Tracking David Tepper's Appaloosa Management Portfolio - Q1 2021 Update

John Vincent profile picture
John Vincent
21.97K Followers

Summary

  • David Tepper’s 13F portfolio value increased from $6.69B to $6.96B this quarter.
  • Appaloosa added Chesapeake Energy, ViacomCBS, and Paysafe while reducing PG&E, Alibaba Group Holding, Twitter, Visa, Salesforce.com, Mastercard, Walt Disney, and PayPal.
  • Micron Technology, Amazon, Facebook, T-Mobile US and Alphabet are the five largest positions.
Lonely piggy bank sails in bad waters due to the crisis
Photo by fatido/iStock via Getty Images

This article is part of a series that provides an ongoing analysis of the changes made to David Tepper’s 13F portfolio on a quarterly basis. It is based on Appaloosa Management’s regulatory 13F Form filed on 5/17/2021. Please visit our Tracking David Tepper’s Appaloosa Management Portfolio series to get an idea of his investment philosophy and our previous update for the fund’s moves during Q4 2020.

This quarter, Tepper’s 13F portfolio value increased ~4% from $6.69B to $6.96B. The number of holdings increased from 44 to 58. The top five positions are Micron Technology, Amazon, Facebook, T-Mobile US, and Alphabet. They add up ~40% of the portfolio. To know more about Tepper's distress investing style, check out the book Distress Investing: Principles and Technique.

New Stakes:

Chesapeake Energy (CHK) & wts, ViacomCBS (VIAC), Paysafe Limited (PSFE), and D. R. Horton (DHI): These are medium-sized new stakes established this quarter. CHK is a ~2.9% of the portfolio position established this quarter as the company emerged from Chapter 11 bankruptcy. Appaloosa had senior debt that got converted. Shares started trading at ~$45 in mid-February and currently goes for ~$53. The 2.23% VIAC stake was purchased at prices between ~$36.60 and ~$100 and it is now at $43.15. PSFE is a 1.94% of the portfolio position established at prices between $13.50 and $19.24 and it is now below that range at $11.32. The 1.49% DHI stake was purchased at prices between ~$66 and ~$91 and it currently trades at $95.58.

Note: Paysafe started trading at the end of March following the close of their de-SPAC transaction with Foley Trasimene II (BFTU).

Mosaic Co. (MOS), Antero Resources (AR), iQIYI (IQ), APA Corporation (APA), E2open Parent Holdings (ETWO), BP plc (BP), Royal Dutch Shell (RDS.A) (RDS.B), Discovery, Inc. (DISCA), Altimeter Growth Corp. 2 (AGCB), CC Neuberger Principal Holdings II (PRPB), Liberty Media Acquisition (LMACA) Units, Baidu, Inc. (BIDU), SVF Investment (SVFA) Units, Hennessy Capital V (HCIC) Units, and Shopify (SHOP): These are minutely small (less than ~0.5% of the portfolio each) positions established this quarter.

Stake Disposals:

Enable Midstream (ENBL), Kinder Morgan (KMI), Magellan Midstream (MMP), Square, Inc. (SQ), Tenneco Inc. (TEN), and Wells Fargo (WFC): These very small (less than 0.6% of the portfolio each) stakes were disposed during the quarter.

Stake Increases:

Occidental Petroleum (OXY): OXY is a 2.31% of the portfolio stake established last quarter at prices between ~$8.90 and ~$21.30 and the stock currently trades well above that range at $26.07. There was a minor ~3% stake increase this quarter.

Qualcomm (QCOM) and SPDR Energy ETF (XLE): QCOM is a 1.43% of the portfolio position established last quarter at prices between ~$116 and ~$159. The stake was increased by ~25% this quarter at prices between ~$123 and ~$165. The stock currently trades at ~$134. The ~3% XLE stake was purchased last quarter at prices between $27.70 and $41.60. The position was increased by ~40% this quarter at prices between ~$38 and ~$54. The stock is now at $52.11.

Alliance Data Systems (ADS), Freeport McMoran (FCX), Goodyear Tire & Rubber (GT), SPDR S&P Oil & Gas ETF (XOP), and UnitedHealth (UNH): These small (less than ~1.6% of the portfolio each) stakes were increased during the quarter.

Stake Decreases:

Micron Technology (MU): MU is currently the largest position in the portfolio at 9.22%. The stake was built in Q3 2019 at prices between $39.50 and $51. There was a one-third stake increase in Q4 2019 at prices between $42 and $55.50. The next three quarters had also seen a ~50% stake increase at prices between ~$34.50 and ~$60. There was a one-third selling last quarter at prices between ~$46.50 and ~$73.50. The stock currently trades at ~$84. This quarter also saw a ~9% trimming.

Note: MU is a frequently traded stock in Tepper’s portfolio.

Amazon.com (AMZN): The large (top three) 8.26% AMZN stake was purchased in Q1 2019 at prices between $1500 and $1820. The next three quarters saw a ~75% stake increase at prices between $1690 and $2020. There was a ~50% selling from Q1-Q3 2020 at prices between ~$1677 and ~$3531. Last quarter saw an about turn: ~40% stake increase at prices between ~$3005 and ~$3444. The stock currently trades at ~$3230. There was a ~6% trimming this quarter.

Facebook, Inc. (FB): FB is a top-three 7.70% of the portfolio stake established in Q3 2016 at prices between $114 and $131 and increased by ~50% the following quarter at prices between $115 and $133. H2 2017 saw a stake doubling at prices between $148 and $183. The position has since wavered. Recent activity follows. Q1-Q3 2020 had seen a ~40% selling at prices between $146 and $304. Last quarter saw a ~14% stake increase while this quarter saw a ~10% trimming. The stock is currently at ~$333.

Note: FB has seen several previous roundtrips in the portfolio. The latest was a 3.28% of the portfolio position established in Q1 2016 at prices between $94 and $116 and sold the following quarter at prices between $109 and $121.

T-Mobile US (TMUS): TMUS is currently at 7.54% of the portfolio. A fairly large stake was purchased in Q4 2017 at prices between $55 and $64.50. The four quarters through Q1 2019 saw the position sold down at prices between $58 and $78. The position was rebuilt in Q2 2020 at prices between $82 and $110. Next quarter saw a ~30% selling at prices between $104 and $119. That was followed with a ~20% reduction over the last two quarters at prices between ~$110 and ~$135. The stock is now at ~$141. They are harvesting gains.

Note: 1.55M shares of the increase in Q2 2020 were through Rights exercise as the company issued a Rights offering for up to 19.75M shares in June. Also, a small part of the increase was due to the merger with Sprint (S) that closed in April. Appaloosa had a 6.4M share position in Sprint for which they received ~600K shares.

Alphabet Inc. (GOOG) (GOOGL): GOOG is a large (top five) 6.86% of the portfolio stake. It has been a significant presence in the portfolio since Q1 2012 and the original purchase was at prices between $290 and $325. The stake has wavered. Recent activity follows: Q1-Q3 2020 saw a ~40% reduction at prices between ~$1054 and ~$1717. There was a ~10% trimming this quarter. The stock currently trades at ~$2403.

PG&E Corp. (PCG): The 4.93% PCG stake was first purchased in Q4 2017 at prices between $44.50 and $70.75. Next year saw a combined ~500% stake increase at prices between $23 and $49. There was a ~260% stake increase in Q1 2019 at prices between $6.25 and $24.50 and that was followed with a ~28% selling next quarter at prices between $17 and $24. Q1 2020 also saw a one-third selling at prices between $7.25 and $18. That was followed with a ~20% reduction next quarter at prices between $8.87 and $12.53. Q3 2020 saw a huge stake built at prices between $8.60 and $10. There was a ~50% selling last quarter at prices between ~$9.50 and ~$12.85. That was followed with a one-third reduction this quarter at prices between ~$10.50 and $12.50. The stock is now at $9.92.

Alibaba Group Holding (BABA): The 3.71% BABA stake was established in Q3 2019 at prices between $154 and $183 and increased by ~85% next quarter at prices between $162 and $217. There was a ~50% stake increase in Q2 2020 at prices between $187 and $229 while next quarter there was a one-third reduction at prices between ~$216 and ~$298. Last two quarters have seen another ~50% selling at prices between ~$222 and ~$317. The stock currently trades at ~$213. They are harvesting gains.

Note: Alibaba is a frequently traded stock in Tepper’s portfolio. The most recent round-trip follow: a 5.23% BABA stake was established in Q1 2019 at prices between $131 and $187 and disposed next quarter at prices between $149 and $195.

HCA Healthcare (HCA): HCA is a 2.57% of the 13F portfolio position built in H1 2020 at prices between $82 and $118. The stock is now well above that range at ~$214. Q3 2020 saw a ~11% trimming while last quarter there was a ~7% increase. This quarter saw a ~5% trimming.

Energy Transfer LP (ET): Energy Transfer Partners merged with Energy Transfer Equity and the resulting entity was renamed Energy Transfer LP. The transaction closed last January, and terms were 1.28 shares of ETE for each ETP. Tepper held shares in both and those got converted to ET shares. There was a stake doubling in Q4 2019 at prices between $11 and $13. Next three quarters saw the stake more than doubled at prices between $4.55 and $13.75. The stock is now at ~$10 and the stake is at 2.52% of the portfolio. This quarter saw minor trimming.

Twitter Inc. (TWTR): TWTR is a 2.42% of the portfolio stake purchased in Q1 2020 at prices between $22 and $39 and the stock currently trades well above that range at ~$58. Q3 2020 saw a ~15% trimming while last quarter there was a marginal increase. This quarter saw a ~45% selling at prices between ~$45 and ~$78.

Microsoft (MSFT): The 1.56% MSFT stake was built in H1 2020 at prices between $152 and $232. Last quarter saw a ~80% stake increase at prices between ~$202 and ~$225. The stock currently trades at ~$249. There was a ~15% trimming this quarter.

Visa Inc. (V), Mastercard (MA), PayPal (PYPL), and Walt Disney (DIS): These four positions established in Q2 2020 saw substantial selling this quarter. The 1.26% Visa stake was established at prices between $152 and $200 and the stock currently trades at ~$227. Q3 2020 saw a ~20% selling at prices between ~$189 and ~$217. That was followed with a roughly one-third reduction this quarter at prices between ~$193 and ~$226. MA is a ~1% of the portfolio position purchased at prices between $229 and $313 and it is now at ~$362. There was a ~20% reduction in Q3 2020 at prices between ~$290 and ~$366. That was followed with a ~45% selling this quarter at prices between ~$315 and ~$384. The 0.61% PYPL stake was established at prices between $91 and $177 and it currently goes for ~$260. Q3 2020 saw a ~30% selling at prices between $170 and $211. That was followed with a ~70% selling over the last two quarters at prices between ~$180 and ~$305. DIS is a 0.91% position purchased at prices between $94 and $127 and it currently trades at ~$179. There was a ~25% reduction in Q3 2020 at prices between $112 and $136. That was followed with a ~60% selling over the last two quarters at prices between ~$118 and ~$202.

Note: Walt Disney is a frequently traded stock in Tepper’s portfolio.

Netflix Inc. (NFLX): The 0.81% NFLX stake was established in Q2 2020 at prices between ~$300 and ~$390. Last three quarters have seen a ~55% selling at prices between ~$467 and ~$586. The stock is now at ~$504.

Salesforce.com (CRM): CRM is a 1.17% of the portfolio position established in H1 2019 at prices between $124 and $193 and the stock currently trades at ~$226. Last quarter saw a ~25% stake increase at prices between ~$220 and ~$267 while this quarter there was similar selling at prices between ~$205 and ~$249.

Adobe Inc. (ADBE): ADBE is a ~1% of the portfolio position that saw a ~80% stake increase in Q3 2019 at prices between $273 and $311. Last five quarters had seen a zig-zag trading pattern with the net holding remaining steady at ~200K shares. There was a ~28% selling this quarter at prices between ~$421 and ~$502. The stock currently trades at ~$498.

ALPS Alerian MLP ETF (AMLP), CarMax, Inc. (KMX), EQT Corp. (EQT), Enterprise Products Partners (EPD), Emerson Electric (EMR), iShares MSCI South Korea Capped ETF (EWY), Kohl's Corp. (KSS), MPLX LP (MPLX), Macy's, Inc. (M), Sysco Corp. (SYY), and Western Midstream Partners (WES): These small (less than ~1.5% of the portfolio each) stakes were reduced during the quarter.

Kept Steady:

Dragoneer Growth Opportunities (DGNR): The minutely small 0.11% stake in DGNR was kept steady this quarter.

Note: Dragoneer announced a ~$7B EV SPAC merger with CCC, an auto-insurance/repair SaaS business.

The spreadsheet below highlights changes to Tepper’s 13F stock holdings in Q1 2021:

David Tepper - Appaloosa

Source: John Vincent. Data constructed from Appaloosa’s 13F filings for Q4 2020 and Q1 2021.

This article was written by

John Vincent profile picture
21.97K Followers
Focused on cloning strategies by analyzing 13F reports of a curated set of around fifty super-investors and generating Absolute Returns thru exploiting inefficiency, volatility, and momentum.

Disclosure: I am/we are long AGCB, AMZN, BABA, BP, DISCK, KMI, PSFE, SVFA, TWTR, WFC. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: I am long PSFE & DGNR warrants.

Recommended For You

Comments (7)

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.