"Tracking David Tepper’s Appaloosa Management Portfolio – Q2 2016 Update"
"David Tepper’s US long equity portfolio decreased from $5.66B to $3.80B this quarter.Alphabet Inc. is the largest individual stock position at 11.46% of the portfolio.The large stake in S&P 500 ETF Call options along with a top three position in Delta Airlines were sold during the quarter.This article is part of a series that provides an ongoing analysis of the changes made to David Tepper’s US stock portfolio on a quarterly basis. It is based on Appaloosa Management’s regulatory  filed on 08/12/2016. Please visit our  to get an idea of his investment philosophy and our  for the fund’s moves during Q1 2016.This quarter, Tepper’s US long equity portfolio decreased 32.77% from $5.66B to $3.80B. The decrease was primarily due to closing a large stake in S&P 500 ETF Call options. A top three holding in Delta Airlines was also disposed of this quarter. The number of holdings decreased from 49 to 37. The top-five individual stock positions are Alphabet Inc., Energy Transfer Partners LP, Williams Partners LP, Allergan plc, and Allstate Corporation. Combined, they account for ~45% of the 13F holdings. Energy continues to be a major theme in the portfolio.To know more about Tepper's distress investing style, check out the book .New Stakes:Western Digital (WDC): WDC is a 1.80% of the portfolio stake established this quarter at prices between $35.44 and $50.81. The stock is now at $44.31.Note: Appaloosa has a history of playing the trends in cyclicals successfully and this new position is typical.Stake Disposals:Bank of America (BAC): BAC was a 1.67% of the US long portfolio stake established last quarter at prices between $11.16 and $16.83 and disposed of this quarter at prices between $12.18 and $15.11. The stock is currently at $14.91.Note: BAC has seen several roundtrips in the portfolio. The last was a very small position in Q2 2015 that was eliminated the following quarter.Facebook Inc. (FB): FB was a fairly large 3.28% of the portfolio position established last quarter at prices between $94 and $116 and sold this quarter at prices between $109 and $121. The stock is now at $125.Note: FB has seen a previous roundtrip. A fairly large ~3.5% stake was eliminated in Q4 2014 and that trade generated short-term gains.Powershares QQQ (QQQ) Calls: Long and Short positions against index ETFs are a regular occurrence in Tepper’s portfolio. The 1.93% stake established last quarter in Calls occurred when the underlying traded between $96 and $112. The elimination this quarter happened as QQQ traded between $102 and $111. It is currently at $107.Note: The last roundtrip was in H1 2015: A huge 7.25% portfolio stake was established in Q1 2015 and disposed of the following quarter.Delta Airlines (DAL):  DAL was the third-largest position at 7.40% of the portfolio as of last quarter. It was first purchased in 2012 at a cost-basis in the high single digits. Q3 2015 saw a ~42% increase at prices between $40 and $48 and that was followed with a ~21% increase the following quarter at prices between $44 and $52. Last quarter had also seen a ~17% further increase at prices between $40.77 and $50.69. The disposal this quarter happened at prices between $33 and $49. The stock currently trades at $36.35. Tepper harvested huge gains.United Rentals (URI): URI was first purchased in Q1 2015 at prices between $82 and $104 and increased by ~17% the following quarter at prices between $87 and $105. Q3 2015 saw a further ~39% increase at prices between $59.48 and $87.62. The pattern reversed last quarter: ~25% reduction at prices between $43.34 and $72.54. The elimination this quarter was at prices between $58 and $75. It now trades at $78.37.Range Resources (RRC): A small 0.79% of portfolio position in RRC was established in Q4 2015 at prices between $21 and $37. The stake was sold out this quarter at prices between $31 and $47. The stock is now at $38.75.Pfizer Inc. (PFE): The 1.32% portfolio position in PFE was established in Q4 2015 at prices between $31.33 and $35.45. Last quarter saw a minor increase but the position was disposed of this quarter at prices between $29.64 and $35.31. The stock is now at $34.98.Southwest Energy (SWN): SWN was a very small 0.63% of the portfolio position that was eliminated this quarter.Stake Increases:Allstate Corporation (ALL): The top-five 6.14% ALL stake was established in Q3 2015 at prices between $57 and $69 and increased by ~360% the following quarter at prices between $58 and $65. The stock currently trades at $69.13. Last two quarters have also seen minor increases. The activity indicates a clear bullish bias.Allergan plc (AGN): AGN has seen consistent buying over the last three quarters. The top-five 7.66% position was established in Q4 2015 at prices between $253 and $323. It was increased by ~86% last quarter at prices between $266 and $313 and that was followed with a whopping 350% increase this quarter at prices between $202 and $278. The stock is now at $250.Alphabet Inc. (GOOG) (GOOGL) previously Google: GOOG is the largest 13F equity stake at 11.46% of the portfolio. It has been a significant presence in the portfolio since Q1 2012 and the original purchase was at prices between $290 and $325. The stake was increased by 87% in Q1 2014 at prices between $550 and $610. Q2 2015 saw a large 56% reduction at prices between $520 and $565 and that was followed with a ~47% reduction in Q3 2015 at prices between $517 and $673. Q4 2015 saw an about turn: ~190% increase at prices between $608 and $777. The stock currently trades at $783. Last two quarters have also seen a ~18% increase at prices between $668 and $767.Mohawk Industries (MHK): MHK is a 3.79% of the US long portfolio position established last quarter at prices between $152 and $192 and increased by ~37% this quarter at prices between $178 and $201. The stock is now at $212.Note: MHK has seen several roundtrips. The last one was a very small stake purchased in Q1 2015 and disposed in Q3 2015.Synchrony Financial (SYF): SYF is a 4.03% of the portfolio position established last quarter at prices between $24.48 and $30.41 and increased by ~21% this quarter at prices between $23.36 and $31.95. The stock is now at $27.68.Note: The retail unit spinoff from General Electric (GE) started trading in July 2014.Twenty First Century Fox (FOX) (FOXA): FOX is a 3.11% of the US long portfolio stake purchased last quarter at prices between $24.21 and $28.20 and increased by ~11% this quarter at prices between $26.26 and $30.93. The stock currently trades at $26.57.Stake Decreases:General Motors (GM): GM was Appaloosa’s largest 13F individual stock position at 8.54% of the US long portfolio as of Q4 2015. The bulk of the original stake was purchased in Q1 2012 and Q2 2012 at prices between $21 and $27. Between Q1 2014 and Q1 2015, that original stake was more than doubled at prices between $32 and $41. The pattern reversed in Q3 2015: roughly one-third reduction at prices between $27.28 and $33.33. It was reduced further by ~81% last quarter at prices between $26.90 and $34.01 and that was followed with another ~42% selling this quarter at prices between $27.51 and $32.66. It currently trades at $31.57 and the stake is now very small at ~1% of the portfolio.Goodyear Tire & Rubber (GT): GT is a very long-term 0.48% position that has been in the portfolio since before the financial crisis. In 2007, the stake stood at 2.7M shares (~5% of portfolio). The position size peaked at 22M shares in Q2 2013 when a large increase happened at prices between $12 and $15.50. The stake has been sold down since. Q3 2015 saw a ~41% reduction at prices between $27.83 and $32.66 and that was followed with another ~64% reduction last quarter at prices between $29 and $35. The pattern continued last quarter with another ~55% reduction at prices between $26.34 and $33.07. This quarter also saw another ~26% selling at prices between $24.53 and $32.98. The stock currently trades at $29.30. Tepper is harvesting huge long-term gains.Hain Celestial (HAIN): HAIN is a small 1.68% stake purchased last quarter at prices between $33.46 and $41.46 and reduced by ~10% this quarter at prices between $41 and $53. The stock currently trades at $55.35.HCA Holdings (HCA): HCA became a significant position in the portfolio in Q4 2012 when over 4M shares were purchased in the low-30s price-range. Q2 20115 saw a ~15% reduction at prices between $73.61 and $91.84 and that was followed with a similar reduction the following quarter at prices between $74 and $95. In Q4 2015, the pattern reversed: ~28% increase at prices between $64 and $79.  Last quarter saw a ~30% reduction at prices between $62.83 and $78.10 and that was followed with a ~62% reduction this quarter at prices between $74.43 and $81.96. Tepper is harvesting huge gains. The remaining stake is at 2.46% of the portfolio and the stock is at $76.64.HD Supply Holdings ((HDS): HDS became a significant presence in the portfolio in Q1 2014 when around 1M shares were purchased for around $23 per share. The original stake was increased by ~118% in Q1 2015 at prices between $27.02 and $31.41. Q4 2015 saw another ~41% increase at prices between $28 and $32. It currently trades at $36.05. The stake is now at 2.52% of the portfolio. This quarter saw a ~17% trimming at prices between $32.77 and $36.42.Huntsman Corporation (HUN): HUN is a 2.38% of the US long portfolio position that has been in the portfolio since Q1 2012. Just over 5M shares were purchased at that time for around $13 per share. The stake is now at 6.7M shares and the stock trades at $16.41. Q1 2015 saw a one-third increase at prices between $21.26 and $24.40. This quarter saw a ~16% trimming at prices between $12.70 and $16.54.Ingersoll-Rand (IR): IR is a small ~0.79% portfolio stake established in Q3 2015 at prices between $50.61 and $68.76 and increased by ~51% the following quarter at prices between $50.69 and $60.21. The pattern reversed last quarter: ~30% reduction at prices between $48.80 and $62.07 and that was followed with another ~35% selling this quarter at prices between $59.18 and $66.81. The stock currently trades at $68.Owens Corning (OC): The original OC stake was established in Q1 2012 & Q2 2012 at prices between $29 and $37. Q4 2014 saw a ~14% reduction at prices between $29 and $36.80 while in Q2 2015 there was a ~22% increase at prices between $38.31 and $43.40. The stake is now at 4.52%. The stock currently trades at $53.79. Last two quarters saw marginal reductions.NXP Semiconductors (NXPI): NXPI was a top five stake at 6.98% of the US long portfolio as of Q3 2015. The stake saw a ~38% increase that quarter at prices between $79.26 and $99.28. It was sold down by ~65% the following quarter at prices between $73 and $98. The pattern reversed last quarter: ~81% increase at prices between $64 and $83. The original stake was from Q3 2014 at prices between $60.50 and $73.01. The stock currently trades at $86.03 and the stake is at 2.88%. This quarter saw very minor trimmingSouthwest Airlines (LUV): LUV is a 3.59% position purchased in Q3 2015 at prices between $32.36 and $40.45. The following quarter saw a ~160% increase at prices between $38 and $50. The pattern reversed this quarter: ~20% reduction at prices between $36.76 and $47.73. The stock currently trades at $36.52.SPDR S&P 500 ETF (SPY) & Calls: A huge 9.89% stake in SPY & Calls (mostly Calls) was established in Q4 2015 when the underlying traded between $192 and $211. Last quarter had seen a marginal reduction. The position was almost eliminated this quarter when SPY traded between $200 and $212. It currently trades at $218.Note: The last two roundtrips played out as follows: SPY was the largest position at 22% of the US long portfolio in Q1 2014. It was drastically reduced the following quarter and was almost eliminated in Q4 2014. A similar pattern of trading played out over H1 2015: a huge stake increase to a 16.38% portfolio stake (nominal) using SPY Calls in Q1 2015 followed by liquidation the following quarter.Whirlpool Corporation (WHR): WHR is a fairly large ~5.72% of the US long portfolio position. Q1 2014 saw a 125% increase at prices between $127 and $159 and that was followed with a stake doubling in Q3 2014 at prices between $139 and $156. In Q4 2014, the pattern reversed: ~15% reduction at prices between $140 and $194. The following quarter saw another one-third reduction at prices between $187 and $215. In Q4 2015, there was a ~43% increase at prices between $142 and $167 while last quarter saw ~12% trimming. This quarter also saw a ~8% further trimming. The stock currently trades at $186.Community Health Systems (CYH): The ~2% CYH position was first purchased in Q4 2015. The following quarter saw a huge 600% increase at prices between $11 and $23. This quarter saw a ~12% reduction at prices between $12.08 and $17.30 and the stock is now at $10.95.Note: Quorum Health (QHC) was spun off from CYH in April. The prices quoted above are adjusted to account for this.Atlantica Yield plc (ABY), Alps ETF Alerian MLP (AMLP), Energy Transfer Partners LP (ETP), and Williams Partners LP (WPZ): These energy sector stakes were established in Q4 2015 and increased last quarter. All four positions saw reductions this quarter. Combined, the total position is still very large at ~25% of the portfolio. ETP and WPZ are the second and third-largest stakes in the portfolio at 11.43% and 8.44% respectively. ETP has doubled while WPZ has tripled from the February lows. They were both reduced by ~30% this quarter.Kinder Morgan Inc. (KMI), PPG Industries (PPG), Triumph Group (TGI), and WMIH Corp. (WMIH): These are very small (less than ~1% of the portfolio each) stakes that were reduced this quarter.Kept Steady:Terraform Power (TERP): TERP is a 2.50% portfolio stake established in Q4 2015 at prices between $6.90 and $19.81. Last quarter saw a ~12% increase. The stock is now at $11.92.Following are the other minutely small stakes in the portfolio: Kayne Anderson MLP (KYN), Quorum Health (QHC), Terraform Global (GLBL), and US Foods Holding (USFD). QHC and USFD are new this quarter. Appaloosa’s 13F portfolio also has minutely small stakes in General Motors and Kinder Morgan Warrants.Note: USFD had an IPO in June and the stock currently trades near the IPO price at ~$24. QHC is a spinoff from Community Health Systems (CYH) that started trading in April. The terms called for CYH shareholders to receive one share for every four shares held. Appaloosa had CYH shares for which they received QHC shares. Since then, they have reduced the stake by ~50%.The spreadsheet below highlights changes to Tepper’s US stock holdings in Q2 2016:"