"Tracking David Tepper’s Appaloosa Management Portfolio – Q3 2016 Update"
"David Tepper’s 13F portfolio increased from $3.80B to $4.40B this quarter.Energy Transfer Partners is the largest individual stock position at 9.76% of the portfolio.A large new short position in S&P 500 thru SPY Puts was established 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 11/14/2016. Please visit our  to get an idea of his investment philosophy and our  for the fund’s moves during Q2 2016.This quarter, Tepper’s 13F portfolio increased ~16% from $3.80B to $4.40B. The increase was primarily due to a large new stake in S&P 500 ETF Put options. Alphabet Inc., last quarter’s largest individual stock position was reduced by ~25% this quarter. The number of holdings increased from 37 to 42. The top-five individual stock positions are Energy Transfer Partners LP, Alphabet Inc., Williams Partners LP, Allergan plc, and Allstate Corporation. Combined, they account for ~37% 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:SPDR S&P500 ETF (SPY) Puts: The short position in SPY is the largest 13F stake at 12.28% of the portfolio. It was established this quarter as the underlying traded between $208 and $219 and it currently goes for $219.Note: SPY is an actively traded position in Tepper’s portfolio. Going back a decade, this is the first time a large short position has been established.Facebook Inc. (FB): FB is a fairly large 4.32% of the portfolio stake established this quarter at prices between $114 and $131 and the stock currently trades near the low end of that range at $117.Note: FB has had several previous roundtrips in the portfolio: The latest was a fairly large 3.28% of the portfolio position established in Q1 2016 at prices between $94 and $116 and sold last quarter at prices between $109 and $121.Apple Inc. (AAPL): AAPL is a ~2% portfolio position purchased this quarter at prices between $95 and $116 and the stock is now at $110.Note: Apple is a frequently traded stock in Appaloosa’s portfolio since early 2012. Most recently, a 2.65% of the US long portfolio stake was established in Q2 2015 at prices between $120 and $133. It was disposed over the next two quarters at prices between $93 and $132.Bank of America (BAC), Citizens Financial Group (CFG), and PNC Financial (PNC): These three are small (less than ~1.5% of the portfolio each) stakes established this quarter in the financials. All three are trading ~20% above their prices at the end of the quarter.Note: BAC has seen several roundtrips in the portfolio. The most recent activity follow: It was a 1.67% of the US long portfolio stake established in Q1 2016 at prices between $11.16 and $16.83 and sold last quarter at prices between $12.18 and $15.11.Qualcomm Inc. (QCOM), Tempur Sealy Intl. (TPX), VMWare Inc. (VMW), and Yahoo Inc. (YHOO): These are the other small (less than ~1.5% of the portfolio each) positions established during quarter.Stake Disposals:Community Health Systems (CYH): CYH position was first purchased in Q4 2015. The following quarter saw a huge 600% increase to a 2.34% portfolio stake at prices between $11 and $23. Last quarter saw a ~12% reduction at prices between $12.08 and $17.30 and disposal this quarter was at prices between $10 and $13.50. The exit was timely as the stock dropped sharply following results earlier this month. It is now at $5.78.Note: Quorum Health (QHC) was spun off from CYH in April. The prices quoted above are adjusted to account for this.Ingersoll-Rand (IR): IR was a small ~0.79% portfolio stake established in Q3 2015 at prices between $50.50 and $69 and increased by ~51% the following quarter at prices between $50.50 and $60. The pattern reversed in Q1 2016: ~30% reduction at prices between $48.50 and $62. That was followed with another ~35% selling last quarter at prices between $59 and $67. The elimination this quarter happened at prices between $63 and $69. The stock currently trades at $74.46.Twenty First Century Fox (FOX) (FOXA): FOX was a 3.11% of the US long portfolio stake purchased in Q1 2016 at prices between $24 and $28 and increased by ~11% last quarter at prices between $26 and $31. The entire stake was sold this quarter at prices between $24 and $29. The stock currently trades at $27.69.PPG Industries (PPG) and Triumph Group (TGI): These are very small (less than ~1% of the portfolio each) stakes that were reduced last quarter and eliminated this quarter.Stake Increases:Energy Transfer Partners LP (ETP): ETP is currently the largest individual stock position at 9.76% of the portfolio. The original stake is from Q4 2015 at prices between $28 and $47. The following quarter saw a ~200% increase at prices between $20 and $35. Last quarter saw a ~30% selling at prices between $30 and $41. The stock is now at $39.37. This quarter saw a marginal increase.Goodyear Tire & Rubber (GT): GT is a very long-term 0.63% 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 last four quarters had seen a huge ~93% reduction at prices between $25 and $35. The pattern reversed this quarter: ~21% increase at prices between $25 and $33. The stock currently trades at $30.14.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 & Q3 20115 saw a ~27% combined reduction at prices between $73.50 and $95. In Q4 2015, the pattern reversed: ~28% increase at prices between $64 and $79.  Last two quarters saw a ~73% combined reduction at prices between $63 and $82. Tepper is harvesting huge gains. The remaining stake is at 2.12% of the portfolio and the stock is at $72.39. This quarter saw marginal buying.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 more than doubled in Q1 2015 at prices between $27 and $31.50. Q4 2015 saw another ~41% increase at prices between $28 and $32. Last quarter saw a ~17% trimming at prices between $32.50 and $36.50. It currently trades at $38.35. The stake is now at ~2% of the portfolio. There was a very minor increase this quarter.Kinder Morgan Inc. (KMI): KMI is a ~2% portfolio stake first purchased in Q4 2015 at prices between $15 and $32. H1 2016 saw a ~84% reduction at prices between $12 and $19. There was an about turn this quarter: ~140% increase at prices between $18 and $23. The stock currently goes for $21.67.Stake Decreases:Allergan plc (AGN): The top-five 6.37% position was established in Q4 2015 at prices between $253 and $323. It was increased by ~86% the following quarter at prices between $266 and $313 and that was followed with a whopping 350% increase last quarter at prices between $202 and $278. The stock is now below those ranges at $192. This quarter saw a very minor reduction.Allstate Corporation (ALL): The top-five ~5 % Allstate stake was established over Q3 & Q4 2015 at prices between $57 and $69. The stock currently trades at $72. This quarter saw a ~7% trimming.Alphabet Inc. (GOOG) (GOOGL): GOOG is the second-largest 13F equity stake at 8.33% 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 & Q3 2015 saw a combined ~77% reduction at prices between $517 and $673. Q4 2015 saw an about turn: ~240% increase over the last three quarters at prices between $608 and $777. The stock currently trades at $761. This quarter saw a ~25% selling at prices between $692 and $787.Atlantica Yield plc (ABY): ABY is a 2.59% portfolio position purchased in Q4 2015 at prices between $14.50 and $21. This year has seen an overall ~5% trimming. The stock is now at $17.86.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 stake was more than doubled at prices between $32 and $41. The pattern reversed in Q3 2015: the position was almost sold out over the last five quarters at prices between $28 and $36. It currently trades at $33 and the stake is now minutely small at ~0.13% of the portfolio.Hain Celestial (HAIN): HAIN is a small ~1% stake purchased in Q1 2016 at prices between $33.50 and $41.50 and reduced by ~10% last quarter at prices between $41 and $53. The stock currently trades at $38.62. This quarter saw a marginal further reduction.Huntsman Corporation (HUN): HUN is a 2.34% 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 6.3M shares and the stock trades at $19.10. Q1 2015 saw a one-third increase at prices between $21 and $24.50. Last quarter saw a ~16% reduction at prices between $12.50 and $16.50 and that was followed with a ~6% trimming this quarter.Mohawk Industries (MHK): MHK is a 2.63% of the US long portfolio position established in Q1 2016 at prices between $152 and $192 and increased by ~37% last quarter at prices between $178 and $201. This quarter saw a ~24% reduction at prices between $186 and $216. The stock is now at $200. Tepper is starting to harvest gains.Note: MHK has seen several roundtrips. The last one was a very small stake purchased in Q1 2015 and disposed in Q3 2015.NXP Semiconductors (NXPI): NXPI was a top five stake at ~7% of the US long portfolio as of Q3 2015. The original position was from Q3 2014 at prices between $60.50 and $73. The stake saw a ~38% increase in Q3 2015 at prices between $79 and $99. It was sold down by ~65% the in following quarter at prices between $73 and $98. The pattern reversed last quarter: ~81% increase at prices between $64 and $83. The position was almost eliminated this quarter at prices between $76 and $102. The stock currently trades at $98.88.Note: Last month, Qualcomm (QCOM) agreed to buy NXP Semi at $110 per share.Owens Corning (OC): The original OC stake was established in Q1 & 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. This quarter saw a ~12% trimming at prices between $51 and $55.50. The stake is now at 3.58%. The stock currently trades at $53.59. OC is starting to harvest gains.Southwest Airlines (LUV): LUV is now a very small 0.51% position. It was first purchased in Q3 2015 at prices between $32 and $40.50. The following quarter saw a ~160% increase at prices between $38 and $50. The pattern reversed in Q2 2016: ~87% reduction over the last two quarters at prices between $37 and $48. The stock currently trades at $47.06.Synchrony Financial (SYF): SYF is a 2.65% of the portfolio position established in Q1 2016 at prices between $24.50 and $30.50 and increased by ~21% last quarter at prices between $23 and $32. This quarter saw an almost one-third reduction at prices between $25 and $28.50. The stock is now at $33.62.Note: The retail unit spinoff from General Electric (GE) started trading in July 2014.Western Digital (WDC): WDC is a 1.53% of the portfolio stake established last quarter at prices between $35.50 and $51. It was reduced by ~21% this quarter at prices between $43 and $59. The stock is now at $60.93.Whirlpool Corporation (WHR): WHR is a fairly large ~4.27% 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: ~44% reduction over the next two quarters at prices between $140 and $215. In Q4 2015, there was a ~43% increase at prices between $142 and $167. This year has seen a combined ~30% reduction at prices between $127 and $192. The stock currently trades at $161.WMIH Corp. (WMIH): WMIH is a very small 0.41% stake that was reduced this quarter. Although the relative position size is very small, it is significant that Tepper owns ~3.5% of the business.Kept Steady:Terraform Power (TERP): TERP is a 2.75% portfolio stake established in Q4 2015 at prices between $7 and $20. The stock is now at $13.62.Alps ETF Alerian MLP (AMLP) and Williams Partners LP (WPZ): AMLP is a very small 1.37% portfolio stake purchased in Q4 2015 at prices between $10.30 and $14.14 and the stock is now at $12.28. WPZ is a top-three 7.83% portfolio position purchased in Q4 2015 at prices between $23 and $35 and the stock currently trades above that range at $36.34.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. The position was almost eliminated last quarter when SPY traded between $200 and $212. It currently trades at $219.Following are the other minutely small stakes in the portfolio: Citigroup Inc. (C), Dell Technologies (DVMT), Delta Air Lines (DAL), Kayne Anderson MLP (KYN), SPDR S&P 500 ETF (SPY), Terraform Global (GLBL), and US Foods Holding (USFD). The 13F report also has a minutely small stake in Kinder Morgan Warrants.Note: US Foods Holding had an IPO in June and the stock currently trades near the IPO price at ~$23.The spreadsheet below highlights changes to Tepper’s US stock holdings in Q3 2016:"