Tepper's Appaloosa Makes Big Bets on Energy Stock Rebound

Feb 12 2016 | 11:02pm ET

Securities filings show David Tepper's Appaloosa Management made new bets on the beleaguered energy sector during the fourth quarter, taking positions in a wide range of stocks such Kinder Morgan, Southwestern Energy, Freeport-McMoRan and Williams Partners.

Tepper bought 9.4 million shares of Kinder Morgan, according to Appaloosa’s latest 13F filing, as well as 4.3 million shares of exploration company Southwestern Energy. Kinder Morgan is essentially flat year to date despite the carnage in the energy markets, while Southwestern’s shares are up 25%.

Not all the newly-disclosed positions have worked well this year. The 13F also revealed that Tepper bought 2.3 million shares of energy infrastructure and pipeline specialist Williams Partners LP, which is down by nearly half so far in 2016, 3.5 million shares of natural resources company Freeport-McMoRan, down 18%, and and 5.9 million shares of the Alerian MLP ETF, down 29%.

All told, Appaloosa has devoted some 12% of its U.S. public equity exposure to energy, betting that the oversold stocks will rebound along with the price of oil. It also increased its stake in Alphabet and exited six positions including JetBlue, the 13F revealed.

Tepper started Appaloosa Management in 1993. It has grown to be among the most successful hedge funds in the world, with assets under management of $18 billion. 

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