Over the past days hedge funds have been filing their form 13-F, which is a quarterly report of equity holdings by filed institutional investment managers with at least $100 million in equity assets under management, as required by the United States Securities and Exchange Commission (SEC). In this article, let´s concentrate in one particular hedge fund and try to see the principal holdings in its portfolio. I will look into David Tepper (Trades, Portfolio)´s Appaloosa Management LP.
Recently the fund reported its equity portfolio, as at the end of December. The total value of the portfolio amounted to $4.05 billion. The filing revealed that at the end of December, the fund added 18 new positions to its equity portfolio and sold out of 12 other companies. The top ten portfolio holdings as of the end of the quarter represented 75.69%. The largest changes from previous 13-F´s fillings were in the consumer discretionary, industrials and finance sector.
In this article, we have selected three companies, in which the fund holds the largest stakes, in terms of market value.
The first on the list is General Motors (GM, Financial), in which the fund disclosed a $512.44 million stake with over 14.68 million shares, down by 2% in the last quarter. The stake represents 12.65% of the fund's portfolio.
The company designs, builds and sells cars, crossovers, trucks and automobile parts worldwide. We know that General Motors is a leader in truck models. Also, cars are having the best design and quality which will contribute to growing sales as vehicle demand recovers and what is important, they would pay more than in the past. As an example we can mention the Chevrolet Impala, which was recently compared to a luxury vehicle.
Revenues declined by 2.15% in the fourth quarter to $ 3.96 billion but earnings per share increased to $0.66 from $0.57 obtained in the same quarter the year prior. During the past fiscal year, the company reported lower earnings of $1.64 versus $2.35 in the previous year. This year, Wall Street expects an improvement in earnings ($4.59 versus $1.64).
Other hedge fund gurus have also been active in the company. Paul Tudor Jones (Trades, Portfolio), Alan Fournier (Trades, Portfolio), Ken Heebner (Trades, Portfolio), Ken Fisher (Trades, Portfolio) and Martin Whitman (Trades, Portfolio) bought the stock in the fourth quarter of 2015, as well as Caxton Associates (Trades, Portfolio).
H C A Holdings Inc. (HCA, Financial) comes in next, the fund owning over 5.01 million shares, worth $367.73 million, down by 6% in the quarter. The stake represents 9.08% of the fund´s portfolio.
The company provides health care services in the United States. It has reported earnings growth of almost 30% in the fourth quarter, and the stock has surged by almost 50% in the last year. Despite this, we believe it could achieve more gains in the future. Especially considering that people 65 years old and older will be the fastest-growing segment. The company has important operations in Florida, the state with the highest expected concentration of these individuals.
Jim Simons (Trades, Portfolio) and Steve Mandel (Trades, Portfolio) initiated positions in this stock in the fourth quarter of 2014. Others that have added the stock were Andreas Halvorsen (Trades, Portfolio) and Steven Cohen (Trades, Portfolio).
In Priceline Com Inc (PCLN, Financial) the fund disclosed ownership of over 361,874 shares, worth $361.30 million, down by 14% in the quarter. The company provides online travel and travel-related reservation and search services. The stake represents 8.92% of the fund´s portfolio.
Looking into the future, we can imagine Priceline´s growth faster than its rival Expedia (EXPE, Financial), due to operations in China, Europe, and of course a continuing expansion in the U.S.
Eric Mindich (Trades, Portfolio), Lee Ainslie (Trades, Portfolio) and Jeremy Grantham (Trades, Portfolio) bought the stock in the last quarter of 2014.
Final comment
Mr. Tepper has about 30% of the value of the portfolio in the aforementioned stocks. However, all of the stocks mentioned have experienced growth in a year-to-date basis. General Motors gained 7.92%, H C A 3.79% and Priceline 0.84%.
Disclosure: Omar Venerio holds no position in any stocks or funds mentioned.
