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

February 17, 2014 | About:
Holly LaFon

Holly LaFon

249 followers

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:

“The parabolic rise of a growing number of market-leading story stocks created a challenging environment for value investors. Speculators have momentarily accepted the ruse that, for these visionary companies, profitability would be a mistake. Eventually, the market will remember that having a disruptive product that customers will happily buy if sold near cost is not the same as having a valuable business. Philosophically, since we would not expect to be long these high-fliers, the best we can hope to do is not be short them at the wrong time. For the most part, we weren’t.”

Einhorn purchased eight new stocks in the fourth quarter, for a total of 38 within his portfolio, which is valued at $7.3 billion. Slightly more than half is allocated in the tech sector.

Top New Buys

Anadarko Petroleum Corp (APC)

He bought 1.83 million Anadarko shares, giving the company a 2% portfolio weight. Shares cost $90 on average in quarter four.

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Anadarko Petroleum Corp was incorporated in the State of Delaware. Anadarko Petroleum Corp has a market cap of $41.04 billion; its shares were traded at around $81.54 with a P/E ratio of 23.30 and P/S ratio of 2.80. The dividend yield of Anadarko Petroleum Corp stocks is 0.70%. Anadarko Petroleum Corp had an annual average earnings growth of 1.40% over the past 10 years.

EMC Corp (EMC)

Einhorn purchased 2,892,185 shares of EMC Corp, a 1% portfolio weighting. Shares cost $24 on average in quarter four.

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EMC Corp is a Massachusetts corporation, incorporated in 1979. EMC Corp has a market cap of $52.27 billion; its shares were traded at around $25.40 with a P/E ratio of 20.40 and P/S ratio of 2.50. The dividend yield of EMC Corp stocks is 1.20%. EMC Corp had an annual average earnings growth of 18.80% over the past 10 years. GuruFocus rated EMC Corp the business predictability rank of 3-star.

Take-Two Interactive Software Inc. (TTWO)

Einhorn bought 4,163,272 Take-Two Interactive Software shares, for a 0.99% portfolio weight. Shares cost $17 on average in quarter four.

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Take-Two Interactive Software Inc. was incorporated under the laws of the State of Delaware in 1993. Take-two Interactive Software Inc. has a market cap of $1.87 billion; its shares were traded at around $19.11 with a P/E ratio of 6.70 and P/S ratio of 0.80.

McDermott International Inc. (MDR)

Einhorn purchased 7,843,005 shares of McDermott International, a 0.99% portfolio weight. Shares cost $8 on average in quarter four.

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McDermott International Inc. was incorporated under the laws of the Republic of Panama in 1959. McDermott International Inc. has a market cap of $2.04 billion; its shares were traded at around $8.61 with and P/S ratio of 0.70.

BP Plc (BP)

Einhorn purchased 980,000 BP Plc shares, a 0.65% portfolio weight. Shares cost $46 on average in quarter four.

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BP Plc operates as an integrated oil and gas company and is the parent company of the BP group of companies. Bp Plc has a market cap of $151.63 billion; its shares were traded at around $48.81 with a P/E ratio of 6.50 and P/S ratio of 0.40. The dividend yield of Bp Plc stocks is 4.60%.

See David Einhorn (Trades, Portfolio)’s portfolio here. Not a Premium Member of GuruFocus? Try it free for 7 days here!


Rating: 3.0/5 (4 votes)

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