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David Einhorn founded Greenlight Capital in 1996. He is believed to be one of the most successful long/short equity hedge fund managers of the past decade. Greenlight Capital has realized annualized returns of 21.5% since its inception. In 2010, the hedge fund returned 15.9%. His expertise in the hedge fund business can be owed to Gary Siegler and Peter Collery. Prior to launching Greenlight Capital, he worked at Siegler and Collery’s hedge fund called the SC Fundamental Value Fund. Curtis Macnguyen, the founder of Ivory Capital, is also a former employee of SC Fundamental Value Fund. We believe there are intriguing similarities between Macnguyen's and Einhorn’s portfolios.

During the second quarter of 2011, Einhorn sold off CIT Group (CIT), Cardinal Health (CAH), Yahoo (YHOO), Xerox (XRX), MI Developments (MIM), Transatlantic Holdings (TRH), and MDC Holdings (MDC). The timing was right. Since the end of June, Xerox Corp lost 21%, CIT Group and MDC lost 23%. Yahoo and MIM lost 10%, and Cardinal Health lost 8%. Moreover, Einhorn reduced his stake in BP Plc (BP) by 26%, SemGrop (SEMG) by 39%, Amdocs (DOX) by 53%, and Employers Holdings (EIG) by 58%. All of the reduced stocks failed to gain in price since June. Here are Einhorn’s top stock picks at the end of June.

Company

Ticker

Value (x1000)

Activity

Return Since June

PFIZER INC

PFE

483155

-6%

-10%

MICROSOFT CORP

MSFT

385295

63%

-2%

APPLE INC

AAPL

361685

29%

14%

SPRINT NEXTEL

S

301300

0%

-35%

CAREFUSION CORP

CFN

258787

-5%

-6%

TRAVELERS

TRV

245092

0%

-10%

ENSCO PLC

ESV

225118

-4%

-11%

BEST BUY INC

BBY

216340

15%

-22%

BECTON DICKINSON

BDX

200913

0%

-6%

GOLD MINER ETF

GDX

193630

0%

12%

SEAGATE TECHNOLOGY

STX

185927

252%

-25%

NCR CORP NEW

NCR

177857

-8%

-7%

EINSTEIN NOAH REST

BAGL

160680

0%

-6%

CVS CAREMARK

CVS

123075

0%

-9%

BP PLC

BP

109271

-26%

-5%

ASPEN INSURANCE

AHL

106522

0%

1%

GENERAL MTRS CO

GM

103832

0%

-13%

HCA HOLDINGS INC

HCA

96855

0%

-32%

NVR INC

NVR

89960

0%

-15%

HUNTINGTON INGALLS

HII

82456

NEW

-17%

LYONDELLBASELL

LYB

80306

-10%

-11%

MARATHON OIL CORP

MRO

76528

NEW

-13%

INGRAM MICRO

IM

68025

48%

-3%

BROADRIDGE FINL SOL

BR

63785

0%

-11%

AEROPOSTALE

ARO

60102

NEW

-31%

FIRST SOLAR Puts

FSLR

37948

0%

-20%

STATE BK FINL CORP

STBZ

34377

NEW

-12%

SEMGROUP CORP

SEMG

27779

-39%

-16%

ENERGY PARTNERS

EPL

25762

0%

-9%

FIFTH STREET FINANCE

FSC

23185

-6%

-14%

REPUBLIC AWYS

RJET

18634

0%

-35%

EMPLOYERS HOLDINGS

EIG

16360

-58%

-25%

BIOFUEL ENERGY

BIOF

11139

0%

-22%

SYMMETRICOM

SYMM

9968

0%

-11%

FURIEX PHARMA

FURX

8717

0%

-6%

AMDOCS LTD

DOX

7208

-53%

-8%

BECTON DICKINSON Calls

BDX

2585

0%

-6%

During the second quarter, Einhorn increased Seagate Technology by 252%. He had 11.5 million shares of the company which was worth $185 million at the end of June. STX lost 25% since then. Andreas Halvorsen’s Viking Global purchased STX in the second quarter as well. Halvorsen owns 20 million shares of the company.

Einhorn added Huntington Ingalls to Greenlight’s 13F portfolio in the second quarter. He purchased 2 million shares at an average price of 37.92. HII lost 17% since the end of June. Another investor who purchased Huntington Ingalls is Jean-Marie Eveillard, the founder of First Eagle Investment Management.

Apple is the third largest holding of Einhorn. During the second quarter, Einhorn increased Apple by 29%. Currently he owns $361 million worth of AAPL shares. Since June, Apple has gained 14%. Ken Heebner’s Capital Growth Management sold off Apple in the second quarter of 2011. Apple is one of the most favorite stocks among hedge funds.

Einhorn has been concerned about the economy for a while and investing defensively. His net exposure was below 30% before the recent stock market declines. We like Einhorn and believe that investors can beat the market in the long run by imitating his top stock picks.

Source: A List of David Einhorn's Stock Picks