In this article, we discuss the 10 stocks that billionaire David Tepper is loading up on. If you want to skip our comprehensive analysis of David Tepper’s history, investment philosophy, and hedge fund performance, go directly to Billionaire David Tepper is Loading Up on These 5 Stocks.
David Tepper is an American billionaire who is the president and founder of New Jersey-based hedge fund Appaloosa Management. With a personal net worth of $15.8 billion, Tepper is one of the most successful investors on Wall Street, with over three decades of impressive returns and visionary investments under his belt.
The highlight of his career on Wall Street was being named the top-earning hedge-fund manager in 2009 after his bet on depressed bank securities during the financial crisis generated a 132% return and $4 billion in personal wealth. The billionaire has a degree in Economics from the University of Pittsburgh, and an MBA from Carnegie Mellon University’s business school, which is now named after him as David A. Tepper School of Business.
After being overlooked for promotion twice during his time at Goldman Sachs, David Tepper formed his own hedge fund, Appaloosa Management, with $57 million in capital in 1993. The fund focuses on public equity and fixed income markets around the world, and posted 57% returns within the first six months, with assets under management (AUM) ballooning to $300 million in 1994. The fund’s assets enjoyed a peak of $20 billion in 2014, and have posted strong returns over the years, including 20% in 2016.
As of December 2021, Tepper’s Appaloosa Management boasts a $4.19 billion portfolio of assets, down from $4.8 billion a quarter ago. The fund’s holdings are diversified around the Services, Financial, Industrial Goods, Healthcare, and Utilities sectors. Some of the notable stocks in David Tepper’s 13F portfolio include Alphabet Inc. (NASDAQ:GOOG), Meta Platforms, Inc. (NASDAQ:FB), and Amazon.com, Inc. (NASDAQ:AMZN).
Our Methodology:
For this article we picked the stocks in which David Tepper’s fund increased its stakes in the third quarter.
David Tepper’s 13F portfolio for the third quarter was used for this analysis. Hedge fund sentiment was derived from Insider Monkey’s database of 867 elite hedge funds.
Billionaire David Tepper is Loading Up on These 10 Stocks
10. Alphabet Inc. (NASDAQ:GOOG)
Appaloosa Management’s Stake Value: $391.80 million
Appaloosa Management’s 13F Portfolio: 9.33%
Number of Hedge Fund Holders: 156
According to the 13F filings for the third quarter, Tepper upped his holdings in Alphabet Inc. (NASDAQ:GOOG) by 1% over the last quarter. Appaloosa Management currently holds 147,000 shares in the tech company, with a combined value of $391.80 million which represents 9.33% of the fund’s overall portfolio. Alphabet Inc. (NASDAQ:GOOG) is the parent company of Google and its related platforms including Gmail and YouTube.
Hedge fund sentiment is positive on Alphabet Inc. (NASDAQ:GOOG), as 156 hedge funds reported owning stakes in the company by the end of the third quarter, as compared to 155 hedge funds in the previous quarter.
On December 3, Tigress Financial analyst Ivan Feinseth maintained a ‘Strong Buy’ rating on Alphabet Inc. (NASDAQ:GOOG) stock, raising the price target $3,540 from $3,185. The analyst noted that the company’s increasing focus and investments towards developing AI capabilities was the driver of significant growth opportunities.
In the third quarter, Alphabet Inc. (NASDAQ:GOOG) reported earnings per share of $27.99, which beat consensus estimates by $4.75.
Investment management firm Riverpark Funds mentioned Alphabet Inc. (NASDAQ:GOOG) in its Q3 investor letter. Here’s what the fund said:
“Internet services leader Alphabet was also a top contributor for the quarter, hitting its all-time high on September 1. Fundamentals at the company remain stellar—the company reported its highest quarter ever for sales and profit in late July. The company reported second quarter revenue of $62 billion, an increase of 62% year over year, which, when combined with strong expense controls, led to a tripling of operating income to $19 billion. The company experienced strong revenue growth across all its segments—Google Services (mostly Advertising) grew 63%, Google Cloud grew 54% and Other Bets grew 30%.
With its continued strength across its core Search and YouTube franchises and emerging strength in its still small Cloud business, we continue to view Alphabet as among the best-positioned secular growth franchises. Additionally, despite its strong performance this year, GOOG shares trade at a compelling 20x our 2022 EPS estimate (which includes earnings drags from losses in its Other Bets and Google Cloud segments, which lost a combined $2 billion last quarter), only a slight premium to the market.”
Just like Alphabet Inc. (NASDAQ:GOOG), Meta Platforms, Inc. (NASDAQ:FB) and Amazon.com, Inc. (NASDAQ:AMZN) are some of the most notable stock picks in Billionaire David Tepper’s portfolio.
9. PulteGroup, Inc. (NYSE:PHM)
Appaloosa Management’s Stake Value: $70.71 million
Appaloosa Management’s 13F Portfolio: 1.68%
Number of Hedge Fund Holders: 35
David Tepper was seen loading up on PulteGroup, Inc. (NYSE:PHM) by the end of Q3 2021, increasing his stake in the company by 3% from the previous quarter. According to the regulatory filings for the third quarter, Tepper’s Appaloosa Management owns 1,540,000 shares in PulteGroup, Inc. (NYSE:PHM), valued at $70.71 million.
PulteGroup, Inc. (NYSE:PHM) offers home construction and mortgage insurance services in the United States and operates through its segments: Homebuilding and Financial Services. As of the end of the third quarter, the company reported an EPS of $1.82, beating consensus estimates by $0.03. Quarterly revenue stood at $3.48 billion, exceeding analysts’ forecasts by $51.39 million.
35 hedge funds out of 867 tracked by Insider Monkey reported owning shares in PulteGroup, Inc. (NYSE:PHM) by the end of Q3 2021. The combined value of these stocks stood at $771.75 million. This shows an upward trend from last quarter where 34 hedge funds held stocks worth $948.57 million in the company.
On November 8, BofA analyst Rafe Jadrosich reinstated his firm’s coverage of PulteGroup, Inc. (NYSE:PHM) with an ‘Underperform’ rating, and a $53 price target.
8. D.R. Horton, Inc. (NYSE:DHI)
Appaloosa Management’s Stake Value: $100.34 million
Appaloosa Management’s 13F Portfolio: 2.38%
Number of Hedge Fund Holders: 51
D.R. Horton, Inc. (NYSE:DHI) engages in the construction and sale of single-family housing units in the United States. As of the third quarter, 51 hedge funds out of 867 tracked by Insider Monkey reported owning stakes in the construction company, with a combined value of $2.18 billion. This shows that investor confidence in D.R. Horton, Inc. (NYSE:DHI) is growing, as 45 hedge funds reported owning $1.88 billion worth of stakes a quarter ago.
On November 17, research firm Raymond James kept its ‘Strong Buy’ rating on D.R. Horton, Inc. (NYSE:DHI) shares, raising the price target to $120 from $110. The firm’s analyst Buck Horne noted that the company’s Q4 results and recent virtual investor meetings paint a good picture for housing demand entering into the next year, and that the company is expected to enjoy ~20% revenue growth in FY22.
As of the third quarter, David Tepper owns 1,195,000 shares in D.R. Horton, Inc. (NYSE:DHI), valued at $100.34 million. This shows an increase of 5% over the last quarter, where Tepper held 1.14 million shares in the company.
The firm posted an EPS of $3.70 for the third quarter, beating estimates by $0.32. D.R. Horton, Inc. (NYSE:DHI) raked in $8.11 billion in revenue for the quarter, which was above analysts’ forecasts by $339.27 million.
7. Occidental Petroleum Corporation (NYSE:OXY)
Appaloosa Management’s Stake Value: $196.41 million
Appaloosa Management’s 13F Portfolio: 4.67%
Number of Hedge Fund Holders: 60
Occidental Petroleum Corporation (NYSE:OXY) is a Texas-based energy company that deals in the exploration and development oil and natural gas products. According to 13F filings for the third quarter, Appaloosa Management owns 6,640,000 shares in Occidental Petroleum Corporation (NYSE:OXY) valued at $196.41 million, up 17% over the last quarter where the fund held 5.71 million shares in the company
Occidental Petroleum Corporation (NYSE:OXY) released its earnings report for the third quarter on November 4, and reported earnings per share of $0.87, which beat consensus estimates by $0.21. The company raked in $6.82 billion in revenue for Q3, exceeding consensus estimates by $247.24 million.
On November 30, Mizuho analyst Silvio Micheloto kept a ‘Buy’ rating on Occidental Petroleum Corporation (NYSE:OXY) stock, raising the price target to $50 from $48.
As of the third quarter, 60 hedge funds out of 867 in Insider Monkey’s database reported owning positions in Occidental Petroleum Corporation (NYSE:OXY). The combined value of these positions stood at $3.18 billion. This shows a bullish trend from last quarter where 57 hedge funds held stakes worth $3.62 billion in the company.
In addition to Alphabet Inc. (NASDAQ:GOOG), Meta Platforms, Inc. (NASDAQ:FB) and Amazon.com, Inc. (NASDAQ:AMZN), Occidental Petroleum Corporation (NYSE:OXY) is gaining the attention of elite hedge funds.
Smead Capital Management, an investment firm, recently published its Q3 investor letter. Here’s what the firm said about Occidental Petroleum Corporation (NYSE:OXY):
“Oil stocks dominated our winners for the quarter. We showed that we have unlimited ability to tempt fate by buying into Occidental Petroleum (OXY) this year after it was our biggest loser of 2020. It gained 16.64% during the third quarter.”
6. Kohl’s Corporation (NYSE:KSS)
Appaloosa Management’s Stake Value: $70.63 million
Appaloosa Management’s 13F Portfolio: 1.68%
Number of Hedge Fund Holders: 37
Kohl’s Corporation (NYSE:KSS) is another stock in which David Tepper’s Appaloosa Management upped its stake in the third quarter. According to regulatory data for the third quarter, Tepper owns 1,500,000 shares in the company, with a $70.63 million value that represents 1.68% of the fund’s overall portfolio. Over the last quarter, Appaloosa Management increased its stake in the company by 24%.
Kohl’s Corporation (NYSE:KSS) operates as a retail company in the United States, selling footwear, apparel, accessories and beauty products through its stores and website. The firm posted an EPS of $1.65 for the third quarter, which beat consensus estimates by $0.95.
37 hedge funds reported owning stakes in Kohl’s Corporation (NYSE:KSS) by the end of third quarter. The combined value of these positions stood at $951.33 million.
On November 19, research firm Jefferies maintained its ‘Buy’ rating on Kohl’s Corporation (NYSE:KSS) stock, increasing the price target to $75 from $73. The firm’s analyst Stephanie Wissink noted that elevated margins for the company have persisted, given its solid Q3 results and a strong start to the holiday season.
In addition to stocks like Alphabet Inc. (NASDAQ:GOOG), Meta Platforms, Inc. (NASDAQ:FB) and Amazon.com, Inc. (NASDAQ:AMZN), Kohl’s Corporation (NYSE:KSS) is a top stock on the radar of institutional investors.
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Disclosure: None. Billionaire David Tepper is Loading Up on These 10 Stocks is originally published on Insider Monkey.
