David Tepper's Top Q3 Moves Include General Motors, Airlines And Alibaba

Like many other hedge funds’ portfolios, Appaloosa’s portfolio suffered in the third quarter. Its value declined from $4.03 billion by the end of the second quarter to $2.86 billion by the end of the third quarter.

Between July and September, inclusive, the fund sold out of seven stocks, reduced its holdings in another 17 companies, boosted its exposure to seven and started new stakes in six firms.

Most of the resources were still allocated to consumer discretionary stocks, which accounted for roughly 32 percent of the total equity portfolio (down from 38 percent in the previous quarter). Other important sectors for the firm were transports (17 percent), information technology (16 percent), industrials (15 percent) and healthcare (10 percent).

Related Link: Holiday Outlook: Consumer Electronics To Outperform

It should be noted, however, that Tepper was placing big bets on transportation in Q3 in an environment of low oil prices. Last quarter, only 9 percent of the fund’s assets were placed in transportation stocks – this figure almost doubled over the third quarter.

Top Investments

Appaloosa’s top investments continued to be General Motors Company GM and HCA Holdings Inc HCA, even after the firm trimmed its exposure by 31 percent and 15 percent, respectively. Appaloosa still stands among the largest institutional investors in both companies, outranked however by larger firms like the Vanguard Group and FMR LLC.

According to its latest 13F filing, Appaloosa owns 12,885,294 shares of General Motors and 3,553,537 shares of HCA, down from 18,796,165 shares and 4,184,525 shares, respectively, as of the end of the second quarter.

Bullish Move Of The Quarter

The most bullish move was probably the one seen at Delta Air Lines, Inc. DAL. Taking advantage of the benefits derived from low oil prices, Tepper boosted his exposure to the airliner by 42 percent, disclosing ownership of 6,077,033 shares as of the end of the third quarter. Once again, however, firms like the Vanguard Group own much larger positions in the stock (Vanguard disclosed holding 42,875,340 shares of Delta).

Another airliner that felt Tepper’s bullishness was Southwest Airlines Co LUV, which saw the firm start a new stake comprising 1,636,300 shares, worth more than $62 million.

Largest Closed Position

Finally, the largest position closed out over the third quarter was that at Alibaba Group Holding Ltd BABA. Between July and September, the fund disposed of 1,360,000 shares of the Chinese internet company, keeping none and therefore missing out on the recuperation the stock experienced over October.

Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.