David Einhorn’s Top Three Stock Ideas

David Einhorn is the founder of Greenlight Capital, a value-oriented, research-driven investment firm with a market-beating long-term track record. He is also author of Fooling Some of the People All of the Time.

The Manual of Ideas estimates that David Einhorn’s top three ideas at this time are Allegheny Energy (AYE), CommScope (CTV) and SPDR Gold Trust (GLD). Our analysis is based on a recent Form 13F-HR filed by Greenlight with the SEC. We also consider his past 13F-HR filings, recent 13G and 13D filings as well as the latest market prices of the portfolio holdings. Please see below for an explanation of the MOI Signal Rank™ methodology.

click to enlarge

Sold-Out Positions

• Ameriprise Financial Inc (AMP)

• Kinross Gold Corp (KGC)

• Mercer International Inc (MERC)

• Pomeroy IT Solutions Inc (PMRY)

New Positions

Many of the following positions may be viewed as “token” investments, as they comprise a negligible percentage of Greenlight Capital’s portfolio. Please revisit the MOI Signal Rank table above to view the new positions we deem to reflect a high level of conviction by David Einhorn.

• AerCap Holdings NV (AER)

• Aircastle Ltd (AYR)

• Allegheny Energy Inc (AYE)

• Amkor Technology Inc (AMKR)

• Anixter International Inc (AXE)

• Aspen Insurance Holdings Ltd (AHL)

• Beazer Homes USA Inc (BZH)

• Belden Inc (BDC)

• Brandywine Realty Trust (BDN)

• Cadence Design Systems Inc (CDNS)

• Carpenter Technology Corp (CRS)

• CF Industries Holdings Inc (CF)

• Colonial Properties Trust (CLP)

• CommScope Inc (CTV)

• Corning Inc (GLW)

• Crosstex Energy Inc (XTXI)

• Danaos Corp (DAC)

• Dow Chemical Co/The (DOW)

• Duke Realty Corp (DRE)

• ENSCO International Inc (ESV)

• Focus Media Holding Ltd (FMCN)

• Foster Wheeler AG (FWLT)

• General Cable Corp (BGC)

• Health Net Inc (HNT)

• Huntsman Corp (HUN)

• JA Solar Holdings Co Ltd (JASO)

• Lawson Software Inc (LWSN)

• Liberty Media Corp - Interactive (LINTA)

• Market Vectors - Gold Miners ETF (GDX)

• McDermott International Inc (MDR)

• MDC Partners Inc (MDCA)

• MEMC Electronic Materials Inc (WFR)

• Mercer International Inc (MERC)

• Oshkosh Corp (OSK)

• Patriot Coal Corp (PCX)

• Patterson-UTI Energy Inc (PTEN)

• ProShares UltraShort 20+ Year Treasury (TBT)

• Sears Holdings Corp (SHLD)

• Sinclair Broadcast Group Inc (SBGI)

• Smithfield Foods Inc (SFD)

• SPDR Gold Trust (GLD)

• Sunstone Hotel Investors Inc (SHO)

• SUPERVALU Inc (SVU)

• Teekay Corp (TK)

• Western Digital Corp (WDC)

• Williams-Sonoma Inc (WSM)

About MOI Signal Rank

MOI Signal Rank answers the question, “What are this investor’s top ideas right now?” Rather than simply presenting each investor’s largest holdings as of the recently filed quarter end, MOI’s proprietary methodology ranks the companies based on the investor’s current level of conviction in each holding, as judged by The Manual of Ideas.

Our proprietary methodology takes into account a number of variables, including the size of a position in an investor’s portfolio, the size of a position relative to the market value of the corresponding company, the most recent quarterly change in the number of shares owned, and the change in the stock price of a position since the most recent quarterly filing date.

For example, an investor might have the most conviction in a position that is only the tenth-largest position in such investor’s portfolio. This might be the case if an investor invests in a small company, resulting in a holding that is simply too small to rank highly based on size alone. On the other hand, such a holding might represent 19.9% of the shares outstanding of the subject company, suggesting a high level of conviction. Our estimate of the conviction level would rise further if the subject company has a 20% poison-pill threshold, thereby suggesting that the investor has bought as much of the subject company as is practically feasible.

Disclosures: Long MIM.

Comments

[Marcap:]

I like your long position on MIM better than any of your 3 stock ideas.

MIM indeed looks like it has great potential. After all, with a P/E ratio of only 3.50, earnings per share of $1.34, a Div / Yield of $0.60 (13.70%), with over 17% of o/s shares held by insiders, and of course trading at less than 13% of book value ($4.70 price vs $37.40 book), what's not to like?

I currently hold no position in MIM, but that may change before the day is out.

Mar 09 12:03 PM

[FSquare:]

While I completely understand why folks pay attenton to 13F filings and use them as screening tools, the fact that we do validates the noton that investors generally act like lemmings.....

Mar 09 06:14 PM

[PeteK:]

There's no such thing as top stocks ideas
any more. Even Buffett got lost in this cloudy
market !!

Mar 10 01:05 AM

[change is t...:]

If you have ever heard David Einhorn speak, or read his book, you would know he is a very deep and broad thinker. Thank you for sharing his investment insights. Rather than being a lemming and just buying what he does, which I do not think is the intent, using his investment thoughts to validate your own...... is useful. Again, thanks.

Mar 10 10:18 AM

[boisterousbob:]

I have no idea why people think Buffett got lost.

For example he bought GS preferreds paying a perpetual 10% yield, and people think he "lost" because the common stock which he didn't buy went down further.

Sorry if this is a rant, but this is just silly, PLEASE if you want to make money pay attention to details.


On Mar 10 01:05 AM PeteK wrote:

> There's no such thing as top stocks ideas
> any more. Even Buffett got lost in this cloudy
> market !!

Mar 11 12:22 AM

[PeteK:]

"Details" are in the heads of the beholder.
If you want to believe the details, then you forget the hidden details, that's why all those big banks are falling. AIG, Lehman, C, etc etc. Why not GS or GE ?
Possible, right ?

Mar 11 03:03 AM

[Stone Fox C...:]

interesting pick ups on AYR and AER. Airplane leasing stocks have been trashed, but their long term investment thesis hasn't.

Mar 11 05:27 PM

[stockstalker32:]

I like Gold, especially when India becomes a buyer and inflation settles in ( a bit away from that), good commentary on gold at crashmarketstocks.com

Mar 11 06:17 PM