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Billionaire David Einhorn’s Long Term Picks Include Apple Inc. (AAPL)

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We track quarterly 13F filings from hundreds of hedge funds and other notable investors, using the results to help us identify investing strategies; we have found, for example, that the most popular small cap stocks among hedge funds deliver an average excess return of 18 percentage points per year. We also like to go through individual managers’ filings for interesting stock picks; some argue that because the information in 13Fs is old (the most recent ones disclose many of a fund’s holdings as of the end of March) it isn’t that useful, though we’d claim that ownership can still serve similarly to a stock screen in identifying interesting picks for further research. However, it is of course possible to narrow the stocks listed in a 13F to those which a fund has owned for a fairly long period of time. Here are five stocks which billionaire David Einhorn’s Greenlight Capital owned both in its most recent 13F and in its filing for the first quarter of 2011, per our database (or see the full list of Einhorn’s picks over time):

The fund has long been a fan of Apple Inc. (NASDAQ:AAPL), with 2.4 million shares of the stock in its portfolio at the end of the first quarter of 2013. Apple Inc. (NASDAQ:AAPL) had been the most popular stock among hedge funds in Q1 (check out the full top ten list) winning what had previously been its place back from AIG. Currently Apple Inc. (NASDAQ:AAPL) is valued at 10 times earnings, whether we consider trailing results or analyst forecasts for the fiscal year ending in September 2014. Analysts are bullish enough that the stock’s five-year PEG ratio is well below 1.

David Einhorn GREENLIGHT CAPITALLongtime Apple Inc. (NASDAQ:AAPL) rival Microsoft Corporation (NASDAQ:MSFT) also meets our criteria; Greenlight reported a position of 6.1 million shares in its most recent filing. With its stock price up 24% year to date, Microsoft has easily outperformed broader market indices and is a top returner out of the stocks in the Dow 30. It is valued at a forward earnings multiple of 11, but while that figure is low we would be concerned that it reflects a temporary boost to business from sales of new versions of Windows and Office.

NCR Corporation (NYSE:NCR) has been another of Einhorn’s long term picks with 9.4 million shares in his portfolio as of the end of March. The $5.5 billion market cap provider of interactive and transaction terminals- including ATMs and checkout kiosks (NCR is the old National Cash Register) has had low earnings on a trailing basis, but analysts expect business to improve considerably going forward and so the forward P/E is only 11. In its most recent quarterly report revenue grew by 13% compared to the first quarter of 2012, with a 22% rise in earnings.
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