David Einhorn

David Einhorn

Last Update: 2014-02-14

Number of Stocks: 38
Number of New Stocks: 8

Total Value: $7,294 Mil
Q/Q Turnover: 15%

Countries: USA
Details: Top Buys | Top Sales | Top Holdings  Embed:

David Einhorn Watch

  • After Micron, David Einhorn Targets This Small Company

    David Einhorn (Trades, Portfolio)’s Greenlight Capital (GLRE) has recently released a preliminary proposal in which the business could acquire a small ethanol company called BioFuel Energy (BIOF). As a result, BioFuel’s shares have soared in after hours trading, showing an increase of more than 50%. Before this, David Einhorn (Trades, Portfolio) added Micron Technology (MU) to his portfolio. The DRAM maker will likely release its quarterly results on Thursday in which the company could post significant improvements in its revenues and income.


    Greenlight Capital has proposed to purchase the biofuel developer through a $275 million transaction, which involves cash and equity. In a letter addressed to BioFuel’s board, David Einhorn (Trades, Portfolio) and Jim Brickman of JBGL Funds said, “We believe that this proposal provides an opportunity for the Company and its stockholders to acquire an interest in a business with long term equity potential and an attractive portfolio of assets”

      


  • Low-P/E Stocks David Einhorn Just Added to His Portfolio

    In 2013, David Einhorn (Trades, Portfolio) of hedge fund Greenlight Capital returned 19.1%, lagging the S&P 500’s return of 31.55%. The value-oriented investor is no stranger to a stray underperforming year, however, on his way to achieving a 19.5% annualized return over the long run since his firm’s inception in 1996.

    Some of Einhorn’s undervalued stocks have yet to appreciate or overcome their short-term setbacks that have rendered negative reputations in the market, presenting low P/E opportunities. He bought two new low-P/E stocks in the fourth quarter.  


  • David Einhorn's New Stock Picks in 'Challenging Market'

    David Einhorn (Trades, Portfolio) had a lackluster 2013, with his firm returning 19.1%, compared to the S&P 500’s 32.4%, though his long positions slightly outperformed the benchmark index.


    The investor explained in his fourth quarter letter:

      


  • David Einhorn Comments on Airbus Group

    We closed out positions in Airbus Group (XPAR:AIR), formerly known as the European Aeronautic Defence& Space Company (France: EADS), and ThyssenKrupp (Germany: TKA)


    We bought the shares in EADS during a sell-off in response to the company’s unpopular proposal to buy BAE Systems in 2012. EADS ultimately abandoned the merger and insteadrepurchased a lot of stock while also reorganizing its corporate structure to reduce the influenceof several government shareholders. The shares rallied and we sold for a nice gain. We also bought TKA shares in 2012. Though management made significant progress in restructuring thecompany, a difficult external environment meant that asset sales and cash flow generation fellshort of their hopes and ours. We exited with a very small loss

      


  • David Einhorn Comments on Anadarko Petroleum

    APC (APC) is a global exploration and production company with a high-quality upstream portfolio comprised of U.S. onshore resources, deep-water Gulf of Mexico assets, and interests in other high-potential oil and gas basins around the world. The company also owns 91% of Western Gas Equity Partners (WGP), a publicly traded master limited partnership created in 2012 to hold APC's limited and general partner interests in Western Gas Partners (WES). In mid-December the company suffered a legal setback stemming from its 2006 acquisition of oil and gas assets from Kerr-McGee, whose titanium dioxide unit went bankrupt. With APC facing potential damages of $14 billion or $5 billion, investors dumped the shares, which we then acquired at an average cost of $78.55. Assuming a worst-case legal outcome, APC's core valuation net of its stake in WGP and its interest in an undeveloped, but valuable prospect in Mozambique, is less than 4x EBITDA. This is cheap compared to peers that lack APC's valuable upstream assets and exciting exploration prospects, but nonetheless trade at higher valuations. Our legal analysis suggests that the ultimate payment is likely to be the lesser of the two amounts and will be partly tax deductible. APC shares ended the quarter at $79.32.


    From David Einhorn (TradesPortfolio)'s fourth quarter 2013 commentary.

      


  • David Einhorn Comments on BP

    We established a position in BP (BP) at an average price of $47.39. The Deepwater Horizon oil spill was nearly four years ago. Since then, investors have focused on the ensuing legal cases regarding clean-up and restitution efforts, while overlooking BP’s improved return on capital inits core businesses. Allowing for more negative legal outcomes than BP has currently provisioned, we believe the company’s net asset value (NAV) is nearly $70 per share. It can therefore create substantial value by selling assets at or above NAV and using the income torepurchase stock at a significant discount. This is exactly what BP has been doing. Further, BP has restricted capital expenditures and increased dividends – all evidence of a more shareholder-friendly approach. As the legal issues subside, we expect the market to appreciate BP’s portfolio value and its improved capital allocation. In the meantime, we own an industry leader at 9x earnings with a 5% dividend yield. BP shares ended the quarter at $48.61.


    From David Einhorn (TradesPortfolio)'s fourth quarter 2013 commentary.

      


  • David Einhorn Comments on Micron Technologies

    MU (MU) is a manufacturer of semiconductor memory chips (DRAM and NAND flash). This isn't our first go-round with MU; it was a large short position from January 2001 to February 2005. Back then, DRAM was a lousy industry with too many competitors selling an undifferentiated product, often below cost. In the first quarter of 2001 when the shares were trading in the low $40s we wrote:


    MU is valued at 6.5x current run-rate revenues and, today, generates no profits. In its best year ever (fiscal 2000), MU recorded $2.52 per share of earnings, making the current price 17x the peak earnings of a cyclical, commodity manufacturer. In the previous two years, MU lost money.

      


  • David Einhorn Discloses Positions in Micron Tech, Anadarko Petroleum

    Greenlight Re investor David Einhorn (Trades, Portfolio) disclosed in his fourth quarter letter today new positions in Micron Technology (MU), BP plc (BP) and Anadarko Petroleum (APC).


    Einhorn described the position in Micron as “large” and the BP and Anadarko purchased as “medium-sized.” The long Micron position actually signals a reversal of a large prior short position Greenlight took from January 2001 to February 2005. That position was immensely profitable. During the period Einhorn held the short position, Micron’s share price plunged about 74%.

      


  • Greenlight Capital Q4 2013 Investor Letter



  • David Einhorn on the Federal Reserve



  • Greenlight Capital Gives OAK Red Light, Trims Others in Third Quarter

    The updated portfolio of David Einhorn of Greenlight Capital includes 30 stocks, three of them new, a total value at $5.63 billion, with a quarter-over-quarter turnover of 3%. The portfolio is weighted with top three sectors: technology at 40.4%, consumer cyclical at 18.5% and health care at 12.6%. The stocks bought by David Einhorn are averaging a 12-month return of 33.35%.

    Guru Einhorn sold out his holding in Oaktree Capital Group LLC, which recently reported the formation of a new equally-owned joint venture with China Cinda Asset Management Co. Ltd. The companies will jointly invest in distressed assets in China and work together in similar markets outside China.  


  • David Einhorn on Apple, New Idea Micron

    Greenlight Capital investor David Einhorn tells CNBC he is still long Apple (AAPL) and his best new idea is Micron Technology (MU).

      


  • David Einhorn’s New Stocks – TPX, XON, NVR

    David Einhorn, founder of Greenlight Capital, bought three new stocks in the third quarter: Tempur Sealy International Inc. (TPX), Intrexon Corp. (XON) and NVR Inc. (NVR). Einhorn’s third quarter portfolio contained 30 stocks, with 3% quarter-over-quarter turnover, and a value of $5.63 billion.

    Chart of his performance:  


  • David Einhorn on Global Economy and QE2



  • David Einhorn Comments on Gjensidige Forsikring

    We exited two successful long positions in the quarter. We invested in Gjensidige Forsikring (Norway: GJF), a P&C insurer, when it IPO’d in the fourth quarter of 2010. The story played out nicely as the company executed on its IPO plan to improve its underwriting, cost management,and capital discipline. We sold when GJF reached a fair valuation and we earned a 27% IRR over three years.  


  • David Einhorn Comments on Osram Licht



  • David Einhorn Comments on Green Mountain Coffee Roasters

    We added to our short position in Green Mountain Coffee Roasters (GMCR). Although the company again missed the consensus estimate for sales, bullish analysts scrambled to lower forward revenue forecasts while insisting that all is well in mudville. Attention quickly shifted away from the results when new CEO Brian Kelley announced on the Q3 earnings call that GMCR would hold its first ever investor day in September. When asked what prompted the decision, Mr. Kelley said, "I think a number of people on our team have found that an investor day that is crisp, but thorough on the key issues can be very valuable to help people understand our company. And I think it's – that's the core purpose is to help you understand our company better.

    "The evening before the invitation-only event on September 10, the New York Times reported that there was a large discrepancy between the number of K-Cups the company says it has sold and the numbers implied using data from the tracking firm IRI. For years there have been questions about misconduct within GMCR's distribution and accounting departments. This new information raised the possibility that this activity is continuing, with GMCR potentially booking hundreds of millions of dollars of non-existent K-Cup sales.  


  • David Einhorn Comments on Chipotle Mexican Grill

    But even in conventionally valued stocks where the fundamentals have largely gone our way, it has been hard to make money on shorts. In many cases we’ve lost money. Let’s consider Chipotle Mexican Grill (CMG). In recent years through the end of 2011, CMG and other upstarts in the fast-casual restaurant segment achieved substantial growth by offering consumers a higher quality menu than is typically found in fast-food chains. In contrast, Taco Bell (the largest Mexican fast-food chain) had lackluster and often negative growth. In early 2012, Taco Bell expanded its offerings to include new gourmet-style dishes as part of its Cantina Bell menu and introduced Doritos Locos Tacos. We believed that these innovations would enable Taco Bell to recapture market share from CMG. This is exactly what happened:

    Notably, CMG’s comparable store sales benefit by about 2.5% per year because the company has a large number of new stores entering the comp base each year, which naturally ramp their volumes. Since Taco Bell has a mature store base, its comparable store sales don’t share that tailwind.  


  • David Einhorn Comments on Vodafone

    Vodafone (VOD) shares advanced from £.88 to £2.16. The highlight was the announced sale of its 45%minority interest in Verizon Wireless for $130 billion. Upon completion, VOD will be predominantly a European wireless carrier with a network and spectrum that leave it better positioned for growth than its peers. At 4.5x 2014 EBITDA, the VOD "stub" trades at a notablediscount to its sector and is a possible acquisition candidate.

    From David Einhorn’s Greenlight Capital third quarter 2013 letter.  


  • David Einhorn Comments on Apple

    Apple (AAPL) shares advanced from $397 to $477 as earnings estimates stopped falling and the market turned its attention to AAPL’s new products. The newly introduced iPhone 5s gives customers a compelling reason to upgrade. It looks like it will be a hit, and we believe that AAPL will find novel ways to use Touch ID and iBeacon to monetize its user base and ecosystem via new service offerings and apps. AAPL’s current non-hardware e-commerce business (sales from iTunes, AppStore and iBook Store, plus software and services) is $16 billion a year and growing. Not only is it growing faster than Amazon, AAPL makes more money in non-hardware e-commerce alone than Amazon makes in its entire business. That gap will likely widen in AAPL’s favor as AAPL rolls out new offerings and services. We believe that near-term share performance will track the success of the new phones, while the longer-term share price will reflect the market’s eventual understanding of AAPL’s strong ability to earn high-margin and recurring revenue streams.

    From David Einhorn’s Greenlight Capital third quarter 2013 letter.  


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