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Early Movers for Feb. 7, 2013
Posted by: earningsyield (IP Logged)
Date: February 7, 2013 09:57AM

Markets remain mixed and are looking for a direction. At a Shiller P/E of 22.8, well above its mean of 16.5, I’m not exactly rushing out to buy new stocks. Shares of Apple (AAPL) are in the spotlight following comments made by Greenlight Capital’s David Einhorn in his letter to shareholders and his early appearance on CNBC.

Einhorn is looking to unlock some of the value out of Apple’s cash-rich balance sheet. In his interview with CNBC, Einhorn stated that Apple can unlock $320 per share in value assuming no P/E expansion. Every $50 billion of perpetual preferred stock distributed would unlock an estimated $32 per share in value. Apple is in the midst of a bulls versus bears battle as it has seen its stock decline from $700 to $450 in the past year. While its stock has declined, its cash on its balance sheet has ballooned to $130 billion.

Gurus who have recently added to their stake in Apple include Daniel Loeb, Whitney Tilson, Ken Fisher, George Soros, Andreas Halvorsen. Frank Sands, John Burbank and John Keeley. Daniel Loeb’s position is the most significant as it has a 3.77% impact to the Third Point portfolio followed by Whitney Tilson, for whom Apple has a 2.19% impact to the T2 Partners' portfolio.

Recently, David Einhorn reduced his stake in Apple, but that might change when his portfolio is updated as he did mention on CNBC, “We own more Apple today than ever before.” Apple currently has a 12% impact to the Greenlight Capital portfolio.

Other morning movers include companies who reported earnings. They include:

Visa (V) - Reported $1.82 per share for its fiscal fourth quarter versus estimates of $1.79 per share. It’s the ninth straight quarter the company beat analysts' expectations.Total operating revenue rose 12% to $2.85 billion, led by gains in service, data processing and international transactions. It has been a mixed bag with Gurus and Visa as the stock has gone straight up ever since its IPO. Brave Warrior Capital’s Glenn Greenberg recently sold out of Visa but Ken Fisher and John Hussman have recently added and bought Visa. Neither of their stakes are significant.

Staying on the Einhorn front, Green Mountain Coffee Roasters (GMCR), which Einhorn has a much publicized short, reported fourth quarter EPS of $0.76 per share or 11 cents above estimates but lowered its forecast for revenues in the first quarter. The company is facing stiff competition from low-cost rivals after some Keurig patents expired. Two Gurus have recently sold out of GMCR with no major purchases being made in the past nine months. Those two Gurus who have sold out are Lone Pine Capital’s Steve Mandel and Maverick Capital’s Lee Ainslie. Before selling their positions, GMCR had an (estimated)1.5% impact to their portfolio.

Shares of Sprint Nextel (S) are slightly lower as the company reported a fourth quarter loss of $0.44 per share, which was smaller than the $0.46 loss analysts were expecting. The increase was attributed to customers switching to higher paying smartphone plans. The company activated 2.2 million Apple (AAPL) smartphones during the quarter. Gurus have quietly added to shares of the cell phone carrier but no position is significant. Gurus who have recently added to Spring include Ken Fisher, Leon Cooperman and Dodge & Cox. Leon Cooperman’s stake has a 4.7% impact to the Omega Advisors' portfolio.

Disclosure: None

Guru Discussed: Ken Fisher: Current Portfolio, Stock Picks
Whitney Tilson: Current Portfolio, Stock Picks
Stocks Discussed: AAPL, V, GMCR, S,
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