Whale Watching: David Einhorn's Greenlight Capital
As someone who keeps close tabs on the moves that great investors are making, some in the industry call this "Whale Watching", I always enjoy this time of the year. No not the beginning of football season, though that is great, it's 13F time. 13Fs are the forms that the SEC requires hedge funds, etc to file on a quarterly basis. They include the details of funds' long positions. I plan on posting the details of the portfolios of several hedge funds that I keep close tabs on over the next several days. I'm going to start with David Einhorn's Greenlight Capital.
I've always been a big fan of Einhorn. Not only does his Greenlight Capital fund have a history of outstanding returns, he's one of the few hedge fund managers who isn't afraid to talk about some of his positions in his quarterly letters to investors, interviews, or presentations at conferences. That often offers some insight as to why he has taken the positions that he has.
Some of this is old news because the media has already picked up on a number of these positions, but I'll recap the major ones anyhow.
During the second quarter, Einhorn added significant stakes in Apple (APPL), Ensco (ESV), Xerox (XRX), Lockheed Martin (LMT), and Furiex Pharmaceuticals (FURX)
I already own Ensco and while I am currently writing this on a MacBook Pro I have no interest in Apple's stock. I have no interest in Xerox either. I've heard about his position in it in the past and looked into it myself, but was not able to see the logic in buying it.
The latter two positions LMT and FURX are interesting though. 725,000 shares of Lockheed Martin isn't chump change...that's $52 million dollars. Still, it's a relatively small position for a $3 billion plus portfolio.
490,000 shares of Furiex is an even smaller position for Greenlight just under $5 million.
During Q2 Greenlight also increased its stakes in Pfizer (PFE) by 28% to 23.2 million shares and in Microsoft (MSFT) to 7.66 million shares. I have extolled the virtues of Big Pharma at this level in the past. I am already long PFE in CAPS and in real life. I am currently long Microsoft in CAPS and can see why one would think that it will outperform at this level, but I do not have a position in it in real life.
Einhorn sold out of his positions in URS, ADP, and Coinstar. I am neither long nor interested in any of these companies so this news doesn't impact me.
I plan on looking around today to see if I can find a copy of his quarterly letter to investors. Perhaps it will contain some additional color on Lockheed Martin and Furiex. Those are the two new Greenlight positions that I find the most intriguing. Is anyone else familiar with either of these companies and why one might consider investing in them at this level?