Cheap Stocks in David Tepper's Portfolio: CNO, COF, PFE, STD

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Sep 24, 2010
David Tepper is one of most successful hedge fund managers of our time. He loves to buy assets when they are most distressed and cheap, and rake in big gains when things recovered.


“We lead he herd,” he says over a lunch earlier this week, according to CNBC. “The Street follows us, we don’t follow the Street.”


According to the same article, David Tepper was able to buy Bank of America preferred shares at just twelve cents on the dollar and Citigroup bonds at just nineteen cents. As those stocks rallied by the end of 2009, Appaloosa raked in the billions.


Buying assets when they are cheap and distressed is the secret for David Tepper’s success. We are going through David Tepper’s portfolio to see what cheap stocks he has. These are stocks that have below market average p/e ratios within his portfolio:


Conseco Inc. (CNO, Financial)


CNO Financial Group, Inc. is a holding company for a group of insurance companies operating throughout the United States that develop, market and administer supplemental health insurance, annuity, individual life insurance and other insurance products. Conseco Inc. has a market cap of $1.31 billion; its shares were traded at around $5.23 with a P/E ratio of 7 and P/S ratio of 0.3.





David Tepper bought into CNO when it was cheap in the first quarter of 2009. He has since more than doubled his money with CNO and reducing his positions.


Capital One Financial Corp. (COF, Financial)


Capital One Financial is a holding company whose subsidiaries provide a variety of products and services to consumers using its proprietary information-based strategy. Capital One Financial Corp. has a market cap of $17.21 billion; its shares were traded at around $37.67 with a P/E ratio of 7.1 and P/S ratio of 1.1. The dividend yield of Capital One Financial Corp. stocks is 0.5%. Capital One Financial Corp. had an annual average earning growth of 0.4% over the past 10 years.





Again Mr. Tepper bought into Capital One when it is at the bottom. The price has since more than doubled. COF, among other banks like Bank of America and Citigroup, is the financial stocks he bought into when no one wants them. He is reducing his positions with COF now.


Pfizer Inc (PFE, Financial)


Pfizer Inc is a research-based, global pharmaceutical company that discovers and develops innovative, value-added products that improve the quality of life of people around the world and help them enjoy longer, healthier, and more productive lives. Pfizer Inc has a market cap of $136.97 billion; its shares were traded at around $17.04 with a P/E ratio of 7.6 and P/S ratio of 2.8. The dividend yield of Pfizer Inc stocks is 4.2%. Pfizer Inc had an annual average earning growth of 1.8% over the past 10 years.





Pfizer Inc. is a relatively new position in David Tepper’s portfolio, He started the position about 6 months ago and added to his position in Pfizer Inc. with the average cost of around $17, this is about what the stock is traded at. Pfizer is not more than 5% of his equity portfolio.


If you missed other opportunities David Tepper bought before, you are still ok with Pfizer Inc. if you get in now.


Banco Santander Central Hispano S.A. (STD, Financial)

Banco Santander SA is the biggest bank in Spain and the biggest international bank in Latin America as well. Banco Santander Central Hispano S.a. has a market cap of $100.89 billion; its shares were traded at around $12.26 with a P/E ratio of 8.6 and P/S ratio of 1. The dividend yield of Banco Santander Central Hispano S.a. stocks is 6.7%. GuruFocus rated Banco Santander Central Hispano S.a. the business predictability rank of 4.5-star.





Banco Santander is a new position for David Tepper. He bought into STD during the second quarter, when investors worried about Europe and the survival of Spanish national debt. David Tepper got into the distressed situation again.


Banco Santander is now traded at about what David Tepper paid. Again it is not too late if you want to follow him into the position.


To check the complete list of cheap stocks of David Tepper, please go to http://www.gurufocus.com/holdings.php?GuruName=David+Tepper&tab=lowpe, Please also check out these links: David Tepper Top Holdings, Low P/E stocks, High Yield Stocks, Top Predictable Companies, Top Growth Companies.