David Tepper and Appaloosa's Top Five Stock Holdings

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May 15, 2014
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Appaloosa founder and renowned hedge fund manager David Tepper is widely regarded for his excellent returns as well as his near perfect timing on his purchases. The guru made his much of his wealth by foreseeing and accurately playing the housing crisis and the financial recovery that was to follow.

Over the first quarter, David Tepper made new buys in to three stocks across various sectors of the market. The hedge fund’s portfolio holds 58 stocks and is valued at nearly $9.06 billion, which is notably up from the fourth quarter’s portfolio value of $7.98 billion.

The following companies are Tepper’s five largest individual stock holdings as of the fourth quarter. Tepper also holds notable stakes in the SPDR S&P 500 ETF (SPY) as well as in PowerShares QQQ Trust (QQQ).

Citigroup (C)

David Tepper’s largest stock position over the past quarter was in Citigroup where he held on to 10,075,139 shares of the company’s stock. His holdings in Citigroup made up for 5.3% of his total portfolio as well as 0.33% of the company’s shares outstanding.

Over the past quarter Tepper increased his holdings 4.13% by adding 400,000 shares of the company’s stock. He bought these shares in the quarterly price range of $46.34 to $55.20, with an estimated average quarterly price of $49.81 per share. Since then the price per share has decreased -6.6%.

Tepper’s historical holding history:

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Citigroup is a global financial services holding company, whose businesses provide consumers, corporations, governments and institutions with a range of financial services such as consumer banking, credit cards, corporate and investment banking, securities brokerage and wealth management.

Citigroup’s historical revenue and net income:

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The analysis on Citigroup reports that the company’s revenue has been in decline over the past five years. It also notes that the company’s P/S ratio is nearing a 5-year high.

The Peter Lynch Chart suggests that the company is currently undervalued:

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Citigroup has a market cap of $141.32 billion. Its shares are currently being traded at around $46.52 with a P/E ratio of 10.40, a P/B ratio of 0.70 and a P/S ratio of 1.90.

American Airlines Group (AAL)

Tepper’s second largest holding is in American Airlines Group. He holds on to 8,602,148 shares of the company’s stock, representing 3.5% of his total portfolio.

Over the past quarter, Tepper upped his holdings 22.49% by purchasing 1,579,383 shares of the company’s stock. He bought these shares near the estimated average quarterly price of $34.04. Since then the price per share has increased approximately 12.2%.

Tepper’s historical holding history:

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The company through its main subsidiary, American Airlines., offers scheduled jet service to approximately 160 destinations throughout North America, the Caribbean, Latin America, Europe and Asia.

American Airlines’ historical revenue and net income:

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The analysis on AAL reports that the company’s asset growth rate is faster than its revenue growth rate, indicating that the company may be getting less efficient.

American Airlines Group has a market cap of $27.55 billion. Its shares are currently trading at around $38.25 with a P/E ratio of 10.30 and a P/S ratio of 0.40.

Goodyear Tire & Rubber (GT)

The guru’s third largest position goes to Goodyear Tire & Rubber where he holds on to 12,154,921 shares. This position makes up for 3.6% of his total portfolio and 4.94% of the company’s shares outstanding.

During the first quarter Tepper reduced his holdings -7.19% by selling a total of 873,825 shares of the company’s stock. He sold these shares in the price range of $22.62 to $28.12, with an estimated average quarterly price of $25.47 per share. Since his sell the price per share has dropped approximately -2.7%.

Tepper’s historical holding history:

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Goodyear Tire is a manufacturer of tires and rubber products. It also manufactures and markets several lines of power transmission belts, hoses and other rubber products for the transportation industry and various industrial and chemical markets, and rubber-related chemicals for various applications.

Goodyear Tire & Rubber’s historical revenue and net income:

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The analysis on Goodyear reports that the company has issued $1.5 billion of debt over the past three years, its revenue has been in decline over the past year and its price is trading at a near 1-year high.

The Peter Lynch Chart suggests that the company is currently undervalued:

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Goodyear Tire & Rubber has a market cap of $6.16 billion. Its shares are currently trading at around $24.79 with a P/E ratio of 11.20, a P/S ratio of 0.30 and a P/B ratio of 11.60. The company had an annual average earnings growth of 28.30% over the past five years.

Halliburton (HAL)

The guru’s fourth largest position is in Halliburton where he maintains 5,024,621 shares of the company’s stock. This position makes up for 3.3% of his total portfolio as well as 0.55% of the company’s shares outstanding.

Over the past quarter Tepper upped his holdings 406.21% by purchasing 4,032,021 shares of the company’s stock. He bought these shares near the estimated average quarterly price of $53.41 per share. Since this buy the price per share has gone up 16.8%.

Tepper’s historical holding history:

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Halliburton is a provider of services and products to the energy industry related to the exploration, development, and production of oil and natural gas.

Halliburton’s historical revenue and net income:

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The analysis on Halliburton reports that the company’s dividend yield is at a 2-year low, its revenue has slowed down over the past year and its price is trading at near a 10-year high.

The Peter Lynch Chart suggests that the company is currently overvalued:

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Halliburton has a market cap of $52.67 billion. Its shares are currently trading at around $62.37 with a P/E ratio of 25.90 and a P/S ratio of 1.80. The company had an annual average earnings growth of 11.90% over the past ten years.

HCA Holdings (HCA)

Tepper’s fourth largest position goes to HCA Holdings where he owns 5,326,882 shares. His holdings represent 3.1% of his total assets managed as well as 1.19% of the company’s shares outstanding.

During the first quarter Tepper upped his holdings 4.42% by purchasing a total of 225,500 shares of the company’s stock. He bought these shares in the quarterly price range of $47.65 to $52.50, with an estimated average quarterly price of $49.76. Since his increase the price per share is up about 4.7%.

Tepper’s holding history as of the first quarter:

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HCA Holdings owns and operates hospitals and related health care entities. The company's general, acute care hospitals provide a range of services to accommodate such medical specialties as internal medicine, general surgery, cardiology, oncology, neurosurgery, orthopedics, and obstetrics, as well as diagnostic and emergency services.

HCA Holdings’ historical revenue and net income:

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The analysis on HCA Holdings reports that the company has issued $1.6 billion of debt over the past three years, its operating margin is expanding and its price is sitting near its 3-year high.

The Peter Lynch Chart suggests that the company is currently overvalued:

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HCA Holdings has a market cap of $23.19 billion. Its shares are currently trading at around $52.16 with a P/E ratio of 15.40 and a P/S ratio of 0.70. The company had an annual average earnings growth of 6.60% over the past ten years.

Check out the rest of David Tepper’s fourth quarter portfolio here.

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