Below are billionaire David Tepper’s top 5 stock holdings. For a comprehensive list see Billionaire David Tepper’s Top 10 Stock Holdings.
5. Facebook (NASDAQ: FB)
The shares of social media giant Facebook (NASDAQ: FB) performed well during the pandemic year due to social distancing policies. Appaloosa Management has been holding Facebook’s position since 2016 and it appears that the hedge fund has benefited from its investment. This is because shares of Facebook grew 27% in the last twelve months, extending the five years gains to 186%. It is the fifth-largest stock holding of David Tepper’s hedge fund, accounting for 8.18% of the overall portfolio.
A global asset management firm Oakmark Funds, which returned 24.44% for the fourth quarter, highlighted few stocks including Facebook in an investor’s letter. Here is what Oakmark stated.
“Facebook currently sells at approximately $273 per share or 26 times consensus 2021 earnings estimates of $10.47 per share. That might not seem excessive for such a high-quality company, but it certainly would not meet our value criteria if that was the whole story. But it’s not. For starters, Facebook is expected to have $29 per share of cash at the end of 2021, and, as we all know, cash currently earns almost nothing. Subtracting cash from the stock price, we are only paying $244 per share for the business or 23 times earnings.
There is more. Analysts believe that WhatsApp, a popular messaging service owned by Facebook, reports a GAAP loss, yet its subscribers have quadrupled since Facebook acquired the service in 2014. If WhatsApp‘s current subscriber base was valued at the same price-per-subscriber as in 2014, it would now be worth $31 per Facebook share. Using analyst forecasts for revenue several years out, that $31 per share seems reasonable as it roughly matches Facebook’s current price-to-sales multiple.”