the global economy. More...

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David Tepper Bought Snap and Would Buy More Tepper discussed social media investment in CNBC interview David Tepper - David Tepper Bought Snap And Would Buy More
David Tepper (Trades, Portfolio), Appaloosa Management leader, said he bought Snap Inc. (NYSE:SNAP) at its IPO and said he would sell if it went high into the $20s. He also said he was not excited about it at $21.80 per share but would accumulate more if it fell back to its IPO price. Tepper said he believes the demographic for the app would expand to older people as it positions itself to benefit from an "anti-Facebook" attitude amoung young people. More...

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David Tepper Invests Heavily in Pharma in 4th Quarter Guru gains 4 drug manufacturers, adds to Allergan David Tepper,Barow Hanley Mewhinney & Strauss,Vang - David Tepper Invests Heavily In Pharma In 4th Quarter
David Tepper (Trades, Portfolio), founder and president of Appaloosa Management, gained new holdings in pharmaceutical companies in the final quarter of 2016. More...

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David Tepper Exits Community Health Systems The company's operating margin has been in long-term decline and it has a high short percentage of float David Tepper - David Tepper Exits Community Health Systems
Guru David Tepper (Trades, Portfolio) sold his remaining 6,270,130 shares of Community Health Systems (NYSE:CYH) during the third quarter. The trade had a -1.99% impact on Tepper’s portfolio. More...

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Have You Heard of the 'Cheap Optionality' Strategy? An independent retail trader used it to turn $46,000 into $6.8 million in 28 months David Tepper - Have You Heard Of The 'Cheap Optionality' Strategy?
It probably didn’t take long after becoming a trader to stumble upon options. Brokerages and Web sites all over the Internet are constantly pitching these complex financial derivatives, claiming things like “defined risk” and “100% returns a month.” But these advertisements only end up luring novices into a game that creates losses rather than stunning returns. More...

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