Summary

  • The energy sector has the third largest representation in Tepper’s stock portfolio.
  • Power Transfer and EQT
    EQT
    Among his top 10 holdings.

David Tepper’s Appaloosa Management (Trades, Portfolio), a Florida-based hedge fund founded in 1993, has earned an international reputation for delivering solid returns among Wall Street investors.

The filings, which are known to specialize in distressed debt, show that the billionaire educator is focused on investing in distressed corporate equity and debt, bills of exchange, options, futures and junk bonds. In 2019, Tepper converted his hedge fund into a family office as a result of being the owner of the Carolina Panthers football team.

As of the end of the second quarter, the energy segment had the third largest representation in Tepper’s $1.59 billion stock portfolio with a weight of 22.65%.

According to his 13F filing for the three months ending June 30, Tepper’s five largest energy holdings, excluding collateral, are Energy Transfer LP (ET, Financial), EQT Corp. (EQT, Financial), Occidental Petroleum
OXY
(OXY, Finance), Antero Resources
English
Corp. (AR, Financial) and Enterprise Products Partners LP
EPD
(EPD, Finance).

Investors should be aware that 13F filings do not give a complete picture of a company’s holdings because the reports only include its positions in US stocks and US depository receipts, but they can still provide valuable information. Furthermore, the reports only reflect deals and holdings as of the latest portfolio deposit date, which may or may not be held by the reporting company today or even when this article was published.

The transfer of energy

Milestone boosted its position in Energy Transfer (ET, Financial) by 11.50% during the second quarter, bringing the total stake to 10.27 million shares. The position represents 6.43% of the equity portfolio and is now the sixth largest holding. GuruFocus estimates that Tepper lost 4.05% on the long-term investment.

The market value of the Dallas-based medium energy company is $36.25 billion. Its shares traded around $11.85 on Tuesday with a price-earnings ratio of 9.39, a price-to-book ratio of 1.12 and a price-to-sales ratio of 0.43.

GF قيمة value line
VALUE
Indicates that the stock is currently fairly valued based on historical ratios, past financial performance, and analysts' future earnings expectations.

GuruFocus rated Energy Transfer's financial strength 4 out of 10. In addition to covering weak interest, Altman's Z-Score drop of 1.33 warns the company that it may be at risk of bankruptcy in the near term. Weighted average cost of capital also overshadows return on invested capital, so it struggles to create value as it grows.

The company's profitability was better, with a rating of 7 out of 10 due to operating margin expansion, returns on equity, assets and capital that are more than half of its competitors and a high Piotroski F score of 7 out of 9, indicating that conditions are healthy. . Due to declining earnings per share in recent years, Energy Transfer's forecast rating of one star out of five is under review. According to GuruFocus, companies with this rank generate an average return of 1.1% per year over a 10-year period.

Among the educators investing in energy transmission, David Abrams (Trades, Portfolio) holds the largest stake with 0.72% of its outstanding shares. Leon Cooperman (Trade, Portfolio) and Francesco Garcia Parames (Trade, Portfolio) also have important positions in stocks.

EQT

The investor reduced its stake in EQT (EQT, Financial) by 27.57% during the quarter to 2.85 million shares. The holding represents 6.15% of the stock portfolio and is Tepper's seventh largest position. GuruFocus data shows that it has gained approximately 82.89% on investment since its inception in the fourth quarter of 2020.

The market capitalization of the natural gas producer, which is headquartered in Pittsburgh, is US$17.12 billion. Its shares were trading around $46.86 on Tuesday with a book price ratio of 1.89 and a sales price ratio of 1.68.

According to the GF value chart, the stock is currently highly overvalued.

EQT's financial strength is rated 5 out of 10 by GuruFocus. Although the company has issued new long-term debt in recent years, it is manageable due to adequate interest coverage. However, Altman's low Z-Score of 0.89 warns it may be in danger of bankruptcy. ROIC also outperforms WACC, so value is created.

The company's profitability posted a rating of 6 out of 10, driven by strong margins and returns that outperform the majority of its industry peers. The EQT also has a moderate Piotroski F score of 6, indicating that conditions are stable despite recording losses in operating income, and a predictability rank of 1 star.

With a 2.03% stake, Daniel Loeb (Trades, Portfolio) is the largest significant shareholder in EQT. Other large investors holding notable positions include Steve Mandel (Trade, Portfolio) and Jim Simmons (Professions, Portfolio)' Renaissance Technologies.

Occidental Petroleum

In the third quarter, Tepper reduced his stake in Occidental Petroleum Corporation (OXY, Financial) by 69.19% to 875,000 shares. The position represents 3.23% of the equity portfolio. According to GuruFocus, it has earned an estimated 189.04% on the investment so far.

The Houston-based oil and gas producer has a market capitalization of $58.07 billion. Its shares traded around $63.67 on Tuesday with a price-earnings ratio of 5.96, a price-to-book ratio of 3.21 and a sales-to-price ratio of 1.80.

Based on the GF value line, the stock appears to be somewhat overvalued at the moment.

GuruFocus rates Occidental's financial strength 5 out of 10. Despite having adequate interest coverage, an Altman Z-2.02 score indicates that it is under some pressure because assets are accumulating at a faster rate than revenue growth. However, the value is generated because ROIC bypasses WACC.

The company's profitability fared better with a rating of 7 out of 10, driven by strong margins and returns that outperform the majority of competitors. Occidental also has a high Piotroski F-Score of 7 and a prediction rating of 1 star.

Buffett is the company's largest shareholder with a 29.22% stake. Dodge & Cox, Smead Value Fund (Trades, Portfolio), and John Paulson (Trades, Portfolio) also have significant investments in Occidental.

Antero Resources

The teacher reduced its stake in Antero Resources (AR, Financial) by 27.85% in the second quarter. The position now owns 1.43 million shares and has a weighting of 2.74% in the equity portfolio. GuruFocus notes that Tepper has gained about 105.84% on investment since the first quarter of 2021.

The market capitalization of the oil and natural gas producer, headquartered in Denver, is $10.99 billion; Its shares traded around $36.80 on Tuesday with a price-earnings ratio of 13.36, a price-to-book ratio of 1.84 and a price-to-sales ratio of 1.52.

The GF value line suggests that the stock is significantly overvalued at the moment.

Antero's financial strength and profitability are both rated 5 out of 10 by GuruFocus. Although there is a comfortable level of interest coverage, the Altman Z-Score 1.690 warns that the company may be in danger of bankruptcy. The value is also generated because ROIC bypasses WACC.

The company is backed by higher margins and returns than the majority of similar companies. Antero also has a high Piotroski F score of 8 as well as a 1 star rating for prediction.

Among the educators investing in Antero Resources, Simons holds the largest stake with 1.17% of its outstanding shares. Loeb and Stephen Cohen (Trade, Portfolio), Ken Hebner (Trade, Portfolio) and Stanley Druckenmiller (Trade, Portfolio) also have significant holdings.

Enterprise Product Partners

Milestone reduced the holding of Enterprise Products Partners (EPD, Financial) by 4.89% to 777,980 shares. It represents 1.19% of the equity portfolio. Tepper has earned approximately 29.94% of the investment over its lifetime.

The Houston-based oil and gas company has a market capitalization of $55.72 billion. Its shares traded around $25.78 on Tuesday with a price-to-earnings ratio of 11.51, a price to book ratio of 2.16 and a sales price ratio of 1.09.

According to the GF value line, the stock is currently undervalued.

GuruFocus rated Enterprise Products Partners' financial strength 4 out of 10, driven by inadequate interest coverage and a low Altman Z-Score of 1.77 that warns the company risks bankruptcy if it doesn't improve liquidity. However, the company creates value because ROIC is higher than WACC.

The company's profitability fared better with a rating of 8 out of 10. In addition to expanding operating margin, Enterprise Products Partners has solid revenue that is more than half of its competitors. It also has a high Piotroski F score of 7 and an expectation rating of 1 star.

Bruce Berkowitz (Trades, Portfolio) is the company's largest shareholder with a 0.16% stake. First Eagle Investment (Crafts, Portfolio), Fairholme Fund (Crafts, Portfolio) and Fairholme Concentrated Income Fund (Trading, Portfolio) also have significant positions in enterprise product partners.

Disclosures

I/We do not have any trades in any of the mentioned stocks, and I have no plans to buy any new positions in the mentioned stocks within the next 72 hours.