Billionaire David Tepper’s 2023 Portfolio: Top 15 Stock Picks
In this piece, we will take a look at the top 15 stock picks in billionaire David Tepper's 2023 portfolio. For more stocks, head on over to Billionaire David Tepper's 2023 Portfolio: Top 15 Stock Picks.
After a tumultuous 2022 and a start to 2023 that saw markets focus on whether the Federal Reserve would finally end its interest rate hiking cycle and if this would cause a recession, over the past couple of months a new complication has made its way into the financial markets. This is the U.S. debt ceiling, and it sits right at the heart of the American economy and by extension, the global economy. The debt ceiling is decided by Congress, and it serves as a check for the executive branch - or the Treasury Department under the President - to limit the amount of money that it can borrow to meet debt repayments.
The back and forth between the president and Congress for this ceiling has often created turmoil in the financial market. In fact, this tussle also caused S&P Global Ratings to downgrade U.S. government debt to AA+ from AAA in 2011 - the first and only time in history that America received a downgrade which is often reserved for developing countries with fiscal mismanagement. The impact of this downgrade on the stock markets was immediate, with all major indexes declining by as much as seven percent in the aftermath.
So, what would happen to the economy if America were to default? Well, the government borrows money to fund a variety of programs and functions such as salaries and healthcare spending. This funnels money into the economy and stimulates productivity for a variety of businesses. In case of a default, this spending stops and a large amount of money is removed from the economy. How large? According to the investment bank Goldman Sachs, the event can cut up to ten percent of the American economy until the government figures out how to raise money. Perhaps ironically, a default also increases the risk premium that investors lending to the U.S. government demand for their money, which then spirals into higher costs of borrowing for the consumer (for instance for mortgages) and more interest payments that the government has to make on its debt. In broader terms, a Democratic Party think tank estimates that the economy can lose as many as three million jobs and a 30 year mortgage could cost an additional $130,000 to fund.
In this turmoil, how does one invest? Well, it's important to look at what hedge funds are doing especially since talk of the debt ceiling had started to emerge since January. Fortunately for us, hedge fund filings for the first quarter of this year have started to become available and one fund that is on our radar is billionaire David Tepper's Appaloosa Management. Mr. Tepper is one of the richest people in the world, with Forbes Magazine estimating his net worth at $18.5 billion as of May 2023. He set up the hedge fund in 1993 and since then it has grown to manage billions of dollars in funds, with our research suggesting a portfolio value of $1.8 billion as of Q1 2023. The billionaire has a business school named after him, and he started his career working in a steel company. Mr. Tepper's astute management at Goldman Sachs during the 1987 Black Monday stock market crash earned him laurels in the industry, as he bought debt that had dropped in value at the time but then recuperated the losses after the market recovered - resulting in gains for the investment bank.
Today, we'll look at Mr. Tepper's top stock picks as the clouds of recession remain on the horizon and lawmakers wonder if a default will really be that bad. Some top picks of the billionaire are Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG), and Uber Technologies, Inc. (NYSE:UBER).
Our Methodology
To compile our list of David Tepper's top stock picks, we took a look at Appaloosa Management's SEC filings for the first quarter of this year. Investments in exchange traded funds are excluded, but you can take a look at them here.
Billionaire David Tepper's 2023 Portfolio: Top 15 Stock Picks
15. Tesla, Inc. (NASDAQ:TSLA)
Appaloosa Management's Q1 2023 Investment: $31 million
Tesla, Inc. (NASDAQ:TSLA) is the largest electric vehicle manufacturer in the world. It is a new addition to Appaloosa Management's portfolio, with the firm disclosing a $31 million stake in the firm as of Q1 2023.
By the end of last year's fourth quarter, 91 of the 943 hedge funds part of Insider Monkey's database had bought a stake in Tesla, Inc. (NASDAQ:TSLA). In the succeeding quarter, the firm's largest investor is D.E. Shaw's D E Shaw with a $1.2 billion stake courtesy of 6.2 million shares.
14. HCA Healthcare, Inc. (NYSE:HCA)
Appaloosa Management's Q1 2023 Investment: $37.5 million
HCA Healthcare, Inc. (NYSE:HCA) is an American company headquartered in Nashville, Tennessee. The firm operates different kinds of hospitals and outpatient healthcare facilities.
64 of the 943 hedge funds surveyed by Insider Monkey had invested in the firm during Q4 2022. HCA Healthcare, Inc. (NYSE:HCA)'s largest hedge fund investor is Natixis Global Asset Management's Harris Associates since it owns 4.9 million shares that are worth $1.3 billion.
13. NVIDIA Corporation (NASDAQ:NVDA)
Appaloosa Management's Q1 2023 Investment: $41.6 million
NVIDIA Corporation (NASDAQ:NVDA) is another fresh addition to Appaloosa Management's portfolio. The hedge fund has a $41.6 million stake in the firm. NVIDIA Corporation (NASDAQ:NVDA) designs and sells graphics processing units for both public and commercial use.
Insider Monkey's December quarter of 2022 study of 943 hedge funds revealed that 106 had owned the firm's shares. As of March 2023, NVIDIA Corporation (NASDAQ:NVDA)'s largest investor is Ken Fisher's Fisher Asset Management with a $2.7 billion stake.
12. Salesforce, Inc. (NYSE:CRM)
Appaloosa Management's Q1 2023 Investment: $57.9 million
Salesforce, Inc. (NYSE:CRM) is a technology firm based in San Francisco, California. It is one of the leading providers of customer relationship management software enabling firms to generate insights by running analytics.
After digging through 943 hedge fund portfolios for 2022's final quarter, Insider Monkey found out that 117 had bought Salesforce, Inc. (NYSE:CRM)'s shares. Its largest shareholder is Ken Fisher's Fisher Asset Management with a $2.8 billion investment.
11. UnitedHealth Group Incorporated (NYSE:UNH)
Appaloosa Management's Q1 2023 Investment: $70.8 million
UnitedHealth Group Incorporated (NYSE:UNH) provides health benefit plans to a variety of customers as well as advisory and consulting services to hospitals and others. It was set up in 1977 and is based in Minnetonka, Minnesota.
By the end of Q4 2022, 110 of the 943 hedge funds part of Insider Monkey's database had invested in the company. By the end of Q1 2023, UnitedHealth Group Incorporated (NYSE:UNH)'s largest shareholder was Rajiv Jain's GQG Partners with a $2.2 billion stake.
10. Microsoft Corporation (NASDAQ:MSFT)
Appaloosa Management's Q1 2023 Investment: $74.9 million
Microsoft Corporation (NASDAQ:MSFT) is one of the largest consumer technology firms in the world. It designs and sells gadgets, provides cloud computing services, and sells an operating system and other software.
258 of the 943 hedge funds polled by Insider Monkey had bought Microsoft Corporation (NASDAQ:MSFT)'s shares during last year's fourth quarter. In the succeeding quarter, Michael Larson's Bill & Melinda Gates Foundation Trust was the firm's largest investor, owning 39.2 million shares worth $11 billion.
9. FedEx Corporation (NYSE:FDX)
Appaloosa Management's Q1 2023 Investment: $79.9 million
FedEx Corporation (NYSE:FDX) is a logistics and transportation company. Appaloosa Management bought a $79.9 million stake in the firm during 2023's March quarter, making it a fresh addition to the portfolio.
Insider Monkey scouted 943 hedge fund portfolios for 2022's final quarter to discover that 48 had invested in FedEx Corporation (NYSE:FDX). The firm's largest hedge fund shareholder is Ken Griffin's Citadel Investment Group with a $467 million stake.
8. EQT Corporation (NYSE:EQT)
Appaloosa Management's Q1 2023 Investment: $81.3 million
EQT Corporation (NYSE:EQT) is an energy company operating out of Pittsburgh, Pennsylvania. It has trillions of cubic feet of natural gas reserves.
As of Q4 2022, 56 of the 943 hedge funds surveyed by Insider Monkey had bought the firm's shares. EQT Corporation (NYSE:EQT)'s largest shareholder is Eric W. Mandelblatt's Soroban Capital Partners with a $199 million investment.
7. Macy's, Inc. (NYSE:M)
Appaloosa Management's Q1 2023 Investment: $104.9 million
Macy's, Inc. (NYSE:M) is a retail chain company that was set up in 1830 and is headquartered in New York, New York. The firm has stores all over the world.
Insider Monkey's December quarter of 2022 survey of 943 hedge funds revealed that 41 had held a stake in the retail company. By the end of March 2023, Macy's, Inc. (NYSE:M) largest investor was Peter Rathjens, Bruce Clarke, and John Campbell's Arrowstreet Capital holding a $184 million stake.
6. Energy Transfer (NYSE:ET)
Appaloosa Management's Q1 2023 Investment: $127.2 million
Energy Transfer (NYSE:ET) is a midstream oil and gas company. It was set up in 1995 and is based in Dallas, Texas.
38 of the 943 hedge funds part of Insider Monkey's database had bought Energy Transfer (NYSE:ET)'s shares in Q4 2022. The firm's largest investor is David Abrams' Abrams Capital Management since it owns 17.8 million shares that are worth $222 million.
Amazon.com, Inc. (NASDAQ:AMZN), Energy Transfer (NYSE:ET), Alphabet Inc. (NASDAQ:GOOG), and Uber Technologies, Inc. (NYSE:UBER) are some of David Tepper's best stocks for 2023.
Click to continue reading and see Billionaire David Tepper's 2023 Portfolio: Top 5 Stock Picks.
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Disclosure: None. Billionaire David Tepper's 2023 Portfolio: Top 15 Stock Picks is originally published on Insider Monkey.