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5 Stocks Top Earners Steven Cohen and David Tepper Agree On

The hedge fund giants both raked in over $1 billion in 2019 Continue reading... Read More...

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="On March 25, the 19th annual Institutional Investor's Rich List revealed that hedge fund giants Steven Cohen (Trades, Portfolio), head of Point72 Asset Management, and Appaloosa Management’s David Tepper (Trades, Portfolio) were among the biggest earners in 2019.” data-reactid=”12″>On March 25, the 19th annual Institutional Investor’s Rich List revealed that hedge fund giants Steven Cohen (Trades, Portfolio), head of Point72 Asset Management, and Appaloosa Management’s David Tepper (Trades, Portfolio) were among the biggest earners in 2019.

The list, which is composed of the highest-earning managers for the 12-month period, found that the top 25 hedge funds made a combined $20.2 billion last year, the most since 2013.

Other top investors followed by GuruFocus that made the top 10 were Jim Simons (Trades, Portfolio), the head of Renaissance Technologies, Ray Dalio (Trades, Portfolio)’s Bridgewater Associates, Tiger Global Management founder Chase Coleman (Trades, Portfolio) and Lone Pine Capital’s Steve Mandel (Trades, Portfolio).

Tied for sixth place, Cohen and Tepper each raked in $1.3 billion in 2019. As a result of their strong performance, investors may be interested in knowing where the two gurus are investing.

Cohen’s Stamford, Connecticut-based firm executes a long-short strategy that involves fundamental, bottom-up research processes, macro investments and insights to generate superior risk-adjusted returns.

In contrast, Tepper, who revealed in an interview earlier this week he is “nibbling” at technology and health care stocks in the wake of the recent market decline, specializes in distressed debt. He announced late last year he will be returning money to investors and converting his New Jersey-based hedge fund into a family office.

While Cohen and Tepper have slightly different approaches to investing, they have several holdings in common. According to the GuruFocus Aggregated Portfolio, a Premium feature, the two gurus both had positions in Amazon.com Inc. (NASDAQ:AMZN), Alibaba Group Holding Ltd. (NYSE:BABA), Micron Technology Inc. (NASDAQ:MU), Salesforce.com Inc. (NYSE:CRM) and UnitedHealth Group Inc. (NYSE:UNH), among several other stocks, as of the end of fourth-quarter 2019.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Amazon” data-reactid=”25″>Amazon

In the fourth quarter, Tepper upped his Amazon holding by 10%, while Cohen boosted his position by 57.49%. They have a combined equity portfolio weight of 15.60% in the stock.

The Seattle-based e-commerce company has a $948.49 billion market cap; its shares were trading around $1,911.80 on Thursday with a price-earnings ratio of 82.93, a price-book ratio of 15.31 and a price-sales ratio of 3.43.

The Peter Lynch chart shows the stock is trading higher than its fair value, suggesting it is overpriced.

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GuruFocus estimates Cohen has gained 30.95% on his investment since the first quarter of 2017, while Tepper has accrued a return of 9.64% since the first quarter of 2019.

Of the many gurus invested in Amazon, Ken Fisher (Trades, Portfolio) has the largest stake with 0.35% of outstanding shares. Other top investors include Frank Sands (Trades, Portfolio), Spiros Segalas (Trades, Portfolio), Pioneer Investments (Trades, Portfolio), Andreas Halvorsen (Trades, Portfolio), Coleman, Chris Davis (Trades, Portfolio), Warren Buffett (Trades, Portfolio), Mandel and Simons’ firm.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Alibaba” data-reactid=”42″>Alibaba

During the fourth quarter, Cohen reduced his Alibaba stake by 36.17% and Tepper boosted his position by 84.62%. They have a combined equity portfolio weight of 14.92% in the stock.

The Chinese e-commerce company has a market cap of $517.58 billion; its shares were trading around $192.28 on Thursday with a price-earnings ratio of 20.46, a price-book ratio of 4.8 and a price-sales ratio of 7.14.

According to the Peter Lynch chart, the stock is overvalued.

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Since establishing the position in first-quarter 2017, GuruFocus estimates Cohen has gained 14.93% on the investment. Tepper has gained approximately 15.12% since the third quarter of 2019.

Of the gurus invested in Alibaba, PRIMECAP Management (Trades, Portfolio) has the largest stake with 0.56% of outstanding shares. Fisher, Sands, Mandel, Pioneer, Segalas, Davis and several other gurus also have positions in the stock.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Micron Technology” data-reactid=”63″>Micron Technology

Cohen boosted his Micron position by 5.66% in the fourth quarter, while Tepper beefed up his stake by 35%. They have a combined portfolio weight of 11.58% in the stock.

The chipmaker, which is headquartered in Boise, Idaho, has a $48.72 billion market cap; its shares were trading around $44.12 on Thursday with a price-earnings ratio of 14.21, a price-book ratio of 1.33 and a price-sales ratio of 2.41.

Based on the Peter Lynch chart, the stock appears to be trading near its fair value.

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GuruFocus data shows Cohen has gained an estimated 36% on his investment since the second quarter of 2019. Tepper’s investment has returned roughly -0.32% since the fourth quarter of 2016.

PRIMECAP is the company’s largest guru shareholder with 5.03% of outstanding shares. Other top guru investors include the Parnassus Endeavor Fund (Trades, Portfolio), Pioneer, Simons’ firm, Donald Smith (Trades, Portfolio) and Mohnish Pabrai (Trades, Portfolio).

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Salesforce” data-reactid=”80″>Salesforce

Tepper left his Amazon holding unchanged in the fourth quarter, while Cohen boosted his stake by 925.64%. The gurus have a combined portfolio weight of 3.03% in the stock.

The San Francisco-based software company, which offers a suite of cloud-based customer relationship management products, has a market cap of $135.86 billion; its shares were trading around $149.45 on Thursday with a price-earnings ratio of 757.8, a price-book ratio of 4.09 and a price-sales ratio of 7.5.

The Peter Lynch chart suggests the stock is overvalued.

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According to GuruFocus, Cohen has gained roughly 8.2% on his investment since the second quarter of 2019. GuruFocus data shows Tepper’s investment has declined 2.09% since the first quarter of 2019.

With a 0.88% stake, Segalas has the largest position in Salesforce. Other top guru shareholders include Fisher, Sands, Halvorsen, Mandel, Al Gore (Trades, Portfolio), Daniel Loeb (Trades, Portfolio), Pioneer, Coleman, David Carlson (Trades, Portfolio), Simons’ firm, Philippe Laffont (Trades, Portfolio), Wallace Weitz (Trades, Portfolio), Louis Moore Bacon (Trades, Portfolio), PRIMECAP, Ron Baron (Trades, Portfolio) and First Pacific Advisors (Trades, Portfolio).

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="UnitedHealth Group” data-reactid=”97″>UnitedHealth Group

Cohen upped his position in UnitedHealth by 2,075.53% in the fourth quarter, while Tepper boosted his holding by 20%. The stock has a combined weight of 2.80% in their equity portfolios.

The managed health care company, which is headquartered in Minnetonka, Minnesota, has a $228.38 billion market cap; its shares were trading around $241.92 on Thursday with a price-earnings ratio of 17.18, a price-book ratio of 4.06 and a price-sales ratio of 1.

According to the Peter Lynch chart, the stock is overvalued.

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GuruFocus data indicates Cohen has gained an estimated 1.88% on his investment since the third quarter of 2019. Since first-quarter 2017, Tepper has gained roughly 30.58%.

The Vanguard Health Care Fund (Trades, Portfolio) is the company’s largest guru shareholder with 1.01% of outstanding shares. Dodge & Cox, Mandel, Barrow, Hanley, Mewhinney & Strauss, Jeremy Grantham (Trades, Portfolio), Pioneer, Halvorsen, Mairs and Power (Trades, Portfolio), Larry Robbins (Trades, Portfolio) and several other gurus also have positions in the stock.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Additional common holdings and portfolio composition” data-reactid=”114″>Additional common holdings and portfolio composition

Other stocks Cohen and Tepper both owned as of Dec. 31, 2019 were Adobe Inc. (NASDAQ:ADBE), T-Mobile US Inc. (NASDAQ:TMUS), Humana Inc. (NYSE:HUM) and Intelsat SA (NYSE:I).

Cohen’s $19.02 billion equity portfolio, which was composed of 917 stocks as of the end of the fourth quarter, was largely invested in the technology, consumer cyclical and health care sectors.

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Nearly 60% of Tepper’s $3.94 billion equity portfolio, which was composed of 22 stocks for the same period, was invested in the communication services and consumer cyclical sectors.

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Disclosure: No positions.

Read more here:

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  • David Abrams Accelerates Stake in Asbury Automotive

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