Invest Like David Tepper: Alibaba Group Holding Ltd (BABA), NXP Semiconductors NV (NXPI)
Billionaire hedge fund manager David Tepper is the president and CEO of Appaloosa Management LP. Tepper’s hedge fund generated a loss of -9.62% in the third quarter, though has a three year annualized average of +6.64%. Let’s have a look at some of his activity in the third quarter (July 1, 2015-September 30, 2015) including transactions for Alibaba Group Holding Ltd (NYSE:BABA) and NXP Semiconductors NV (NASDAQ:NXPI).
Alibaba Group Holding Ltd
Tepper decided to sell 100% of his holdings in Alibaba last quarter. In the third quarter, Alibaba’s stock suffered declines due to macro-economic issues in China as well as a brutal Barron’s report saying shares would fall by 50%. The report questioned the company’s corporate governance, conflict of interest, integrity of goods, and other business practices, accusing Ma and other employees of fabricating numbers on its financial reports. Other quarter highlights include the company’s deal with Chinese electronic company Suning and its $1 billion investment in the Aluyin expansion, the company’s cloud service, which is the largest platform in China.
Once again, Tepper’s actions and analyst consensus do not match. Out of the 22 analysts polled by TipRanks who have rated Alibaba in the past 3 months, 21 gave a Buy rating and one remains on the sidelines. The average 12-month price target for this stock is $94.65 marking a 34% upside from where shares last closed.
NXP Semiconductors NV
On another note, Tepper increased his holdings in NXP Semi by 38% in the third quarter, now accounting for 7% of his total holdings. In the third quarter, NXP entered a deal with Blackboard, posted better than expected profit in its second quarter report, received EU approval to acquire peer chipmaker Freescale Semiconductor, and teamed up with RFID provider Neology to showcase innovative traffic management and vehicle ID systems at a vehicle trade show in Germany. NXP was also able to have a leg up on its competitors through its broad range of products and its success in the Internet of Things technology.
Tepper and analysts agree on this semi-conductor stock. All 12 analysts polled by TipRanks who have rated the company in the past 3 month were bullish on the stock, with an average price target of $109.20, marking a 46% upside from where shares last closed.