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Holly LaFon
Holly LaFon
Articles (7846) 

David Einhorn Buys Google, Vodafone and Western Digital

February 15, 2013 | About:
David Einhorn, value investor and head of hedge fund Greenlight Capital, bought three new stocks in the fourth quarter: Google Inc. (NASDAQ:GOOG), Vodafone Group Plc (NASDAQ:VOD) and Western Digital Corp. (NASDAQ:WDC). Greenlight Capital since inception in May 1996 has returned 19.4% on annualized basis, net of fees and expenses, after underperforming the market being up 8.3% 2012. New Buys

Google Inc. (NASDAQ:GOOG)

Einhorn bought 63,000 shares of Google Inc. for an average price of $700 per share in the fourth quarter. Google shares on Friday are $792.20, touching an all-time high.

Google in the past five years has grown at the following rates per share: 22.9% for revenue, 17% for EBITDA, 21.8% for free cash flow and 25.5% for book value.

In 2012, its revenue grew to $50.2 billion, from $37.91 billion in 2011. Net income increased to $10.74 billion, from $9.74 billion. Google also has over $56 billion in cash on its balance sheet.

On Jan. 22, Google reported a 36% year-over-year increase in revenue to $14.42 billion. Net income was $2.89 billion, compared to $2.71 billion in the fourth quarter of 2011.

Google has a P/E of 23.78, P/B of 3.4 and P/S of 5.1.

Vodafone Group Plc (NASDAQ:VOD)

Einhorn bought 1.6 million shares of Vodafone for $27 per share on average in the fourth quarter.

Holding history:

Vodafone is a mobile communications company with a global presence with equity interests in more than 30 countries and more than 40 partner markets.

Vodafone has the following growth rates per share: 7.7% for revenue, 5.3% for eBITDA and 0.8% for book value. Free cash flow per share declined at a rate of 6.5%.

For the quarter ended Dec. 31, 2012, Vodafone reported £11.39 billion in revenue, a 2% decline from a year previously.

Vodafone has a P/E of 21.7, P/B of 1.2 and P/S of 1.87.

Western Digital Corp. (NASDAQ:WDC)

Einhorn bought 600,000 shares of Western Digital Corp for $37 per share on average. Western Digital shares on Friday afternoon are priced at $48.59. Einhorn owned the stock at much lower prices before, in 2008 and 2009:

Western Digital provides products and services that preserve digital content, such as storage devices, networking equipment and home entertainment products under the name brands of WD, HGST and G-Technology.

In the past five years some of its business fundamentals increased at the following rates: 9.5% for revenue, 14.1% for EBITDA, 23.3% for free cash flow and 27.4% for book value.

In the quarter ended Dec. 28, 2012, Western Digital reported $3.8 billion in revenue, up from $2 billion a year previously, and net income of $513 million, or $2.09 per share, compared to $145 million, or $2.09 per share, a year previously.

Western Digital has a P/E of 5.9, P/B of 1.4 and P/S of 0.78.

See David Einhorn’s portfolio here. Also check out the Undervalued Stocks, Top Growth Companies and High Yield stocks of David Einhorn.

Rating: 3.3/5 (3 votes)


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