Billionaire investment legend David Tepper was quite busy in the second quarter, as he added to his stake in a number of intriguing firms, many of which seem to trade at far less than the market multiple. Indeed, by following the moves of such smart money managers, one may get a closer look at where the real value is in the market at any given time.
Indeed, it’s fine to just bet on the broad market indices, but, as I’m sure you’ve heard many times now, the S&P is carrying a growing degree of concentration risk. So, unless you’re fine with more than 7% in Nvidia (NASDAQ:NVDA | NVDA Price Prediction) stock or closer to 14% for the Nasdaq 100 index, perhaps it’s best to pick and choose one’s own name so that their portfolio’s fate isn’t tied too closely to just a small basket of tech firms.
Of course, the 13-F filing typically emerges many months later, so investors should expect to pay a different price for entry into a name. Sometimes, one can get an even lower price than their favorite hedge fund manager. Other times, it’s costlier to punch a ticket and may not be worth doing, especially if a stock has gained significantly in the past few months.
Without further ado, let’s check out the trio of David Tepper’s recent buys so that investors can get a clue as to where the opportunities in today’s hot market still lie.
UnitedHealth Group
UnitedHealth Group (NYSE:UNH) was a top pick for hedge funds in the second quarter, attracting the smart money capital from a number of legends, including the great Warren Buffett, Michael Burry of Big Short fame, and, of course, David Tepper. Undoubtedly, UNH stock experienced a vicious sell-off in the first half of the year. The company that investors just love to hate cratered over 61% from peak to trough. Though shares recovered slightly, the stock is still down around 39% year to date. That’s a significant discount as investors await new details regarding the Department of Justice’s investigation.
Combined with managed care headwinds (rising medical expenses) and extreme negative momentum, you’d have to be a seasoned contrarian to even think about attempting to catch this falling knife. Still, I think investors are in good company at just over $310 per share. Shares go for 13.4 times trailing price-to-earnings (P/E), which seems cheap, but given there’s no relief in sight, investors should be ready to hold on for at least a couple of years for a meaningful margin recovery.
Given the beating UNH stock has taken, I think expectations are low enough that it makes sense to start doing some buying here. The smart money has spoken, and I think they’re right to be so collectively bullish on a firm that’s already sailed through the worst of the storm.
Nvidia
Nvidia may already be an obvious AI play, but investors are getting nervous, and with Jensen Huang already focused on next year’s innovations (think Rubin), I think it’s smart to buy into any weakness, as Tepper and other smart money managers have done this year.
Since the second quarter ended, shares have gained more than 20%. But with shares taking a breather following the disappointing data center results and growing fear about the possibility of an AI bubble, I do think investors may have another shot to pick up shares closer to their 52-week lows. Either way, the AI revolution is in full swing, and Nvidia will continue to play a big part in it over the coming three years as China’s DeepSeek looks to break ground in agentic AI by year’s end.
Intel
Intel (NASDAQ:INTC) is another smart deep-value bet made by Tepper in Q2. Shares have been soaring in the past month, now up close to 22%, thanks in part to news that the U.S. is taking a stake. Indeed, Intel has some catching up to do. And though I’m not buying the comeback plan just yet, I do think that investors are getting a lot of potential upside by buying at these historic depths.
The stock has shed 64% of its value and has been stuck in the penalty box as Intel’s rivals have skyrocketed. As America gets skin in the game, I do think it’s a mistake to bet against Intel, especially while shares are going for close to 1.0 times price-to-book (P/B).
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