There is no dispute of Einhorn’s reputation as a savvy investment manager. In the second quarter, according to his letter to shareholders, the three funds (Greenlight Capital, L.P., Greenlight Capital Qualified, L.P. and Greenlight Capital Offshore) returned 16.3, 14.7, and 11.9% net of fees and expenses, respectively. For the first half of the year,, the three funds returned 21.5%, 19.7% and 17.3%, respectively, outperforming the S&P500 index by a large margin.
But, if he did not change his investment outlook after the second quarter and he did what he said, Einhorn may not repeating his performance for the current quarter. In a [url= http://www.gurufocus.com/forum/read.php?1,57102,57102#msg-57102]Bloomberg[/url] write-up, Einhorn is quoted to be telling clients the stock market rally won’t last because of the economy. In deed in the 2Q09 Letter to Partners, he was trimming long equity positions as they recovered and he bought some puts for S&P index.
So David Einhorn is a guy of negative view towards long positions, at least as of June 30, 2009. Contrarian view tells us to pay special attention on the long positions he currently held (as of June 30, 2009, that is). There are his top five holdings: Pfizer Inc (PFE), URS Corp. (URS), TERADATA CORP (TDC), Wyeth (WYE), and Cardinal Health Inc. (CAH),
No. 1: Pfizer Inc (PFE), Weighting: 6.51% - 11,987,000 Shares
Pfizer Inc is a research-based global pharmaceutical company. Pfizer Inc has a market cap of $110.28 billion; its shares were traded at around $16.34 with a P/E ratio of 7.2 and P/S ratio of 2.3. The dividend yield of Pfizer Inc stocks is 3.9%. Pfizer Inc had an annual average earning growth of 11% over the past 10 years. GuruFocus ranked the business predictability of Pfizer Inc 2.5-star.
Einhorn bought 5.9 million shares in 1Q09 and upped his position to 12.0 million shares in 2Q09.
No. 2: URS Corp. (URS), Weighting: 5.73% - 3,194,924 Shares
URS Corporation offers a broad range of planning, design and program, and construction management services for transportation, hazardous waste, industrial processing and petrochemical, general building and water/wastewater projects. URS Corp. has a market cap of $3.82 billion; its shares were traded at around $45.3 with a P/E ratio of 15.1 and P/S ratio of 0.4.
Einhorn entered a 1.0 million position in 2Q07 and increased his stake to a peak of 4.7 million shares as of 4Q08. For the past two quarters, he has been selling the stock, and as of June 30, 2009, he has 3.2 million shares.
No. 3: TERADATA CORP (TDC), Weighting: 5.26% - 6,205,017 Shares
Teradata Corporation is a company focused on raising intelligence through data warehousing and enterprise analytics. Teradata Corp has a market cap of $4.53 billion; its shares were traded at around $26.39 with a P/E ratio of 18.4 and P/S ratio of 2.6.
Einhorn entered a significant position of 3.8 million shares in 2Q08 and has increased his stake to 6.9 million through 1Q09. But he was seen shedding shares last quarter to 6.2 million shares.
No. 4: Wyeth (WYE), Weighting: 4.7% - 2,860,000 Shares
Wyeth is one of the world's largest research-driven pharmaceutical and health care products companies. Wyeth has a market cap of $64.16 billion; its shares were traded at around $48.06 with a P/E ratio of 13.5 and P/S ratio of 2.8. The dividend yield of Wyeth stocks is 2.5%. Wyeth had an annual average earning growth of 5.8% over the past 10 years.
Wyeth is being acquired by Pfizer and it is interesting to see Einhorn bought both. He bought a small position of 300,000 shares way back in 3Q2002. In 1Q09, he increased his position to 1.43 million shares and in 2Q09 he doubled his position to 2.86 million shares.
No. 5: Cardinal Health Inc. (CAH), Weighting: 4.39% - 3,971,173 Shares
Cardinal Health Inc. is one of the leading providers of products and services to healthcare providers and manufacturers to help them improve the efficiency and quality of healthcare. These services and products include Pharmaceutical Distribution and Provider Services Medical-Surgical Products and Services Pharmaceutical Technologies and Services and Automation and Information Services. Cardinal Health Inc. has a market cap of $9.45 billion; its shares were traded at around $26.28 with a P/E ratio of 7.5 and P/S ratio of 0.1. The dividend yield of Cardinal Health Inc. stocks is 5.5%. Cardinal Health Inc. had an annual average earning growth of 10.7% over the past 10 years. GuruFocus ranked the business predictability of Cardinal Health Inc. 3-star.
Since Einhorn owns drug companies Pfizer and Wyeth, he might as well also own the company distributing drugs. Einhorn bought 4.0 million shares of CAH in 2Q09. It is interesting to see one investment idea leading to another one.
As of the end of 2Q09, David Einhorn is generally negative towards equity. But he still owned a bunch, among them, the drug companies and the company distribution drugs.
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