Appaloosa Management founder David Tepper (Trades, Portfolio) disclosed he established positions in three stocks in the third quarter.
According to filings, the firm focuses on investing in “equities and debt of distressed companies, bonds, exchange warrants, options, futures notes and junk bonds.” With positions in 48 stocks, Tepper's portfolio is largely composed of securities in the technology sector.
Tepper initiated positions in Peabody Energy Inc. (BTUPR, Financial), Applied Materials Inc. (AMAT, Financial) and XPO Logistics Inc. (XPO, Financial).
Peabody Energy
The investor purchased 301,316 shares of Peabody Energy’s 8.5% convertible preferred series A stock for an average price of $59.56 per share, giving it 0.26% portfolio space.
The St. Louis-based coal miner has a market cap of $3.33 billion; its common stock (BTU, Financial) was trading around $31.87 on Tuesday with a forward price-earnings (P/E) ratio of 16.
The Peter Lynch chart below shows the stock is trading below its fair value.
GuruFocus ranked Peabody’s financial strength 5 of 10 and its profitability and growth 5 of 10. The company does not pay a dividend.
Tepper is the only guru holding Peabody’s preferred stock. Of the gurus invested in the company’s common stock, Paul Singer (Trades, Portfolio) has the largest position with 20.28% of outstanding shares. Jim Simons (Trades, Portfolio), George Soros (Trades, Portfolio), Chuck Royce (Trades, Portfolio), Steven Cohen (Trades, Portfolio) and Barrow, Hanley, Mewhinney & Strauss also own the common stock.
Applied Materials
Tepper bought 250,000 shares of Applied Materials for an average price of $45.15 per share, expanding the portfolio 0.18%.
The California-based producer of semiconductor manufacturing equipment has a market cap of $60.27 billion; its shares were trading around $56.51 on Tuesday with a P/E ratio of 20.11, a price-book (P/B) ratio of 6.91 and a price-sales (P/S) ratio of 4.44.
According to the Peter Lynch chart below, the stock is trading above its fair value.
GuruFocus ranked Applied Materials’ financial strength 7 of 10 and its profitability and growth 8 of 10. The company’s trailing dividend yield and forward dividend yield are both 0.71%. The dividend payout ratio is 14%.
With 0.42% of outstanding shares, PRIMECAP Management (Trades, Portfolio) is the company’s largest guru shareholder. Other top guru shareholders included the T Rowe Price Equity Income Fund (Trades, Portfolio), First Eagle Investment (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio) and David Carlson (Trades, Portfolio).
XPO Logistics
Tepper invested in 64,311 shares of XPO Logistics for an average price of $60.64 per share, impacting the portfolio by 0.06%.
The Connecticut-based transportation and logistics company has a market cap of $8.65 billion; its shares were trading around $72.2 on Tuesday with a P/E ratio of 59.68, a P/B ratio of 2.64 and a P/S ratio of 0.62.
Based on the Peter Lynch chart below, the stock appears to be trading above its fair value.
GuruFocus ranked XPO’s financial strength 5 of 10 and its profitability and growth 7 of 10. The company does not pay a dividend.
Greenblatt is the company’s largest guru shareholder with 0.24% of outstanding shares. Simons, Pioneer Investments (Trades, Portfolio), Cohen, Michael Price (Trades, Portfolio), Murray Stahl (Trades, Portfolio) and Caxton Associates (Trades, Portfolio) are also shareholders.
Other holdings Tepper added to during the quarter include NRG Energy Inc. (NRG, Financial), Micron Technology Inc. (MU, Financial), Facebook Inc. (FB, Financial), Ally Financial Inc. (ALLY, Financial), Apple Inc. (AAPL, Financial) and Boston Scientific Corp. (BSX, Financial), among others.
Disclosure: I do not own any stocks mentioned.
