Appaloosa Bets On Banks In Q4 2010

Feb 15 2011 | 8:26am ET

Appaloosa Management, David Tepper’s New Jersey-based hedge fund, is bullish on banks, according to a recent filing with the Securities and Exchange Commission.

The fund now holds stakes worth a combined $1.23 billion in the four biggest U.S. banks, having increased its holdings in the fourth quarter.

Appaloosa more than doubled its Citigroup stake to over 117 million shares (worth $576.9 million at Monday’s closing price.

The fund acquired a $25.2 million stake in J.P. Morgan Chase while upping its Bank of America stake 12% to 25.1 million shares worth $373.3 million. Appaloosa increased its Wells Fargo stake to 7.5 million common shares (from 6.4 million) and 335,482 preferred shares (from 292,019). The common stake would be worth $252.7 million at Monday’s closing price.

Appaloosa increased its SunTrust Banks holding by 8.9% to 4.2 million shares valued at $135.6 million and reported a small increase in its holdings in American Depositary Receipts of Spain's Banco Santander.

The fund reduced its Fifth Third Bancorp holdings by 8.4% to 9.5 million shares (value: $146.8 million) and cut its Capital One Financial common shares to 1.03 million ($54.1 million) from 1.43 million.

Tepper’s fund focuses on distressed debt and manages around $16 billion.

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