In this article, we discuss the 5 stocks David Tepper is buying for the rest of 2022. To read the details of David Tepper’s life, achievements, investment philosophy, and information about Appaloosa Management, go directly to David Tepper Initiated Buying These 10 Stocks for the Rest of 2022.
5. HCA Healthcare, Inc. (NYSE:HCA)
Number of Hedge Fund Holders: 63
HCA Healthcare, Inc. (NYSE:HCA) is an American healthcare facilities company. The company operates over 180 hospitals and 2,000 sites of care across the U.K and the USA. On July 22, the company declared a $0.56 quarterly dividend, payable on September 30 to the shareholders of record on September 16.
Compared to other similar businesses, HCA Healthcare, Inc. (NYSE:HCA) has shown consistent growth in the past. Since 2010, the company has reported revenue growth of approximately 7% and an EBITDA growth of 8%. The company has also actively focused on shareholder returns, repurchasing over 150 million shares since 2013. The growth is mainly owed to its high ROIC, which stands at around 20% at the time of writing.
According to Insider Monkey’s Q2 database, 62 hedge funds had a stake in HCA Healthcare, Inc. (NYSE:HCA). The most significant stake was owned by Harris Associates, with over 7.7 million shares valued at $1.3 billion. Appaloosa Management added the company to its portfolio with 75,000 shares in Q2 2022 worth $12.605 million, representing 0.79% of the fund’s portfolio.
Here is what First Eagle Investments had to say about HCA Healthcare, Inc. (NYSE:HCA) in its Q2 2022 investor letter:
“HCA Healthcare owns and operates 182 hospitals and approximately 2,300 ambulatory sites of care in the US and UK. Although admission volumes have recently increased, the company lowered its sales and earnings guidance for 2022 due to concerns about rising labor costs.
The ongoing shortage of healthcare workers in general, and nurses in particular, has forced operators like HCA to fill many roles with temporary contract employees, which is more expensive than hiring full-time workers. We believe these disruptions are temporary, and we maintain our positive opinion on the ability of HCA’s management to be effective stewards of both the balance sheet and business operations.”
4. Aptiv PLC (NYSE:APTV)
Number of Hedge Fund Holders: 43
Aptiv PLC (NYSE:APTV) is an Irish-American automotive technology company based in Dublin, Ireland. Appaloosa Management made the company a part of its portfolio in the second quarter of 2022 with 250,000 shares valued at $22.26 million, making up 1.39% of the fund’s portfolio.
On September 12, Aptiv PLC (NYSE:APTV) announced the acquisition of an 85% stake in Intercable Automotive Solutions for €595 million, subject to customary post-closing adjustments. The Mutschlechner family was the founding family of Intercable Automotive Solutions and will keep a 15% stake in the business. The company is expected to generate €250 million in revenue by the end of 2022 and will also be significant to Aptiv PLC (NYSE:APTV)’s 2023 EPS.
On September 9, BofA analyst John Murphy maintained a Buy rating on Aptiv PLC (NYSE:APTV) shares and lowered the price target to $158 from $165. The analyst added that the supply chain constraints will likely affect 2023 automotive sale volumes and the macro environment has become a “greater risk.” The analyst believes that the peak in auto demand will likely hit in 2028 instead of 2025.
Here is what ClearBridge Investments has to say about Aptiv PLC (NYSE:APTV) in its Q1 2022 investor letter:
“The acceleration in electrification of transport should support electric vehicle (EV)-related stocks like Aptiv (NYSE:APTV), which came under pressure in the quarter on concerns the auto cycle is past its peak. Aptiv provides a range of solutions for the auto industry, including autonomous driving technologies, safety technologies, components, and wiring. The large exposure of APTV to EVs should lead to long-term value as EVs continue their growth, boosted by their relative attractiveness as prices at the pump hit near-historic highs.”
3. Salesforce, Inc. (NYSE:CRM)
Number of Hedge Fund Holders: 116
Salesforce, Inc. (NYSE:CRM) is a California-based cloud computing, enterprise software, and consulting company. As of Q2 2022, 116 hedge funds held bullish positions in the company, compared to 114 in the previous quarter.
Salesforce, Inc. (NYSE:CRM) holds a competitive advantage in the customer relationship management software market. At the end of 2021, the company had 41.4% of the segment’s market share, with its closest competitor, Microsoft Corporation (NASDAQ:MSFT), holding an 11.8% market share. The company was recently named the number one CRM company for the 9th year in a row. Furthermore, the company has shown consistent growth and revenue stability over the past few years. In 2020, the company generated $16 billion in revenue and expects to generate $31 billion in 2023. The stability comes from its annual subscription model, which accounts for 90% of the revenues generated by the company.
Appaloosa Management added 200,000 shares of Salesforce, Inc. (NYSE:CRM) worth $33 million to its portfolio in Q2 2022. The company represents a 2.07% concentration in the firm.
Here is what Vulcan Value Partners had to say about Salesforce, Inc. (NYSE:CRM) in its Q1 2022 investor letter:
“Salesforce.com Inc. is the dominant provider of customer relationship management software and technology. Salesforce has high retention rates, pricing power, high free cash flow, and a competitive moat. The company continues to execute well. Margins decreased slightly during the fourth quarter but continue to be on path for material expansion over the long term. Salesforce is seeing increased spending as employees are returning to the office, and we believe the global pandemic has only improved its prospects.”
2. Kohl’s Corporation (NYSE:KSS)
Number of Hedge Fund Holders: 40
Kohl’s Corporation (NYSE:KSS) is an American department store and retail chain corporation. The company operates 1,162 department stores across the US, making it the country’s largest department store chain.
On August 19, Deutsche Bank analyst Gabriella Carbone reaffirmed a Buy rating on Kohl’s Corporation (NYSE:KSS) and lowered her price target to $36 from $37. The analyst noted that even though the quarterly results were in line with Wall Street estimates, they were below Kohl’s Corporation (NYSE:KSS)’s expectations as the middle-income customer becomes “more cost-conscious” due to inflation. She added that people are spending less and making fewer shopping trips.
Appaloosa Management increased its holdings in Kohl’s Corporation (NYSE:KSS) by 168% to 1.875 million shares, valued at $66.919 million, covering 4.2% of the fund’s portfolio at the end of Q2 2022.
1. Constellation Energy Corporation (NASDAQ:CEG)
Number of Hedge Fund Holders: 43
Constellation Energy Corporation (NASDAQ:CEG) sells electricity, natural gas, renewable energy, and other energy-related products and services in the United States. The company was incorporated in 2021 and has the capacity of generating 32,400 megawatts through nuclear, wind, solar, natural gas, and hydroelectric assets.
Constellation Energy Corporation (NASDAQ:CEG) started paying dividends in February 2022. As of September 12, the company has a dividend yield of 0.64%, and its latest quarterly dividend was $0.141. The dividend was paid on September 9 to the shareholders of record on August 15.
As of Q 2022, 43 hedge funds had a stake in Constellation Energy Corporation (NASDAQ:CEG). The most prominent position was held by Southpoint Capital Advisors, with 3 million shares worth $171.78 million. Constellation Energy Corporation (NASDAQ:CEG) was a new addition to Appaloosa Management in the second quarter of 2022. The fund owned 2.7 million shares worth $154.6 million, making up 9.7% of the fund’s portfolio.
You can also take a peek at 10 Stocks to Buy According to Francis Chou’s Chou Associates Management and 10 Stocks to Buy According to William Von Mueffling’s Cantillon Capital Management.
