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 11/14/2013. 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 Q2 2013.
Greenlight Capital's US long portfolio stood at $5.63B this quarter. It is about 6% higher than the ~$5.33B as of last quarter: the long/short ratio shifted somewhat in the short direction during the quarter - 109% long and 72% short as of Q3 2013 compared to 109% long and 63% short as of Q2 2013. The number of holdings remained steady at 30 - the fund added three new holdings while eliminating three others. The top five holdings represent 52.87% of the US long portfolio which is remarkably close to the 53% as of last quarter - they are also the same as that of last two quarters.
Einhorn's Q3 2013 letter reported that the fund returned 4.3% in Q3 2013 and 11.8% YTD. His longs vastly outperformed the S&P 500 index while the shorts underperformed. To learn about David Einhorn and the perils of shorting, check-out his "Fooling Some of the People All of the Time, A Long Short (and Now Complete) Story".
Intrexon Corporation (XON) & Tempur Sealy International (TPX): These two are relatively small (less than 1% each) positions established this quarter. XON is a 0.86% position established at prices between $21.36 and $29.70 and TPX is a 0.90% position established at prices between $36 and $47. XON trades currently at $18.12 and TPX is at $46.76. The stake establishments indicate a mild bullish bias toward these businesses. XON is trading well below Einhorn's purchase price-range.
NVR Inc. (NVR): NVR is a minute 0.37% of the US long portfolio position established this quarter at prices between $835 and $962. The stock currently trades at $933. NVR was previously a modest-sized position in the portfolio since 2010 but that stake was disposed of in Q1 2013. The stock dropped over 20% in August 2013 from the peak reached in March and Einhorn probably made an opportunistic re-entry.
Oaktree Capital Group (OAK): OAK was a 1.46% position that was first purchased in Q2 2012. The position was reduced by ~20% last quarter and was eliminated this quarter at prices between $51 and $56. The stock currently trades at around $55. Einhorn has disclosed that the stake disposal was done based on valuation and that his fund generated a 28% IRR on that holding.
Capital Bank Financial (CBF) & State Bank Financial (STBZ): These are very small positions (less than ~0.5% of the US long portfolio) that were eliminated this quarter. As the position sizes were very small, they do not indicate a clear bias.
Marvell Technology Group (MRVL): MRVL is a top-five position in the portfolio. It was marginally increased this quarter at prices between $11.50 and $13.38. The stock currently trades at $13.69. Einhorn's average cost-basis on MRVL is around $11.
Oil States International (OIS): OIS is a 5.05% of the US long portfolio stake established in Q1 2013 at an average purchase price of $77.16. The position was marginally increased this quarter. The stock currently trades at around $109. In the Ira Sohn conference in May, 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 an REIT. Also worth noting is the fact that OIS is listed as a top-five position in the partnership. So, in addition to this 13F holding, he probably owns the rest of the stake outside the US (Frankfurt?).
WPX Energy (WPX): WPX is a 1.60% position that was increased by 77% this quarter at prices between $18.42 and $20.50. The original position was purchased last quarter at prices between $15 and $20.50. The stock currently trades at $18.38. Einhorn is bullish on WPX and the stock is trading within his purchase price ranges. For investors attempting to follow Einhorn, WPX is a good option to consider.
Spirit Aerosystems (SPR): SPR is a 1.15% position that has seen consistent buying since the stake establishment in Q1 2013. The position was increased by just over 40% this quarter at prices between $21.50 and $26. The stock currently trades at $30.87. The activity indicates a clear bullish bias.
Aetna Inc. (AET): AET is a top-five position that was increased marginally last quarter. This quarter saw an about-turn as around 18% was sold at prices between $61.50 and $68.71. The original position was a ~3.2M share stake established in Q2 2012 at prices between $38.50 and $50. The stock currently trades at $65. The substantial stake reduction of a large position indicates a bearish bias.
Computer Sciences Corporation (CSC): 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% in Q4 2012 at prices between $30 and $41. Q1 2013 saw an about-turn, as the position was reduced by around 23% at prices between $40 and $51 and the pattern continued last quarter with a stake reduction of another 30% at prices between $42.50 and $49.40. This quarter saw further selling as the position was reduced by another 14% at prices between $43.77 and $54.20. The stock currently trades at $53.28. The large stake reduction spanning several quarters indicates a clear bearish bias.
Cigna Corporation (CI): CI is a top-five position that was reduced by ~40% last quarter at prices between $62.50 and $72.50. This quarter saw a ~7% trimming at prices between $72 and $84.50. The original position was established in Q2 2012 at prices between $43 and $50. The stock currently trades at $83. The significant stake reduction of a large position over a couple of quarters indicates a clear bearish bias.
NCR Corporation (NCR): NCR is a 5.13% position that was reduced by ~20% this quarter at prices between $32.90 and $40. The stock currently trades at $37. It was marginally reduced last quarter as well. NCR was first purchased in 2010 at much lower prices and Einhorn is harvesting gains. The stock has returned about 46% YTD.
Einstein Noah (BAGL): BAGL is a very long-term holding that was kept steady since 2009. About 14% of the position was sold at $15.51 (1.5M shares) through a secondary underwriting in August 2013. It now accounts for 2.84% of the US long portfolio. The stake reduction indicates a mild bearish bias. The stock currently trades at $16.14.
Aspen Insurance Holdings (AHL), Legg Mason Inc. (LM), and Rite Aid Corporation (RAD): These are small positions (less than ~1.5% of the US long portfolio each) that were reduced incrementally this quarter. The stake reductions indicate a mild bearish bias.
The rest of the positions were kept steady during the quarter:
Apple Inc. (AAPL) and CALLs: AAPL is Einhorn's largest position accounting for 20.29% 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% in Q4 2012 at prices between $509 and $671. In Q1 2013, the position was again increased by around 50% at prices between $420 and $550 and has since been kept steady. The stock currently trades at around $528. Einhorn is very bullish on AAPL.
Liberty Global Class A & Class C (LBTYA) (LBTYK): Liberty Global position accounts for ~3% of the US long portfolio. Einhorn had a position in Virgin Media (VMED) from Q2 2012 onwards and the Liberty Global position was established as a result of the acquisition of VMED by Liberty Global. The VMED position roughly doubled in around twelve months of ownership.
Market Vectors Gold Miner ETF (GDX): GDX position was increased by ~47% to a 4.04% position last quarter at prices between $37.85 and $46.90. The stock currently trades well below that range at $24.57. Einhorn continues to be bullish on Gold against falling prices. Gold overall (includes a large holding in physical gold) is still listed as a top-five position in Einhorn's long portfolio.
IAC Interactive (IACI): IACI was a minute 0.30% of the US long portfolio position established in Q1 2013. Last quarter, the position was substantially increased to a 1.74% position at prices between $43.50 and $51.50. The stock currently trades outside that range at $58.24.
Delphi Automotive PLC (DLPH): DLPH is a 3.46% of the US long portfolio stake that was established in 2011 prior to the IPO. It was reduced by 25% in Q1 2013 at prices between $37.50 and $44.50. Last quarter, it was reduced again by another 45% at prices between $40.94 and $52.09. It currently trades at over $56.95.
General Motors Company (GM): GM is Greenlight's second-largest position at 10.89% of the US long portfolio. Last quarter saw a ~15% trimming at prices between $33.31 and $37.58. The stock currently trades at $38.50. Einhorn is sitting on large gains on the position.
The spreadsheet below highlights changes to Greenlight's US stock holdings in Q3 2013: