David Tepper’s Appaloosa: Analyzing Its Top Holdings

On November 14, Appaloosa LP filed its 13F. The hedge fund was started by famous hedge fund manager David Tepper in 1993. Appaloosa made significant changes to its portfolio in the third quarter compared to the second quarter. In the third quarter, the hedge fund included three new stocks, exited five securities, and increased its stake in the existing eight stocks.

David Tepper’s Appaloosa: Analyzing Its Top Holdings

Top buys

In the third quarter, Alphabet (GOOGL), Facebook (FB), Amazon (AMZN), Micron Technology (MU), and Altaba (AABA) were Appaloosa’s top buys. The hedge fund increased its stake in these stocks by 13.4, 10.9, 9.7, 7.1, and 7.1 percentage points, respectively. Notably, Amazon was also a top buy. Meanwhile, Facebook, Micron Technology, and Altaba were among Appaloosa’s top sells in the second quarter. To learn more, read Tepper’s Appaloosa Has 50% S&P Call Option.

In the first quarter, David Tepper’s Appaloosa bought a stake fresh in Amazon. Since then, the hedge fund has increased its holdings in Amazon. On a year-to-date basis, Amazon’s stock prices have risen 16.7% and underperformed the Nasdaq-100 Index by 14.9 percentage points as of Monday.

Analysts’ mean target price suggests an upside of 24.6% in Amazon. Also, among the 49 analysts tracking Amazon, 98% recommend a “buy” or a “strong-buy,” while only one recommends a “hold.” According to a Reuters survey, none of the analysts recommend a “sell” on Amazon. Read Why Did Amazon Stock Fall 2% Last Week? to learn more about Amazon’s stock price movement.

Fresh buys

Appaloosa also included Alibaba (BABA), Broadcom (AVGO), and Boeing (BA) in the third quarter. These stocks accounted for around 6.4, 2.2, and 0.3 percentage points, respectively, of Appaloosa’s total portfolio of publicly traded securities. 

So far this year, Boeing has risen 14.6%. Safety issues related to the company’s 737 MAX aircraft impacted the stock prices. United Airlines canceled a significant number of flights due to the grounding. Read United Extends Boeing MAX Cancellation until March to learn more.

Appaloosa’s top holdings

Alphabet, Facebook, Amazon, Altaba, and Micron Technology were Appaloosa’s top holdings in the third quarter. The stocks accounted for approximately 15.9, 14.7, 13.47, 7.9, and 7.5 percentage points, respectively, of the total portfolio of publicly traded securities.

Notably, in the third quarter, the Alerian MLP ETF (AMLP) and the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) were among Appaloosa’s top 25 holdings. However, the hedge fund sold 0.2 million units of XOP. Energy commodities’ prices are behind the downturn in the energy sector. Read Is Chesapeake Energy Destined to Fall More? to learn more. So far in 2019, XOP and AMLP have fallen 19.8% and 10.2%. 

Appaloosa’s exits

The SPDR S&P 500 ETF (SPY) call options and the Invesco QQQ Trust (QQQ) call options were Appaloosa’s top exits in the third quarter. In the second quarter, these securities accounted for approximately 57.6 and 16.6 percentage points of the total portfolio of publicly traded securities. Since Appaloosa exited these call options in the third quarter, the S&P 500 has been making a new record-high in November. 

In the third quarter, Appaloosa sold all of Qualcomm’s (QCOM) call options. The hedge fund also exited the remaining stake in Intelsat S.A. (I) and Centene (CNC).