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Holly LaFon
Holly LaFon
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David Einhorn Buys Buffett’s Monsanto, Retail, Apple in Q4

Greenlight investor follows and diverges from crowd

February 15, 2017 | About:

David Einhorn (Trades, Portfolio) matched some big investors and diverged from the majority in his fourth-quarter buying activity.

Einhorn is known for adhering to picking stocks that look cheap based on fundamental analysis, having contrarian opinions and waging short-selling campaigns. Often celebrated for his value investing prowess, in 2016 he swung back to a 7.2% return after a challenging year in 2015 in which he lost 20.2%. Since its inception in 1996, Einhorn’s Greenlight Capital hedge fund has returned 16.1% and has had only two down years in its history.

The investor’s portfolio listed 33 long positions valued around $5.82 billion at quarter-end. Its biggest sector, consumer cyclical, encompasses 35.5%, followed by industrials at 20.5%.

In his portfolio filing released yesterday evening, he reported buying the same stock as Warren Buffett (Trades, Portfolio) and Prem Watsa (Trades, Portfolio), Monsanto Co. (NYSE:MON). While big-box retailers have been ailing in recent months, he also bought Fred’s Inc. (NASDAQ:FRED) and added to a stake in Rite Aid Corp. (NYSE:RAD). Finally, he bought another agriculture company, Syngenta (NYSE:SYT) and metals company Alcoa (NYSE:AA) and added to his largest position, Apple (NASDAQ:AAPL).

Highlight portfolio updates

Syngenta AG (NYSE:SYT)

Einhorn bought 925,000 shares of Syngenta in his largest new buy, making it 1.26% of the portfolio. The stock traded for an average price of $81 per share.

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Syngenta has a market cap of $39.71 billion; its shares were traded around $85.44 with a P/E ratio of 34.34 and P/S ratio of 2.98. The trailing 12-month dividend yield of Syngenta stocks is 2.69%. The forward dividend yield of Syngenta stocks is 2.68%. Syngenta had an annual average earnings growth of 0.40% over the past 10 years.

Monsanto (NYSE:MON)

Einhorn bought 410,000 shares of Monsanto, making it 0.74% of the portfolio. The stock traded for an average price of $103 per share.

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Monsanto has a market cap of $47.82 billion; its shares were traded around $109.05 with a P/E ratio of 29.47 and P/S ratio of 3.47. The trailing 12-month dividend yield of Monsanto stocks is 1.99%. The forward dividend yield of Monsanto stocks is 2.01%. Monsanto had an annual average earnings growth of 9.40% over the past 10 years. GuruFocus rated Monsanto the business predictability rank of 3.5-star.

Alcoa Corp. (NYSE:AA)

Einhorn bought 1.275 million shares of Alcoa, making it 0.62% of the portfolio. The stock traded for an average price of $28.

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Alcoa has a market cap of $6.94 billion; its shares were traded around $37.93 with and P/S ratio of 0.73.

Fred’s Inc. (NASDAQ:FRED)

Einhorn bought 1.5 million shares of Fred’s, making it 0.48% of the portfolio. The stock traded for an average price of $11.

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Fred's has a market cap of $647.520 million; its shares were traded around $17.08 with and P/S ratio of 0.28. The trailing 12-month dividend yield of Fred's stocks is 1.42%. The forward dividend yield of Fred's stocks is 1.5%.

Rite Aid Corp. (NYSE:RAD)

Einhorn increased his stake in defensive retailer Rite Aid by 52.22%, buying 7,019,927 shares for a total of 20,462,962 shares. Rite Aid is 2.9% of his portfolio.

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Rite Aid has a market cap of $6.11 billion; its shares were traded around $5.81 with a P/E ratio of 72.64 and P/S ratio of 0.18. Rite Aid had an annual average earnings growth of 17.20% over the past five years.

Apple Inc. (NASDAQ:AAPL)

Einhorn increased his stake in his largest position, Apple, by 11.81%, buying 613,300 shares for a total of 5,807,740 shares. The holding is 11.56% of his portfolio.

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Apple has a market cap of $709.7 billion; its shares were traded around $135.27 with a P/E ratio of 16.18 and P/S ratio of 3.41. The trailing 12-month dividend yield of Apple stocks is 1.68%. The forward dividend yield of Apple stocks is 1.69%. Apple had an annual average earnings growth of 42.5% over the past 10 years. GuruFocus rated Apple the business predictability rank of 3-star.

See David Einhorn (Trades, Portfolio)’s portfolio here.


Rating: 5.0/5 (1 vote)

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GuruFocus has detected 4 Warning Signs with Monsanto Co $MON.
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