David Teppers Hedge Fund Outperforms The Market Third Quarter Holdings

The New Jersey-based hedge fund Appaloosa Management run by David Tepper has performed admirably on the backdrop of volatile market conditions this year. Institutional Investor’s Alpha reports that the distressed credit manager is up 25 percent for the year before fees – outperforming the S&P 500 by close to 900 basis points in the same period. The former Goldman Sachs trader currently manages around US$12 billion in assets with around US$4 billion of that pool invested in US equities as of the latest quarter.

In the third quarter, Appaloosa initiated six new positions in stocks and one in ETFs. Amongst the largest are 8.25 million shares of AIG [AIG] for US$271 million, 2.4 million shares of JP Morgan [JPM] for US$97 million and 2 million shares of Sealed Air Corp [SEE] for US$31 million. Here is a chart of how they are doing against the S&P 500:

Furthermore, the hedge fund also bought an additional 928,525 shares in Citigroup [C] to take its total stake in the company to 10,194,547 shares. It also boosted its stake in The Hartford Financial Services Group [HIG], by 2,539,694 shares to a total of 3,612,650 shares; and General Motors [GM] by 1,239,084 shares to a total of 5,952,400 shares. Here is a chart of how they are doing against the S&P 500:

In contrast, David Tepper cut his stake in Valero Energy Corp [VLO] by two thirds — selling 1,464,444 shares in the third quarter with 842,717 shares remaining in the independent petroleum refining and marketing company. The hedge fund also eliminated its entire stake in Nuance Communications [NUAN], and the Royal Bank of Scotland [RBS].

Here is a list of the top ten positions Appaloosa Management holds as of the latest quarter, sorted by market value:

 

1. PowerShares QQQ Trust, Series 1 ( QQQ, Earnings, Analysts, Financials): The Trust’s investment objective is to provide investment results that generally correspond to the price and yield performance of the Nasdaq-100 Index. Sold 1.96 million shares for a remaining holding of 6.44 million shares

 

2. Apple Inc. ( AAPL, Earnings, Analysts, Financials): Designs, manufactures, and markets personal computers, mobile communication and media devices, and portable digital music players, as well as sells related software, services, peripherals, networking solutions, and third-party digital content and applications worldwide. Market cap at $550.1B, most recent closing price at $584.78. Acquired an additional 4,850 shares for a total holding of 521,188 shares

 

3. Citigroup, Inc. ( C, Earnings, Analysts, Financials): Provides consumers, corporations, governments, and institutions with a range of financial products and services. Market cap at $102.76B, most recent closing price at $35.04. Acquired an additional 928,525 shares for a total holding of just above 10 million shares

 

4. American International Group, Inc. ( AIG, Earnings, Analysts, Financials): The company operates property and casualty insurance networks worldwide and conducts activities in the U.S. life insurance and retirement services industry. Market cap at $47.96B, most recent closing price at $32.49. Initiated a new position with 8.25 million shares worth about US$271 million

 

5. United Continental Holdings, Inc. ( UAL, Earnings, Analysts, Financials): Engages in the provision of passenger and cargo air transportation services. Market cap at $6.69B, most recent closing price at $20.14. Added 334,407 shares for a total holding of 9,818,965 shares

 

6. Goodyear Tire & Rubber Co. ( GT, Earnings, Analysts, Financials): Engages in the development, manufacture, distribution, and sale of tires, and related products and services to consumer and commercial customers worldwide. Market cap at $2.86B, most recent closing price at $11.67. Acquired approximately 3 million shares for a total holding of just above 14 million shares

 

7. Google Inc. ( GOOG, Earnings, Analysts, Financials): Google is the world’s most popular search engine. Market cap at $220.39B, most recent closing price at $670.71. Sold 26,347 shares for a total holding of 195,000 shares

 

8. QUALCOMM Incorporated ( QCOM, Earnings, Analysts, Financials): Engages in the development, design, manufacture, and marketing of digital wireless telecommunications products and services. Market cap at $106.09B, most recent closing price at $62.26. No change in total shareholding of 2,304,786 shares

 

9. US Airways Group, Inc. ( LCC, Earnings, Analysts, Financials): Provides air transportation for passengers and cargo. Market cap at $2.07B, most recent closing price at $12.72. Added 676,800 shares for a total position of 13,603,495 shares

 

10. General Motors Company ( GM, Earnings, Analysts, Financials): Operates as a global automaker. Market cap at $39.17B, most recent closing price at $25.01. Added 1,239,084 shares for a total position of 5,952,400 shares

 

 

Written by SiHien Goh

 

 

 

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