Appaloosa LP, the firm founded by David Tepper (Trades, Portfolio), disclosed in a regulatory filing that its top buys during the first quarter included a boost to its holding of Uber Technologies Inc. (UBER, Financial) and five new positions: ARK Innovation ETF (ARKK, Financial), FedEx Corp. (FDX, Financial), Nvidia Corp. (NVDA, Financial), Tesla Inc. (TSLA, Financial) and Match Group (MTCH, Financial).
Tepper started investing when he was a young boy watching his father trade stocks in Pittsburgh. The guru 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 securities around the globe, emphasizing investments in distressed debt, convertible bonds and junk bonds.
As of March, the firm’s $1.89 billion 13F equity portfolio contains 29 stocks with a quarterly turnover ratio of 23%. The top four sectors in terms of weight are communication services, consumer cyclical, technology and energy, representing 22.08%, 19.73%, 19.27% and 15.96% of the equity portfolio.
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.
Uber Technologies
Appaloosa purchased 4.77 million shares of Uber Technologies (UBER, Financial), expanding the position by 389.8% and its equity portfolio by 8%. Shares averaged $31.72 during the first quarter.
The transaction elevated Uber to the guru’s third-largest holding with a weight of 10.05%.
GuruFocus’ GF Value Line labeled the San Francisco-based rideshare company a possible value trap based on the company’s low price-to-GF Value ratio of 0.50 as of Wednesday and poor ranks for financial strength and profitability.
The company’s financial strength and profitability rank just 4 out of 10 on several warning signs, which include a low Altman Z-score of 1.31, a debt-to-equity ratio that underperforms approximately 90% of global competitors and a gross profit margin that has declined by approximately 4.3% per year on average over the past five years.
Based on the component ranks, which include a momentum rank of 10 out of 10, a GF Value rank of 8 out of 10 and a growth rank of 6 out of 10, Uber received a GF Score of 75 out of 100.
Other gurus with holdings in Uber include Ken Fisher (Trades, Portfolio)’s Fisher Investments and the Harbor Capital Appreciation Fund (Trades, Portfolio).
ARK Innovation
The firm invested in 500,000 shares of ARK Innovation (ARKK, Financial), giving the position 1.07% equity portfolio weight. Shares averaged $38.32 during the first quarter.
Managed by Catherine Wood (Trades, Portfolio), the exchange-traded fund seeks long-term capital appreciation by investing in domestic and foreign equity securities that can benefit from disruptive innovation. Key categories include DNA technology, genomic revolution, automation, robotics, energy storage, artificial intelligence and fintech innovation. As of Jan. 31, the fund's top four sectors in terms of weight are technology, health care, communication services and consumer cyclical.
FedEx
Appaloosa purchased 350,000 shares of FedEx (FDX, Financial), giving the position 4.22% equity portfolio weight. Shares averaged $203.04 during the first quarter; the stock is modestly undervalued based on its price-to-GF Value ratio of 0.88 as of Wednesday.
The Memphis, Tennessee-based logistics giant has a GF Score of 92 out of 100 based on a rank of 10 out of 10 for growth and momentum, a profitability rank of 8 out of 10, a GF Value rank of 6 out of 10 and a financial strength rank of 5 out of 10.
FedEx’s high growth rank is driven by several positive investing signs, which include a 4.5-star business predictability rank and three-year earnings and free cash flow growth rates outperforming more than 90% of global competitors.
Other gurus with holdings in FedEx include Dodge & Cox and PRIMECAP Management (Trades, Portfolio).
Nvidia
The firm purchased 150,000 shares of Nvidia (NVDA, Financial), giving the position 2.20% equity portfolio weight. Shares averaged $216.41 during the first quarter; the stock is modestly overvalued based on its price-to-GF Value ratio of 1.22 as of Wednesday.
The Santa Clara, California-based chipmaker 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 financial strength rank of 7 out of 10 and a GF Value rank of 3 out of 10.
Nvidia’s high growth rank is driven by a four-star business predictability rank and a three-year revenue growth rate that outperforms approximately 88% of global competitors.
Nvidia is a member of GuruFocus’ GF Score Less Than 100 Top 25 Companies model portfolio. The stock has gained approximately 105.37% year to date and 52.17% since being added to the model portfolio on April 28, 2022.
The GF Score Less Than 100 Top 25 Companies model portfolio has gained approximately 12.53% year to date, outperforming the Standard & Poor’s 500 index's return of 7.04%.
Tesla
Appaloosa invested in 150,000 shares of Tesla (TSLA, Financial), giving the position 1.64% equity portfolio weight.
Shares of Tesla averaged $174.45 during the first quarter; the stock is significantly undervalued based on its price-to-GF Value ratio of 0.41 as of Wednesday.
The Austin, Texas-based electric vehicle giant has a GF Score of 80 out of 100 based on a rank of 8 out of 10 for growth and financial strength, a momentum rank of 7 out of 10, a profitability rank of 5 out of 10 and a GF Value rank of 4 out of 10.
Match Group
Appaloosa purchased 525,000 shares of Match Group (MTCH, Financial), giving the position 1.06% equity portfolio weight. Shares averaged $43.62 during the third quarter.
GuruFocus’ GF Value Line labeled the Dallas-based online dating company a possible value trap based on the company’s low price-to-GF Value ratio of 0.28 as of Wednesday and poor ranks for financial strength, growth and momentum.
Based on the above GF Score component ranks, which include a profitability rank of 7 out of 10 and a GF Value rank of 2 out of 10, Match Group received a GF Score of 64 out of 100.
