Billionaire David Einhorn of Greenlight Capital Re, Ltd. (NASDAQ:GLRE) is one of the most closely followed hedge fund managers in the world. In mid May, his fund filed its 13F with the SEC, disclosing many of its long equity positions in U.S. stocks as of the end of March. Even though the information in these is a bit old, we have shown that 13Fs can be used to develop profitable investment strategies (for example, by our reckoning the most popular small cap stocks among hedge funds generate an average excess return of 18 percentage points per year). In addition, investors can always treat movements that these managers made during the previous quarter as initial ideas, going on to further research any which seem interesting on their own merits. We have gone through Einhorn’s most recent 13F compared to previous filings (see what Greenlight has owned over time) and here are three things we noticed that we was up to:
Loyal to Apple. We’ve noticed when looking at a number of billionaires’ filings that they sold Apple Inc. (NASDAQ:AAPL); this group includes David Tepper’s Appaloosa Management (find Appaloosa’s favorite stocks) and legendary investor Julian Robertson (research stocks Robertson owns). Einhorn was buying, however, and by the end of March his fund owned 2.4 million shares- a position worth over $1 billion at the time. In its most recent quarter, Apple Inc. (NASDAQ:AAPL)’s earnings dropped by 18% compared to the same period in the previous fiscal year even as revenue rose by 11% as investor fears of lower margins came true. Currently, Apple Inc. (NASDAQ:AAPL) is valued at 10 times its trailing earnings (with cash comprising a significant share of the market cap). According to our database, Apple Inc. (NASDAQ:AAPL) actually regained the title of the most popular stock among hedge funds during the first quarter of 2013 (see the rest of the top three).
Not to Microsoft, though. Greenlight Capital Re, Ltd. (NASDAQ:GLRE) wasn’t as optimistic about Apple Inc. (NASDAQ:AAPL)’s longtime rival Microsoft Corporation (NASDAQ:MSFT), cutting its stake by nearly 40% to 6.1 million shares. Microsoft Corporation (NASDAQ:MSFT) trades at 11 times expected earnings for the fiscal year ending in June 2014, though if we were going to look at the company more closely we’d try to account for the fact that earnings in that year might be temporarily swelled by the release of Windows 8 and the new version of Office. We’d note that Microsoft Corporation (NASDAQ:MSFT) also has a good deal of cash on hand, though not as much as Apple Inc. (NASDAQ:AAPL) of course, and pays a dividend yield close to 3% at current prices and dividend levels. Platinum Asset Management, managed by billionaire Kerr Neilson, has been another major shareholder of Microsoft Corporation (NASDAQ:MSFT) (check out Neilson’s stock picks).