Billionare Tepper Is Betting On Transportation Industry: General Motors Company (GM), HCA Holdings Inc (HCA) and Priceline Group Inc (PCLN)

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David Tepper’s Appaloosa Management has disclosed its equity portfolio for the reporting period ended March 31 in a new 13F filing with the U.S. Securities and Exchange Commission. Appaloosa has around $20 billion in assets under management, while the value of its equity portfolio stands at around $5.70 billion as of the end of March and its top picks include General Motors Company (NYSE:GM), HCA Holdings Inc (NYSE:HCA), Priceline Group Inc (NASDAQ:PCLN), Goodyear Tire & Rubber Co (NASDAQ:GT) and United Continental Holdings Inc (NYSE:UAL).

David Tepper

David Tepper and Jack Walton founded Appaloosa Management in 1993. David Tepper’s net worth is $10.4 billion and he is the major investor of the fund. Appaloosa Management is only one of the many hedge funds which manage billions of dollars. To manage such big amounts, hedge funds need to spend huge resource budgets and employ best investment experts. Hedge funds charge high commission fees, including approximately 2% fixed fee over total assets and approximately 20% performance fee over the returns of the fund. By following Insider Monkey, individual investors also can invest the stock picks of hedge funds without paying any commission. At Insider Monkey we are closely following more than 700 hedge funds and we supply their stock holdings to our visitors free of charge. Furthermore, we have developed Small-Cap Hedge Fund Strategy on August 2012 to benefit from hedge funds’ best stock picks. This strategy has returned 139% since it was first launched in August 2012, beating the S&P 500 ETF (SPY) by over 80 percentage points (read more details here).

Moving back to Tepper’s latest 13F, we will first discuss his top holding General Motors Company (NYSE:GM), in which he increased his position to 15.30 million shares from 14.68 million shares held previously. The position was valued at $573.61 million at the end of the first quarter. General Motors Company (NYSE:GM)’s net income is on a downward trend. Earnings per share amounted to $4.58 in 2011, $2.92 in 2012, $2.38 in 2013 and $1.65 in 2014. However, analysts are expecting that EPS will grow to $4.49 in 2015 and $5.10 in 2016. The mid-size sedan segment has the largest sales volume in the United States. In this segment, GM has Chevrolet Malibu, which is losing market share with a decline in the sales to 188,519 in 2014 from 200,594 a year earlier. Stronger peers Toyota Camry and Honda Accord, which have yearly sales of approximately 400,000 units, increased their sales by 4.93% and 5.92% respectively between 2013 and 2014. GM’s largest investment for the coming few years is electric vehicles. GM’s goal is to sell 500,000 electric vehicles until the end of 2017. Although the company managed to sell 180,000 of these vehicles so far, it is having some difficulties to deliver this goal due to decline in gas prices projections and high level of competition from Tesla Motors Inc (NASDAQ:TSLA), which plans to  start mass production soon, and other producers. Warren Buffett’s Berkshire Hathaway has the largest position in General Motors Company (NYSE:GM) with 41 million shares valued at $1.54 billion as of the end of the first quarter of 2015. In addition, David Einhorn’s Greenlight Capital has initiated a new position of 9.47 million shares valued at $355.05 million during the first quarter of 2015. Greenlight previously held shares of GM, and no re-opened the position, saying that “2015 should be a better year for GM” in its letter to investors for the first quarter.

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