David Tepper’s Appaloosa Management hedge fund has dumped his entire Facebook Inc (NASDAQ:FB) investment, according to regulatory filings filed late Friday.
Tepper had previously held more than 1.62 million shares of the social networking giant, a holding that was valued at $186 million at the end of March. Appaloosa’s FB price-per-share averaged $105 during the first quarter of 2016. The social media company hit an all-time high of $128.33 late last month, making it one of the best-performing stocks in the Nasdaq 100 this year.
While Tepper’s FB stake liquidation may not be seen as a major vote of confidence in the Menlo Park, California-based company, the key for investors that want to own this stock is to focus on the big picture. Facebook is expected to end fiscal 2016 with revenue growth of more than 50%, an increase of 7% from 44% last year. Additionally, the company’s current year and next year EPS growth estimates stand at $3.94 and $5.03, respectively. Furthermore, Facebook – currently the sixth largest company in the world, with a market value of nearly $360 billion – expects 2017’s growth to come in over 34 percent. Moreover, Facebook being digital media’s best positioned name is totally crushing mobile like on one else. So, to make long story short, the combination of strong revenue growth and margin expansion ahead should keep the stock’s long-term upward trajectory volatile but definitely intact.
Facebook stock currently has a median Street price target of $155 with a high target of $185. Ticker is up 33.66% year-over-year, compared with a 4.5 percent gain in the S&P 500.
Getting back to Tepper’s trades, the 13F SEC filing also showed the billionaire’s fund dumping 945.000 shares of the troubled pharmaceutical firm Valeant Pharmaceuticals Int’l Inc (NYSE:VRX), worth $24.8 million during the same period. In the second quarter, the stakes of companies Tepper entirely liquidated included, the 6.99 million shares of banking giant Bank of America Corp (NYSE:BAC), the 2.5 million shares of Pfizer Inc. (NYSE:PFE), the 8.6 million shares of Delta Air Lines, Inc. (NYSE:DAL) and the 1.3 million shares of Houston, Texas-based oil and gas company Cabot Oil & Gas Corp (NYSE:COG) that the famed billionaire owned as of March 31.
It should be noted that Tepper significantly increased his stake in Dublin, Ireland-based pharma company Allergan plc (NYSE:AGN) during the second quarter. He held 1.3 million shares, or nearly $300 million worth of AGN stock at the end of Q2, the filings show, up from 300K shares, or around $75 million three months earlier. New positions consist of Western Digital Corp (NASDAQ:WDC) with 1.45 million shares, followed by Quorum Health Corp (NYSE:QHC) and US Foods Holding Corp (NYSE:USFD) with 771,436 shares and 739,675 shares, respectively.
Tepper’s Appaloosa Management hedge fund has returned a remarkable 26.70 percent since its inception in 1993. Hedge funds are required to disclose their long equity positions for each quarter in the 13Fs. They don’t have to disclose their shorts, or bets against stocks. Also, keep in mind, 13Fs, which are closely-watched across Wall Street for insights into the investment patterns of top hedgies, are six weeks old.
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