David Tepper's Appaloosa is now the largest investor in Goodyear. Should you buy along with him?
Last year, David Tepper was the highest-paid hedge fund manager in the world, taking home $2.2 billion. That was because his $15 billion Appaloosa fund had winning trades in AIG, Qualcomm, Citigroup, United Continental, and Apple.
This year has also been a fantastic year for Tepper. Appaloosa is up 23.4% net of fees this year, 5.5% in the month of July alone. His returns on an annualized basis since he started two decades ago are 28%. That means investors who chipped in $1 million when he was just starting off in 1993 would have $149 million today.
In other words, David Tepper knows investing better than just about anyone.
So, what’s Appaloosa buying now? The fund’s most recent documents filed with the SEC give us a clue. Besides taking new positions in Hertz and a Warren Buffett favorite, Chicago Bridge and Iron, Tepper has increased his shares in Goodyear.
In fact, after buying 7 million shares of Goodyear, Appaloosa has boosted its stake in the tire company to 22 million shares worth $422 million. That makes Tepper Goodyear’s largest shareholder.
(Watch: Jos A. Bank activist letter)
So, if Tepper is buying Goodyear, should you buy with Tepper?
Kicking the tires for Talking Numbers is Steve Cortes, founder of Veracruz TJM, on the fundamentals. On the charts is Talking Numbers contributor Richard Ross, Global Technical Strategist at Auerbach Grayson.
Watch Cortes and Ross analyze Goodyear in the video above and decide if you should get behind the wheel with David Tepper on this stock.
Coming up Thursday: Part 2 of Ron Paul’s Talking Numbers interview – “Why the economy’s in trouble”!