New hedge fund data from the third quarter is becoming available and David Tepper, one of the most wealthy hedge fund managers in the country, made some significant changes to Appaloosa Management’s holdings. Although Tepper’s portfolio has earned a +14.71% annualized return over the past three years, he lost 9.12% in the most recent quarter. Tepper’s portfolio is currently valued at $2.86 billion. The hedge fund completely sold out of Alibaba Group Holding Ltd (NYSE:BABA) and Bank of America Corp (NYSE:BAC). On the bullish side, the fund increased its stake in Delta Air Lines, Inc. (NYSE:DAL) and NXP Semiconductors NV (NASDAQ:NXPI).
Tepper sold out of Alibaba in the most recent quarter. Investors were worried about the Chinese ecommerce giant as the Chinese economy suffered over the summer. However, the company’s third quarter earnings beat analysts’ expectations, allowing investors to breathe a sigh of relief that the company had not been as badly impacted by the summer recession as feared. Recently, Alibaba reached a deal to purchase Youku Tudou, the “YouTube of China.” Analysts hope that the deal will double traffic to the ecommerce site as the video streaming website had 286 million visitors in August alone. According to TipRanks, 21 of the 23 analysts who weighed in on Alibaba in the last 3 months are bullish on the stock while 2 remain on the sidelines. The average 12-month price target between the 23 analysts is $94.20, marking a 20% potential upside from current levels.
Appaloosa sold out of Bank of America just as the bank seemed to be recovering from the 2008 recession. The bank beat earnings estimates this quarter, leaving behind the debilitating legal bills incurred in the wake of the 2008 recession. In light of this welcomed development, most analysts are bullish on the stock, taking a different stance than Tepper. According to TipRanks, 12 out of 14 analysts are bullish on Bank of America while 2 remain on the sidelines. The average 12-month price target is $18.88, marking a 9% potential upside from current levels.
Now on to the bullish moves, Tepper increased his stake in Delta and NXP Semi. In the second quarter, Tepper reduced his holdings in Delta by more than 8%, only to turn around this quarter and increase his stake in the airline company by 42%. Delta now makes up about 9.50% of Tepper’s portfolio with his shares valued at over $272 million. In the semiconductor sector, Tepper increased his holding in NXP Semi by nearly 38%. The semiconductor company now makes up nearly 7% of his holdings with shares valued at just shy of $200 million. Analysts polled by TipRanks share the same bullish sentiment on these stocks as both Delta and NXP Semi are recommended a Strong Buys.