Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Was David Tepper Really 40% Right on Banks?

Bloomberg had an article today about the sub-par performance of financial stocks in 2011. Here is what attracted our attention in the article:

APPALOOSA MANAGEMENT LP

David Tepper, founder of hedge fund Appaloosa Management LP, used his investments in the largest banks that year to drive a 132 percent return in 2009, making his fund the best performer among those with more than $1 billion in assets.

This time around, Tepper, 53, isn’t as bullish. Appaloosa cut its stakes in five banks — Citigroup, Wells Fargo, Bank of America, Fifth Third Bancorp and SunTrust Banks Inc. — in the first quarter by an average of 43 percent.

“I wish it was 80 percent, because they’ve been absolute crap since we sold them,” said Tepper, whose fund is based in Short Hills, New Jersey. “So we were 40 percent right.”

Was David Tepper really 40% right on banks?

Bloomberg’s article has some missing information about David Tepper‘s transactions. Tepper’s moves in financials give a better picture than what he did with just those 5 stocks mentioned. During the first quarter David Tepper sold his entire stakes in JP Morgan Chase (JPM), Wells Fargo’s preferred conv. shares (WFC) (this was worth $336 Million at the end of December), BB&T (BBT), Capital One Financial (COF), Flagstar Bancorp (FBC), and some classes of RBS. On the other hand he initiated a brand new $67 Million position in Metlife (MET). Here is the complete list of his activity in financial shares:

CompanyName Ticker Value (Mar 31st) Shares (Mar 31st) Activity Value (Dec 31st) Shares (Dec 31st)
B B & T CORP BBT Sold Out 10975 417441
CAPITAL ONE FINANCIAL COF Sold Out 43667 1026009
CAPITAL ONE FINANCIAL COF Sold Out 2043 126759
FLAGSTAR BANCORP I FBC Sold Out 4972 3050000
GRAMERCY CAPITAL GKK Sold Out 914 395791
JPMORGAN CHASE & CO JPM Sold Out 22937 540704
ROYAL BANK SCOTLAND RBS Sold Out 700 32223
ROYAL BANK SCOTLAND RBS Sold Out 1240 58708
STRATEGIC HOTELS BEE Sold Out 300 56738
WELLS FARGO & CO NEW WFC Sold Out 335667 335482
WILLIS GROUP HOLDINGS WSH Sold Out 13532 390770
NEWCASTLE INVESTMENT NCT 3299 546192 -77% 16249 2425156
SUNTRUST BANKS INC STI 42132 1460899 -65% 123738 4193090
FIFTH THIRD BANCORP FITB 45887 3306006 -65% 138946 9465006
WELLS FARGO & CO NEW WFC 98002 3091560 -59% 231188 7460100
CITIGROUP INC C 338647 76616856 -35% 555781 117501357
BANK OF AMERICA CORP BAC 229487 17215849 -31% 334401 25067544
HARTFORD FINANCIAL HIG 25500 946917 -28% 34623 1307035
BANCO SANTANDER S A STD 6917 590206 -5% 6644 623810
E TRADE FINANCIAL ETFC 66630 43944000 -5% 71814 46257000
HARTFORD FINANCIAL HIG 25254 1377000 0% 24970 1383400
ROYAL BANK SCOTLAND RBS 39909 2028914 0% 32787 2028914
ROYAL BANK SCOTLAND RBS 35054 2001914 0% 29708 2001914
ROYAL BANK SCOTLAND RBS 81 4889 0% 71 4889
ROYAL BANK SCOTLAND RBS 28891 1609519 0% 24191 1609519
ROYAL BANK SCOTLAND RBS 40 2400 0% 35 2400
ROYAL BANK SCOTLAND RBS 57163 3360579 0% 48896 3360579
ROYAL BANK SCOTLAND RBS 35377 1861961 0% 32454 1861961
ROYAL BANK SCOTLAND RBS 26858 1560596 0% 22894 1560596
METLIFE INC MET 67095 1500000 New

David Tepper‘s total position in financial shares was $2.167 Billion at the end of 2010. He had $1.172 Billion invested in financial shares at the end of March. Financial stocks didn’t lose that much during the first quarter (the losses intensified during the past couple of months), so we can say that David Tepper was more like 46% right about financial stocks during the first quarter.

Loading...