Selling Seagate. Seagate Technology PLC (NASDAQ:STX) had been one of Greenlight’s largest positions at the beginning of October but by the end of Q4 it had been trimmed to 8.4 million shares- roughly half of what it had been three months earlier. The $13 billion market cap hard disk drive and data storage company reported a 13% decline in net income in its most recent quarter compared to the same period in the previous fiscal year, despite rising revenue. 11% of the outstanding shares are held short, even at a forward earnings multiple of 6, as the market worries about a company which has such strong exposure to PC demand. Iridian Asset Management, managed by David Cohen and Harold Levy, had owned 4.3 million shares at the end of September after cutting its own stake in half in Q3 2012 (check out Iridian's stock picks).
Einhorn may be taking profits on Seagate (it has outperformed the market over the last year, and has more than doubled in the last two years) and if anything we think it might be worth looking at as a potential value stock. We’re also interested in health insurance, though it’s worth comparing Cigna and Aetna to their peers particularly if one could be found that is generating organic earnings growth. Apple looks like a good value at 11 times trailing earnings- though, of course, it also looked like a good value at higher prices. Microsoft is a tougher call as there has been quite a bit of skepticism about the reception of Windows 8. It may be best to avoid taking any position until the company begins to report results.
Disclosure: I own no shares of any stocks mentioned in this article.