Tracking David Tepper's Appaloosa Management Portfolio - Q4 2021 Update

Summary

• David Tepper’s 13F portfolio value decreased from $4.20B to $3.89B this quarter.
• Appaloosa added General Motors and increased Macy's during the quarter.
• Alphabet, Meta Platforms, Macy's, Micron Technology, and Amazon.com are the five largest positions.

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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 2/14/2022. 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 Q3 2021.

This quarter, Tepper's 13F portfolio value decreased ~7% from $4.20B to $3.89B. The number of holdings decreased from 48 to 44. The top five positions are Alphabet, Meta Platforms, Macy's, Micron Technology, and Amazon.com. They add up to ~39% of the portfolio. To know more about Tepper's distress investing style, check out the book Distress Investing: Principles and Technique.

New Stakes:

General Motors (GM): GM is a 3.39% of the portfolio stake established this quarter at prices between ~$53 and ~$65 and the stock currently trades at $44.90.

DICK'S Sporting Goods (DKS), Foot Locker (FL), Gap Inc. (GPS), and Nordstrom Inc. (JWN): These are very small (less than ~1% of the portfolio each) positions established during the quarter.

Stake Disposals:

Alibaba Group Holding (BABA): The 1.85% 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 four quarters have seen another ~75% selling at prices between ~$145 and ~$310. The remainder stake was sold this quarter at prices between ~$112 and ~$178. The stock currently trades at ~$102.

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 was a 2.24% of the 13F portfolio position built in H1 2020 at prices between $82 and $118. Q3 2020 saw a ~11% trimming while next quarter there was a ~7% increase. There was a ~60% reduction in Q2 2021 at prices between ~$186 and ~$216. The disposal this quarter was at prices between ~$226 and ~$260. The stock is now at $264.

Paysafe Limited (PSFE): PSFE was a 1.57% of the portfolio position established in Q1 2021 at prices between $13.50 and $19.24. The position was sold this quarter at prices between ~$3.40 and ~$8.30. The stock currently trades at $3.17.

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

Visa Inc. (V) and Mastercard (MA): The 1.39% Visa stake was established in Q2 2020 at prices between $152 and $200. Next quarter saw a ~20% selling at prices between ~$189 and ~$217. That was followed with a roughly ~85% reduction over the last three quarters at prices between ~$193 and ~$251. The disposal this quarter was at prices between ~$190 and ~$234. The stock is now at ~$207. MA was a ~1% of the portfolio position purchased in Q2 2020 at prices between $229 and $313. There was a ~20% reduction next quarter at prices between ~$290 and ~$366. Last three quarters have seen another two-thirds selling at prices between ~$315 and ~$396. The elimination this quarter at prices between ~$306 and ~$370. The stock currently trades at ~$341.

Twitter, Inc. (TWTR): TWTR was a 1.78% of the portfolio stake purchased in Q1 2020 at prices between $22 and $39. Q3 2020 saw a ~15% trimming while next quarter there was a marginal increase. Last four quarters saw the disposal at prices between ~$42 and ~$77. The stock is now at $33.49.

QUALCOMM (QCOM): QCOM was a 1.51% of the portfolio position established in Q4 2020 at prices between ~$116 and ~$159. The stake was increased by ~25% next quarter at prices between ~$123 and ~$165. Q2 2021 saw a one-third selling at prices between ~$125 and ~$143. The remaining position was sold this quarter at prices between ~$123 and ~$189. The stock currently trades at ~$165.

Dragoneer Growth 2 (DGNS) (CVT), E2Open Parent Holdings (ETWO), Ovintiv Inc. (OVV), The Beachbody Company (BODY), and Walmart Inc. (WMT): These very small positions (less than ~1% of the portfolio each) established last quarter were disposed this quarter.

Stake Increases:

Macy's Inc. (M): The 6.80% Macy's stake was almost doubled last quarter at prices between ~$16 and ~$25. There was a ~45% stake increase this quarter at prices between ~$22 and ~$37. The stock is now at $26.03.

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 again doubled at prices between $4.55 and $13.75 while Q2 2021 saw a ~45% selling at prices between ~$7.70 and ~$11.35. There was a ~23% stake increase this quarter at prices between ~$8.15 and ~$10.20. The stock is now at $10.37, and the stake is at 2.62% of the portfolio.

EQT Corp. (EQT): EQT is a 2.74% of the portfolio position built over the last two quarters at prices between ~$16 and ~$23 and the stock is now at $24.85.

Mosaic Co. (MOS): MOS is a 2.43% of the portfolio stake built in H1 2021 at prices between ~$23.50 and ~$37.50 and it is now at $55.66. Last two quarters have seen only minor adjustments.

Kohl's Corp. (KSS): The 2.10% of the portfolio saw a ~35% stake increase over the last two quarters at prices between ~$44 and ~$63. The stock currently trades at ~$59.

Stake Decreases:

Alphabet Inc. (GOOG) (GOOGL): GOOG is currently the largest 13F position at ~10% of the portfolio. 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. That was followed with a ~47% reduction over the last four quarters at prices between ~$1736 and ~$3014. The stock currently trades at ~$2686.

Meta Platforms (FB), previously Facebook: FB is a top-three 9.52% 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. Q4 2020 saw a ~14% stake increase while the last four quarters saw a ~45% selling at prices between ~$251 and ~$382. The stock is currently at ~$203.

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.

Occidental Petroleum (OXY): OXY is a 4.92% of the portfolio stake established in Q4 2020 at prices between ~$8.90 and ~$21.30 and the stock currently trades well above that range at $47.75. H2 2021 saw a roughly one-third selling at prices between ~$23.20 and ~$32.90 while last quarter there was a ~15% stake increase at prices between ~$22 and $33. This quarter saw marginal trimming.

PG&E Corp. (PCG): The 4.13% 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. The position has since wavered. Recent activity follows. Q3 2020 saw a huge stake built at prices between $8.60 and $10 while the last five quarters saw a ~85% selling at prices between ~$8.30 and ~$12.65. The stock is now at ~$11.43.

T-Mobile US (TMUS): TMUS is currently at 3.81% 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 ~52% reduction over the three quarters through Q2 2021 at prices between ~$110 and ~$147. That was followed with a similar selling this quarter at prices between ~$107 and ~$128. The stock is now at ~$124.

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 that closed in April. Appaloosa had a 6.4M share position in Sprint for which they received ~600K shares.

SPDR Energy ETF (XLE): The ~3% XLE stake was purchased in Q4 2020 at prices between $27.70 and $41.60. The position was increased by ~40% next quarter at prices between ~$38 and ~$54 while Q2 2021 saw similar selling at prices between ~$47 and ~$56. The stock is now at ~$73. Last two quarters have also seen minor trimming.

D.R. Horton (DHI) and Pulte Group (PHM): The ~3% DHI stake was purchased in Q1 2021 at prices between ~$66 and ~$91 and it currently trades at $86.51. The 2.13% PHM position was established in Q2 2021 at prices between ~$53 and ~$62 and it is now at $49.25. Last two quarters have seen only minor adjustments.

Goodyear Tire & Rubber (GT), and SPDR S&P Oil & Gas ETF (XOP): GT is a 2.82% of the portfolio position that saw a roughly two-thirds stake increase last quarter at prices between $14.50 and $19.25. The stock currently trades at $14.57. XOP is a 2.47% position that saw a one-third increase last quarter at prices between ~$73 and ~$99. The stock currently goes for ~$120. This quarter saw minor trimming in both positions.

Freeport-McMoRan (FCX): The ~2% FCX position was purchased over the three quarters through Q2 2021 at prices between ~$15 and ~$45. The stock is now at ~$49. Both stakes saw minor trimming over the last two quarters.

Chesapeake Energy (CHK) & wts,: CHK is a 2.24% of the portfolio position established in Q1 2021 as the company emerged from Chapter 11 bankruptcy. Appaloosa had senior debt that got converted. Shares started trading at ~$45 in February 2021 and currently goes for ~$80. The commons portion of the stake was reduced by ~85% in Q2 2021 at prices between ~$43 and ~$56. Last quarter saw another ~20% reduction at prices between ~$49 and ~$63. There was minor trimming this quarter.

Alight, Inc. (ALIT): ALIT is a 1.19% of the portfolio stake purchased last quarter at prices between ~$8.50 and ~$13 and the stock currently trades at $9.83. There was a ~45% selling this quarter at prices between ~$10 and ~$12.

Note: Bloomberg reported that Alight had held merger talks with Voya Financial (VOYA) in August. Alight went public last July through a De-SPAC merger with Foley Trasimene Acquisition.

Uber Technologies (UBER): UBER is now a minutely small 0.24% of the portfolio position. The stake was purchased in Q2 2021 at prices between ~$44 and ~$61. This quarter saw a ~90% reduction at prices between ~$36 and ~$48. The stock currently trades at $31.72.

Alliance Data Systems (ADS): The very small 0.28% stake in ADS saw a ~45% selling this quarter.

Kept Steady:

Micron Technology (MU): MU is currently a 6.59% of the portfolio position. 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 ~78% selling over the last four quarters at prices between ~$46.50 and ~$96. The stock currently trades at ~$89.

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

Amazon.com (AMZN): The large (top five) ~6% 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. Q4 2020 saw an about turn: ~40% stake increase at prices between ~$3005 and ~$3444. There was a two-thirds selling over the last three quarters at prices between ~$2952 and ~$3731. The stock currently trades at ~$2958.

Microsoft (MSFT): The 2.57% MSFT stake was built in H1 2020 at prices between $152 and $232. Q4 2020 saw a ~80% stake increase at prices between ~$202 and ~$225. The two quarters through Q2 2021 had seen a ~45% selling at prices between ~$212 and ~$272. The stock currently trades at ~$296.

Antero Resources (AR), APA Corporation (APA), ALPS Alerian MLP ETF (AMLP), Altimeter Growth 2 (AGCB), CarMax Inc. (KMX), Enterprise Products Partners (EPD), iShares MSCI South Korea ETF (EWY), MPLX LP (MPLX), Sysco Corp. (SYY), TCV Acquisition (TCVA), UnitedHealth (UNH), and Western Midstream Partners (WES): These small (less than ~2.5% of the portfolio each) stakes were kept steady this quarter.

The spreadsheet below highlights changes to Tepper's 13F stock holdings in Q4 2021:

David Tepper - Appaloosa's Q4 2021 13F Report Q/Q Comparison (John Vincent (author))

Analyst’s Disclosure: I/we have a beneficial long position in the shares of AGCB, AMZN, FB, GOOGL, PSFE, TWTR either through stock ownership, options, or other derivatives. 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.