Here's What Greenlight's David Einhorn Has Bought and Sold
Nov 19th 2012 10:03PM
Updated Nov 19th 2012 10:16PM
Every quarter, many money managers have to disclose what they've bought and sold, via "13-F" filings. Their latest moves can shine a bright light on smart stock picks.
Today let's look at highly regarded value investor David Einhorn and Greenlight Capital, which he founded. Einhorn's investing success, as well as his advocacy of financial transparency and accountability, has attracted many fans. Although he isn't afraid to short stocks, he prefers going long and looks for situations where he feels a stock is mispriced.
The company's reportable stock portfolio totaled $6.0 billion in value as of Sept. 30, 2012.
So what does Greenlight's latest quarterly 13-F filing tell us? Here are a few interesting details.
The biggest new holding is Yahoo! (NAS: YHOO) . The company recently posted encouraging quarterly results, but its new CEO, Marissa Mayer, still has her work cut out for her. There have been rumors lately that the company might partner with Facebook (NAS: FB) , perhaps to provide search capability, but that's in dispute -- and Yahoo! is already in a search partnership with Microsoft (NAS: MSFT) . Meanwhile, Mayer is reportedly reviewing the bottom 20% of Yahoo!'s workforce, with downsizing a possibility.
Among holdings in which Greenlight increased its stake were Cigna (NYS: CI) , General Motors (NYS: GM) , Computer Sciences (NYS: CSC) , and Marvell Technology (NAS: MRVL) . Chipmaker Marvell took a 15% hit on reporting disappointing second-quarter earnings, and third-quarter earnings featured revenue and earnings sharply down, with the company citing weak PC demand. Some are hopeful about Marvell's partnership with LED specialist Cree (NAS: CREE) to produce a dimmable LED bulb, but others would like to see it profit more from the spread of smartphones.
Greenlight reduced its stake in companies such as Apple (NAS: AAPL) , Seagate Technology (NAS: STX) , and Sprint Nextel (NYS: S) . Seagate is poised to profit from increasing storage demand from both consumers with PCs and the servers of cloud-computing companies. Input prices can be volatile, though, and it does face competition. Still, it also offers a dividend yield near 4.7%, which it has aggressively increased lately. While some see value in it, others are cautiously watching.
America's third-biggest wireless carrier, Sprint Nextel, meanwhile, has long been struggling and is currently seeking to sell 70%of itself to Japan's Softbank. If the deal is approved, Sprint will get a lot of cash with which to beef up its balance sheet and invest in its network. Motley Fool Blog Network contributor Chad Henage worries about the company's cash flow and departing subscribers, though, while others are optimistic that Sprint will draw many customers via its iPhone offering.
Finally, Greenlight's closed positions include UnitedHealth Group (NYS: UNH) , CareFusion (NYS: CFN) , and Hess (NYS: HES) . Some see energy giant Hess as undervalued. It has been disappointing analysts in several recent quarters with its earnings, but it does hold a lot of potential, particularly in natural gas. Our analysts see a likely spinoff of Hess' refinery and downstream businesses and see recent asset sales and a restructured budget helping it dig out from a lot of debt.
We should never blindly copy any investor's moves, no matter how talented the investor. But it can be useful to keep an eye on what smart folks are doing, and 13-F forms can be great places to find intriguing candidates for our portfolios.
The amount of data we store every year is growing by a mind-boggling 60% annually! To make sense of this trend and pick out a winner, The Motley Fool has compiled a new report called "The Only Stock You Need to Profit From the NEW Technology Revolution." The report highlights a company that has gained 300% since first recommended by Fool analysts but still has plenty of room left to run. Thousands have requested access to this special free report, and now you can access it today at no cost. To get instant access to the name of this company transforming the IT industry, click here -- it's free.
The article Here's What Greenlight's David Einhorn Has Bought and Sold originally appeared on Fool.com.Longtime Fool contributor Selena Maranjian, whom you can follow on Twitter,owns shares of Apple and Microsoft. The Motley Fool owns shares of Apple, Facebook, and Microsoft and has options on Facebook. Motley Fool newsletter services recommend Apple, Facebook, General Motors, Microsoft, UnitedHealth Group, and Yahoo! Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.