"Tracking David Tepper’s Appaloosa Management Portfolio – Q3 2014 Update"
"David Tepper’s US long equity portfolio decreased 5% from $7.15B to $6.79B this quarter.Several small positions were eliminated and a large position in American Airlines was reduced by over one-third in the quarter.Appaloosa added a medium-sized stake in NXP Semiconductors and significantly increased positions in Whirlpool Corporation, CBS Corporation, General Motors, Priceline Group, and Delta Airlines.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 11/14/2014. Please visit our  to get an idea of his investment philosophy and our  for the fund’s moves during Q2 2014.This quarter, Tepper’s US long equity portfolio decreased 5% from $7.15B to $6.79B. The number of holdings decreased from 50 to 42 as several small positions were eliminated. There were also four significant additions: Alibaba Group Holdings, Lorillard Inc., NXP Semiconductors, and Shire plc. The top-five positions are Google Inc. (9.25%), General Motors (7%), Citigroup Inc. (6.35%), Priceline (6.26%), and HCA Holdings (5.54%). Combined, they account for just over 34% of the entire US long portfolio.New Stakes:NXP Semiconductors (NXPI): NXP is a medium-sized 2.55% of the US long portfolio position established this quarter at prices between $60.50 and $73.01. The stock currently trades just outside that range at $74.14. The substantial stake establishment indicates a bullish bias.Lorillard Inc. (LO): LO is a 1.25% of the US long portfolio position established this quarter at prices between $59 and $67.22. The stock currently trades in the middle of that range at $63.14.Note: On July 15, 2014 Reynolds American (RAI) agreed to acquire LO in a cash-and-stock deal valued at $24B ($50.50 cash and 0.2909 in RAI stock).Alibaba Group Holdings (BABA) and Shire plc (SHPG): BABA & SHPG are very small 0.95% and 0.71% of the US long portfolio positions established this quarter. The BABA stake was purchased at prices between $86.10 and $93.89 and the stock currently trades at $110. The SHPG position was established at prices between $232 and $263 and the stock currently trades below that range at $211.Note: In July, AbbVie (ABBV) agreed to acquire SHPG for $55B but the merger was called off in October.Stake Disposals:American International Group (AIG): AIG was a small 0.92% of the US long portfolio position that was reduced by more than half in Q1 2014 at prices between $46.88 and $52.22. This quarter, the remaining position was sold at prices between $52 and $56.33. The stock currently trades at $54.45.  The original stake was a 6.75% of the portfolio position established in Q3 2012 at prices between $31 and $35. The disposal indicates a bearish bias.Expedia Inc. (EXPE): EXPE was a ~1% position established in Q1 2014 at prices between $63 and $80. It was increased by around 29% last quarter at prices between $68 and $80 but was disposed of this quarter at prices between $77.40 and $88.40. The stock currently trades at $86.08.Prudential Financial (PRU): The small 0.92% of the US long portfolio PRU stake was disposed of this quarter at prices between $85.75 and $93.16. It was reduced by ~46% in Q1 2014 at prices between $80.45 and $92.22. The position was originally purchased in Q1 and Q2 2013 at prices between $55 and $73. Tepper harvested large long-term gains.Walt Disney (DIS): DIS was a minutely small 0.26% position in Q4 2013. It was increased significantly in Q1 2014 at prices between $70 and $83.34. This quarter, the stake was eliminated at prices between $85 and $90.94. The stock currently trades at $88.90.ASML Holding N V (ASML), Baidu Inc. (BIDU), Celanese Corporation (CE), Comcast Corporation (CMCSA), Du Pont E I De Nemours & Co (DD), and Ingredion Inc. (INGR): These are very small positions (less than ~1% of the US long portfolio) that were sold this quarter.Stake Increases:CBS Corporation (CBS): CBS is a 2.25% of the US long portfolio stake increased by just over 70% last quarter at prices between $54 and $63. It was increased from a very small stake to a 0.86% position in Q1 2014 at prices between $56 and $68. This quarter saw a ~32% increase at prices between $53.50 and $64.30. The stock currently trades at $53.67. The aggressive build-up indicates a bullish bias. For investors attempting to follow Tepper, CBS is a good option to consider for further research.Chicago Bridge & Iron (CBI): CBI has been in the portfolio since Q2 2013. Around 1.5M shares were purchased for around $56 at that time. The stake had since been sold down to 1.23M shares (1.43% of the US long portfolio) as of Q1 2014. Last quarter, the position was increased by ~22% at prices between $65.51 and $87.65 and this quarter saw another ~10% increase at prices between $57.85 and $70. The stock currently trades below those ranges at $56.02. The activity indicates a mild bullish bias.General Motors (GM): The large 7% of the US long portfolio GM position was increased by almost 60% in Q1 2014 at prices between $34 and $41. Last quarter, the position was increased by another two-thirds at prices between $32 and $37 and this quarter saw another ~15% increase at prices between $31.94 and $37.97. The bulk of the original stake was purchased in Q1 2012 and Q2 2012 at prices between $21 and $27. The stock currently trades at $32.13. The activity indicates a clear bullish bias.Priceline Group Inc. (PCLN): PCLN is a 6.26% of the US long portfolio position established in Q1 2014 at prices between $1113 and $1370. Last quarter, the position was increased by over 70% at prices between $1108 and $1292 and this quarter saw a further ~16% increase at prices between $1154 and $1309. The stock currently trades at $1154. The large stake build-up indicates a clear bullish bias.Whirlpool Corporation (WHR): The 4.29% of the US long portfolio position was almost doubled this quarter at prices between $139 and $156. It was reduced marginally last quarter. Q1 2014 had seen a 125% increase at prices between $127 and $159. The stock currently trades well above those ranges at $182. The aggressive build-up indicates a clear bullish bias.Delta Airlines (DAL):  DAL is a ~4% stake that was increased by around 17% this quarter at prices between $35.61 and $40.93. The stock currently trades at $43.96.KBR Inc. (KBR) and Terex Corporation (TEX): These are very small positions (less than ~1% stake increase each) that saw some buying this quarter. As the position sizes are still very small, the activity does not indicate a clear bias.Stake Decreases:American Airlines (AAL): AAL was Tepper’s second-largest position at 7% of the US long portfolio as of last quarter. The position was established when the newly merged airline (US Airways & American Airlines) started trading in Q4 2013 - Tepper bought into US Airways in Q1 2012 at much lower prices. The stake was increased by ~23% in Q1 2014 at prices between $25 and $39. Last quarter saw an additional 35% stake increase at prices between $33.37 and $44.55. This quarter, the pattern reversed as the position was sold down by 38% to a still significant 3.81% stake at prices between $35 and $43.86. The stock currently trades at $44.16.Apple Inc. (AAPL): AAPL became a significant presence in the portfolio in 2011 although the stock was also purchased in 2009. In Q1 2012, around 3.5M shares (split-adjusted) were purchased at prices between $60 and $87 and the stake represented around 10% of the US long portfolio at the time. The next quarter saw some selling at prices between $76 and $91. In Q4 2012, another 2.8M shares were purchased at prices between $73 and $94. The stock was consistently sold from the next quarter onwards and by Q4 2013 the position was at 1.5M shares. Most of the selling happened in Q1 2013 and Q2 2013 at prices between $56 and $75. Q1 2014 saw a 16% stake increase at prices between $71 and $80. This quarter, the pattern reversed again: 31% reduction at prices between $92.93 and $103. The stock currently trades at $116.Citigroup Inc. (C): C is a top-five position at 6.35% of the US long portfolio. Q1 2014 saw a 4% stake increase at prices between $46.34 and $55. The original position consisted of around 6M shares purchased in Q1 2012 at prices between $27 and $37 and another 3M shares purchased in Q2 2012 at prices between $25 and $37. Last quarter saw a 14% reduction at prices between $45.68 and $49.58 and this quarter saw marginal additional selling. The current position is at just over 8.3M shares and the stock trades at $53.52.Masco Corporation (MAS): MAS stake was almost doubled to a significant 1.92% position last quarter at prices between $19.54 and $22.89. This quarter saw a ~6% reduction at prices between $20.27 and $24.44. The stock currently trades at $23.85.United Continental Holdings (UAL): The 3.42% of the US long portfolio UAL stake was increased by ~13% last quarter at prices between $39 and $48. This quarter saw minor selling. The stock currently trades at $56.39. The bulk of the original stake was established in Q1 2012 at prices between $18.21 and $25.Eastman Chemical (EMN) & MGM Resorts (MGM): These are very small positions (less than ~1% of the portfolio each) that were further reduced this quarter.Kept Steady:Facebook Inc. (FB): FB was increased from a minutely small stake to a fairly large 3.37% of the US long portfolio position last quarter at prices between $56 and $68. The stock currently trades at $73.60.Ford Motor (F): The 1.59% F stake was kept steady this quarter. The original position was a 6.5M share stake from Q1 2012 purchased at prices between $10.76 and $12.80 and the current position is at 7.3M shares. The stake has wavered in the interim: it peaked at almost 12M shares in Q1 2013 but since then has been sold. The stock currently trades at $15.46.Goodyear Tire & Rubber (GT): GT is a very long-term 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. Last quarter saw a ~7% reduction at prices between $22.67 and $28.12. The stock currently trades at $26.20.Google Inc. (GOOG) (GOOGL): GOOG is Appaloosa’s largest position at 9.25% of the US long portfolio. The stake was increased by 87% in Q1 2014 at prices between $550 and $610 (split-adjusted). It was increased by 22% last quarter at prices between $510 and $579. The stock currently trades at $535. GOOG has been a significant presence in the portfolio since Q1 2012. The original purchase was at prices between $290 and $325. The position size has wavered but the stake had a huge increase over the last year at prices between $425 and $610.Halliburton Company (HAL): HAL is a 4.78% of the US long portfolio position that was increased by around four times in Q1 2014 at prices between $48 and $59.50. The stock currently trades at $49.21.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.  The stake currently is at over 5.3M shares and account for 5.54% of the US long portfolio. The stock has more than doubled and Tepper is sitting on large long-term gains.Huntsman Corporation (HUN): HUN is a 2.80% 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 7.3M shares and the stock trades at $26.36. Here again, Tepper is sitting on large long-term gains.Mohawk Industries (MHK), Ryland Group (RYL), & Weatherford International (WFT): These are small positions (less than ~1% of the US long portfolio each) established last quarter and kept steady this quarter. MHK stake was established at prices between $130 and $141 and the stock currently trades at $148. RYL position was purchased at prices between $36 and $41.50 and the stock currently trades at $38.37. WFT stake was established at prices between $22 and $23 and the stock currently trades well below that range at $15.92.Owens Corning (OC): The position saw marginal buying last quarter but was kept steady this quarter. The original stake was established in Q1 2012 & Q2 2012 at prices between $29 and $37 and the stock currently trades at $35.40.PowerShares QQQ ETF (QQQ) and SPDR S&P 500 ETF (SPY): These were the two largest positions in the portfolio as of Q1 2014 - parts of these positions were in Calls at the time. The stakes were drastically reduced last quarter indicating clear caution toward the US market overall. The QQQ stake was reduced from around 14% to 4.66% while the SPY stake was reduced from over 22% to 3.84%.Triumph Group (TGI), Axial Corporation (AXLL), Broadcom Inc. (BRCM), & Schlumberger Ltd. (SLB): These are very small positions (less than ~1% of the US long portfolio) that were left untouched this quarter.Appaloosa’s 13F portfolio also has minute stakes (less than 0.5% of the portfolio each) in the following businesses: Walt Disney (DIS), General Motors and Hartford Financial warrants, and HD Supply Holdings (HDS).The spreadsheet below highlights changes to Tepper’s US stock holdings in Q3 2014:"