Seeking Alpha
Long only, value, special situations, fund holdings
Profile| Send Message| ()  

This article is part of a series that provides an ongoing analysis of the changes made to David Einhorn's Greenlight Capital US long stock portfolio on a quarterly basis. It is based on Einhorn's regulatory 13F Form filed on 05/15/2013. Please visit our Tracking David Einhorn's Greenlight Capital Holdings article series for an idea on how his holdings have progressed over the years and our previous update highlighting the fund's moves during Q4 2012.

Greenlight Capital's US long portfolio stood at $6.54B this quarter. It is about 6% higher than the ~$6.38B as of last quarter. The number of holdings edged up from 37 to 38. The fund added seven new holdings and sold out of six stocks in the quarter. The top five holdings now represent around 46% of the US long portfolio, up from 40% last quarter. Only one of the top-five changed during the quarter: Aetna (AET) edged out Computer Sciences Corp (CSC).

New Stakes:

Oil States International (OIS), Hess Corporation (HES), and Green Mountain Coffee Roasters (GMCR) PUTS: OIS is 3.37% of the US long portfolio stake established this quarter at an average purchase price of $77.16. The stock currently trades at around $100. In the Ira Sohn conference earlier this month, Einhorn highlighted this position saying the shares could be worth as high as $155 per share, if the accommodation business it owns is spun-off as a REIT. HES is 1.36% of the US long portfolio stake established this quarter at prices between $53 and $73. The stock currently trades at $69. Einhorn disclosed his short thesis on GMCR in a presentation titled "GAAP-uccino" at the Value Investing Congress in October 2011.

The stock traded as high as $125 per share before that presentation and dropped as low as $18 in July 2012. The GMCR PUTS this quarter is probably based on the same thesis although this time the trade has gone against him so far - the stock has doubled since the beginning of the year and Einhorn has already identified the short position in GMCR as a money loser in his Q1 2013 letter to shareholders. For investors attempting to follow Einhorn, a short position in GMCR is a good option to consider.

Capital Bank Financial (CBF), IAC Interactive (IACI), National Bank Holdings (NBHC), and Spirit Aerosystems (SPR): These are very small positions (less than 0.5% of the US long portfolio) established this quarter. As the position sizes are very small, they do not indicate a clear bias. Of the lot, SPR has performed very well, returning over 33% so far this year.

Stake Disposals:

Chipotle Mexican Grill (CMG) PUT: The very small short position in CMG was established in Q2 2012 and was disposed of this quarter. The timing appears to have been pretty good as the stock has returned over 28% so far this year.

Ensco PLC (ESV): ESV was 3.53% of the US long portfolio that was eliminated this quarter at prices between $57 and $66. The stock currently trades at $62. The position was first established in 2010 but was reduced by half in 2011 and trimmed further in 2012. The stock elimination this quarter indicates a bearish bias.

Xerox Corporation (XRX): XRX was a fairly large 2.78% position first purchased at around $7.5 in Q4 2011. The stake was increased by over 70% in Q2 2012 at prices between $6.38 and $7.94. The stake elimination this quarter happened at prices between $6.82 and $8.76 and the stock currently trades at the top-end of that range at around $8.76.

Yahoo Inc. (YHOO): YHOO was 1.48% of the US long portfolio stake purchased in Q3 2012 at prices between $14.65 and $16.22 and reduced marginally last quarter. The stake elimination this quarter happened at prices between $19 and $24. The stock currently trades at $26.58. Einhorn previously acquired a 3M share stake in YHOO in Q4 2011 at prices between $13.53 and $16.71 only to dispose it the next quarter at prices between $14.42 and $16.28. The stake elimination this quarter indicates a mild bearish bias.

NVR Corporation (NVR): NVR is a small 0.81% of the portfolio position that was reduced by around 13% last quarter and eliminated this quarter at prices between $920 and $1080. The stock currently trades at $1000. It was a long-term position and the stake disposal indicates a mild bearish bias.

Google Inc. (GOOG): GOOG was a 0.70% stake established last quarter at prices between $647 and $768 and eliminated this quarter at prices between $700 and $840. The stock currently trades outside that range at over $900. The quick turn-around indicates a bearish bias.

Stake Increases:

Apple Inc. (AAPL) and CALLs: AAPL is Einhorn's largest position accounting for 16.07% of the US long portfolio. The position was first purchased in the high-200s price-range in 2010. It was reduced by 25% in Q3 2012 at prices between $574.88 and $702.10 but upped by 45% last quarter at prices between $509 and $671. This quarter, the position was again increased by around 50% at prices between $420 and $550. The stock currently trades near the low point at $435. The aggressive purchases against falling prices indicate a clear bullish bias. In his latest shareholder letter, Einhorn indicated that Apple's announcement to return $100B to shareholders by the end of 2015 prompted the stake increase. For investors attempting to follow Einhorn, AAPL is a very good option to consider.

Stake Decreases:

CBS Corporation (CBS): CBS is 2.56% of the US long portfolio stake first purchased in Q3 2011 at an average purchase price of $20.79. The stake was upped by 25% last quarter at prices between $32 and $38 but was reduced by 33% this quarter at prices between $37 and $47. The stock currently trades outside that range at around $50. The about-turn this quarter indicates a bearish bias.

Computer Sciences Corporation: Einhorn purchased the initial stake in CSC in Q1 2012 at prices between $23.37 and $33.26. The stake was almost doubled in Q3 2012 at prices between $22.50 and $34.68 and by an additional ~12% last quarter at prices between $30 and $41. This quarter saw a turn-around, as the position was reduced by around 23% at prices between $40 and $51. The stock currently trades at around $43.

Delphi Automotive PLC (DLPH): DLPH is a large 4.07% of the US long portfolio that was established in 2011 prior to the IPO. It was reduced marginally last quarter and further reduced by 25% this quarter at prices between $37.50 and $44.50. The stock currently trades outside that range at around $47. The significant stake reduction this quarter indicates a bearish bias.

Legg Mason Inc. (LM): LM is 1.25% of the US long portfolio position that was reduced by around 25% this quarter at prices between $25.50 and $32. The stock currently trades at over $35. The original position was purchased in the Q3 2011 at prices between $24 and $34.

Microsoft Corporation (MSFT) & NCR Corporation (NCR): MSFT is a 2.66% position that was reduced by around 44% this quarter at prices between $26.50 and $28.50. The stock currently trades at $34. The significant stake reduction indicates a bearish bias. The NCR position was increased by 24% last quarter at prices between $21 and $25.50. This quarter, the position was trimmed by 9% at prices between $25.50 and $29. MSFT & NCR positions were first purchased in 2009 and 2010, respectively, at lower prices and Einhorn is harvesting gains.

Seagate Technology (STX): The 3% STX stake was reduced by 36% this quarter at prices between $30.50 and $38, following a pattern of periodic trimming: the position was reduced by half last quarter at prices between $25 and $32. It was reduced by ~28% in Q3 2012 as well at prices between $24.56 and $35.67. The bulk of the original stake was purchased in Q2 2011 at an average purchase price of $16.06. The stock currently trades at around $40.50. Here again, Einhorn is harvesting substantial gains although the consistent pattern of sales indicates a clear bearish bias.

Republic Awys Hldgs Inc. (RJET) & Symmetricom Inc. (SYMM): These are very small positions that were reduced substantially this quarter. As the position sizes are very small, the activity does not indicate a clear bias.

The rest of the positions were kept steady during the quarter:

Aetna Inc., Cigna Corporation (CI), General Motors Company (GM), and Marvell Technology Group (MRVL): These are the top-five positions that were kept steady during the quarter. Einhorn is very bullish on these positions but all except MRVL are trading near their 52-week highs. For investors attempting to follow Einhorn, MRVL is a good option to consider as it is trading very near Einhorn's cost basis (around $12).

Aspen Insurance Holdings (AHL), Babcock & Wilcox (BWC), DST SYS INC (DST), Einstein Noah (BAGL), Market Vectors Gold Miner ETF (GDX), Oaktree Capital Group (OAK), Sprint Nextel Corporation (S), and Virgin Media Inc. (VMED): These are medium-sized positions (1-5%) that were kept steady this quarter. Here again, except for BAGL and GDX, the rest are trading near their 52-week highs and well above Einhorn's cost basis.

Aecom Technology (ACM), Barrick Gold Corporation (ABX), Biofuel Energy (BIOF), Coventry Health Care Inc. (CVH), Fifth Street Finance (FSC), State Bank Financial (STBZ), Tessera Technologies (TSRA), Vodaphone Group PLC (VOD) and Western Digital (WDC): These are very small positions (less than 1% of the US long portfolio) that were left untouched during the quarter. As the position sizes are very small, they do not indicate a clear bias.

The spreadsheet below highlights changes to Greenlight's US stock holdings in Q1 2013:

(click to enlarge)

Source: Tracking David Einhorn's Portfolio - Q1 2013 Update