Billionaire David Tepper Snapped Up These Stocks in Q4

#3 Abengoa Yield PLC (NASDAQ:ABY)

– Shares Owned by Appaloosa Management LP (as of December 31): 6.3 million

– Value of Holding (as of December 31): $121.6 million

Spanish clean energy company Abengoa Yield PLC (NASDAQ:ABY), is another firm which has lost a significant amount of its market capitalization since the beginning of the second-half of last year, and in which Appaloosa Management LP initiated a stake during the fourth quarter. In November of last year, Abengoa Yield’s parent company Abengoa SA started looking for investors willing to take on at least part of its stake in the former to pay off the humongous amount of debt on its balance sheet. In order to save itself from becoming Spain’s largest bankruptcy, on January 25, Abengoa SA announced that its board had agreed to go forward with a debt restructuring and asset sale plan. On January 7, Abengoa Yield PLC (NASDAQ:ABY) announced that it changed its corporate brand to Atlantica Yield and that it named Francisco Martinez-Davis as its new CFO.

#2 Kinder Morgan Inc (NYSE:KMI)

– Shares Owned by Appaloosa Management LP (as of December 31): 9.44 million

– Value of Holding (as of December 31): $141 million

Moving on, the heavy decline in crude and natural gas prices last year resulted in Kinder Morgan Inc (NYSE:KMI) losing 65% of its market capitalization and forced it to reduce its quarterly dividend to $0.13 per share from $0.51 per share. However, it’s the only company in this list that is trading in the green, up by 0.2%, this year. During the company’s latest quarterly conference call, its founder and Chairman, Richard D. Kinder, laid out a new strategy for the company going forward. He revealed that Kinder Morgan Inc (NYSE:KMI) has significantly reduced its anticipated capital expansion expenditures for 2016 and by slashing its dividends it now has much better flexibility in how it uses its nearly $5 billion per year in free cash flow. Mr. Kinder highlighted that the company can now use that cash flow to delever its balance sheet and totally fund its growth capital needs. On January 19, analysts at RBC Capital reiterated their ‘Sector Perform’ rating on the stock, while boosting their price target on it to $17 from $15.

#1 Energy Transfer Partners LP (NYSE:ETP)

– Shares Owned by Appaloosa Management LP (as of December 31): 5.14 million

– Value of Holding (as of December 31): $173.48 million

Appaloosa Management’s largest new stake and its ninth-largest equity holding at the end of fourth quarter is another master limited partnership, Energy Transfer Partners LP (NYSE:ETP). Like Kinder Morgan Inc, Energy Transfer Partners LP (NYSE:ETP) also lost a major chunk of its market cap last year. However, unlike Kinder Morgan, the company has continued its downward march this year too, down by 30% year-to-date, and hasn’t made any notable change to its dividend payout. The $1.05 per share quarterly dividend that Energy Transfer Partners currently pays represents an astonishingly high annual dividend yield of almost 18% at its current market price. Several analysts who cover the MLP are not optimistic about its future, citing the high level of debt on its balance sheet, the tough macro environment it’s operating in, and its low coverage ratio. On February 8, analysts at Robert W. Baird downgraded the stock to ‘Neutral’ from ‘Outperform’ and also reduced their price target on it by more than half, to $25 from $51. Jim Simons‘ Renaissance Technologies made a greater than two-fold increase to its stake in Energy Transfer Partners during the fourth quarter, to 7.08 million shares.

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