David Tepper (Trades, Portfolio), founder of Appaloosa LP, disclosed in a regulatory portfolio update filing that his firm’s top-five trades during the fourth quarter of 2022 included reductions to its positions in Meta Platforms Inc. (META, Financial) and Constellation Energy Corp. (CEG, Financial), new holdings in The Walt Disney Co. (DIS, Financial) and Caesars Entertainment Inc. (CZR, Financial) and a boost to its holding in HCA Healthcare Inc. (HCA, Financial).
Tepper has earned international reputation for producing high returns among Wall Street investors. The guru’s Miami Beach, Florida-based firm invests in public equity and fixed income markets around the globe. The firm specializes in distressed debt investing, which include investments in the equity and debt of distressed companies, bonds, exchange warrants, options, futures, notes and junk bonds.
Investors should be aware 13F filings do not give a complete picture of a firm’s holdings as the reports only include its positions in U.S. stocks and American depository receipts, but they can still provide valuable information. Further, the reports only reflect trades and holdings as of the most-recent portfolio filing date, which may or may not be held by the reporting firm today or even when this article was published.
Meta Platforms
Appaloosa sold 300,000 shares of Meta Platforms (META, Financial), slicing 34.29% of the position and 2.99% of its equity portfolio.
Shares of Meta averaged $117.43 during the fourth quarter; the stock is significantly undervalued based on its price-to-GF-Value ratio of 0.46 as of Wednesday.
The Menlo Park, California-based social media giant has a GF Score of 89 out of 100 based on a growth rank of 10 out of 10, a profitability rank of 9 out of 10, a financial strength rank of 7 out of 10 and a rank of 4 out of 10 for GF Value and momentum.
Meta’s profitability ranks 9 out of 10 on several positive investing signs, which include a three-star business predictability rank and an operating margin that outperforms approximately 86% of global competitors.
Constellation Energy
The firm sold 231,271 shares of Constellation Energy (CEG, Financial), trimming 8.79% of the position and 1.41% of its equity portfolio. Shares averaged $89.96 during the fourth quarter.
The Baltimore-based energy solutions company has a GF Score of 23 out of 100 based on a financial strength rank of 5 out of 10 and a profitability rank of 3 out of 10. Despite this, the stock does not have enough data to compute ranks for growth, GF Value and momentum and thus the GF Score may give an incomplete picture of the stock’s potential.
Walt Disney
Appaloosa invested in 300,000 shares of Walt Disney (DIS, Financial), giving the position 1.93% of equity portfolio space.
Shares of Walt Disney averaged $95.65 during the fourth quarter; the stock is significantly undervalued based on its price-to-GF-Value ratio of 0.69 as of Thursday.
The Burbank, California-based diversified media giant has a GF Score of 81 out of 100 based on a GF Value rank of 10 out of 10, a profitability rank of 8 out of 10 and a rank of 5 out of 10 for financial strength, momentum and growth.
Walt Disney’s profitability ranks 8 out of 10 on the back of operating margins outperforming more than 60% of global competitors and having nine years of positive income over the past 10 years.
Caesars Entertainment
The firm purchased 425,000 shares of Caesars Entertainment (CZR, Financial), giving the position 1.31% of equity portfolio space. Shares averaged $44.53 during the fourth quarter.
GuruFocus’ GF Value Line labeled the Las Vegas-based casino resorts company a possible value trap based on its low price-to-GF-Value ratio of 0.53 as of Thursday and low financial strength rank of 3 out of 10.
The company’s low financial strength rank stems from several warning signs, which include a low Altman Z-score of 0.52 and an interest coverage ratio that is less than 1 and underperforms more than 90% of global competitors.
Despite poor financial strength, Caesars Entertainment has a GF Score of 82 out of 100, driven by a growth rank of 9 out of 10, a momentum rank of 8 out of 10, a profitability rank of 7 out of 10 and a GF Value rank of 4 out of 10.
HCA Healthcare
The firm added 107,500 shares of HCA Healthcare (HCA, Financial), boosting the position by 143.33% and its equity portfolio by 1.91%.
Shares of HCA Healthcare averaged $223.97 during the fourth quarter; the stock is fairly valued based on its price-to-GF-Value ratio of 1.06 as of Thursday.
The Nashville, Tennessee-based health care company has a GF Score of 93 out of 100 based on a rank of 10 out of 10 for profitability and growth, a momentum rank of 9 out of 10, a GF Value rank of 5 out of 10 and a financial strength rank of 4 out of 10.
HCA Healthcare’s profitability ranks 10 out of 10 on several positive investing signs, which include a five-star business predictability rank and an operating margin that has increased by approximately 2.4% per year on average over the past five years and is outperforming approximately 79% of global competitors.
