David Einhorn Sells Shares of Apple Inc (AAPL), General Motors (GM) As He Seeks Turnaround

David Einhorn founded Greenlight Capital in 1996 with $900,000, some of which was borrowed from friends and family. Now, his fund is a financial titan with more than $11 billion in assets under management and a track record that boasts annualized returns of 25% since inception. However, it was an ugly year for Einhorn, which included big losses and angry investors. At Insider Monkey, we look at the weighted average returns of the long positions a fund indicates in its 13F filings, in companies with a market cap that exceeds $1 billion, to estimate the returns of the fund’s stock picks in notable stocks. Our statistics show that Greenlight Capital’s qualifying stock picks lost 24.9% in 2015. Seth Klarman‘s Baupost Group, which has an equity portfolio with a similar value to that of Greenlight Capital, performed even worse, with its stock picks down by 27.7% for the year. According to its latest 13F filing, Greenlight Capital’s equity portfolio carries a market value of $5.47 billion, spread over a large number of sectors. Einhorn is most bullish on consumer discretionary and technology stocks, which account for roughly half of the portfolio. In this article we’ll take a look at David Einhorn’s major moves heading into 2016, including two new additions to his portfolio.

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A long-term Apple Inc. (NASDAQ:AAPL) fan, David Einhorn seems to have had a slight change of heart concerning the tech giant. Having increased his investment in the company by 53% during the third quarter, he turned around and slashed his position by 44% during the fourth quarter. As a result, Greenlight Capital now holds 6.28 million Apple shares valued at $661 million. As is the custom, the latest generation of iPhones failed to disappoint, generating record sales. However, rumors that Apple Inc. (NASDAQ:AAPL) might cut production for the first time has put pressure on the stock. The stock has been in a downtrend since May 2015, having lost 28% of its value since then. At the end of January, Apple Inc. (NASDAQ:AAPL) issued its financial report for the first quarter of fiscal year 2016, which includes the crucial holiday season, reporting revenue of $54.51 billion, up by 18% year-over-year, and earnings of $13.81 per share. Billionaire activist Carl Icahn also decided to trim his stake in Apple during the fourth quarter, by 13% to 45.76 million shares.

General Motors Company (NYSE:GM) stands firm as Greenlight Capital’s second-largest equity position, despite a 14% reduction to the stake. Einhorn initiated the position during the first quarter of 2015 and held 16.3 million shares of GM at the end of the third quarter. The fund now holds 13.9 million shares worth $473 million. Last year, General Motors Company (NYSE:GM) initiated a $5.0 billion share repurchase program after having faced increasing pressure from activists to return some of its cash to investors. The company also increased its annual dividend to $1.38 per share, which provides a juicy 5% yield. The stock is currently trading at a Price-to-Earnings (P/E) ratio of just 4.90, significantly lower than the industry average of 13.00, as reported by Yahoo! Finance.

Turn the page to find out more about the two largest new bets made by Einhorn during the fourth quarter, as well as another stock that he is bullish on.

Time Warner Inc (NYSE:TWX) is one of the stocks David Einhorn is bullish on, having increased his bet on it by a whooping 68% to amass 6.44 million shares by the end of December, valued at $416 million. The company released its fourth quarter financial results on February 10, providing investors with mixed news. Although Time Warner Inc (NYSE:TWX) managed to post impressive revenue from advertising, subscription revenue disappointed. Overall, the company said it registered a profit of $857 million or $1.06 per share on the back of $7.08 billion in revenue, down by 5.9% year-over-year. Analysts, in turn, were looking for $7.53 billion in revenue and earnings of $1.01 per share. Time Warner Inc (NYSE:TWX) also announced a $5 billion increase to its share buyback program and an increase to its quarterly dividend of 15%, to $1.61 per share.

News of Einhorn’s new position in Macy’s, Inc. (NYSE:M) broke on January 19 and investors rejoiced, sending the stock higher by more than 10% of the following few days. According to its recent 13F filing, Greenlight Capital holds 6.74 million shares of Macy’s valued at $235 million. It is yet unclear whether Einhorn will go activist on Macy’s, Inc. (NYSE:M) and team up with Starboard Value’s Jeffrey Smith to force the troubled department-store chain to reorganize itself as a real estate investment trust (REIT), a move that the company’s management has resisted so far. Einhorn only commented that he would not be a surprised if Macy’s is taken private to unlock the value of its real estate holdings. Starboard’s analysts estimate the value of these holdings at $21 billion, which is far larger than the current market cap of the entire company.

David Einhorn also believes it’s a good time to buy Avangrid Inc (NYSE:AGR), a diversified energy and utilities company. Greenlight Capital reported ownership of 5.25 million Avangrid shares in the fourth quarter, worth in excess of $201 million. Avangrid Inc (NYSE:AGR) went public in December 2015 and ranks as the second-largest wind energy producer in the United States. The company, which resulted from the merger of Iberdrola USA  and UIL Holdings, which was finalized on December 18, has assets valued at more than $30 billion, spread across 25 states. Israel Englander was also impressed by the prospects of the company, having acquired 2.38 million shares of it in the fourth quarter, valued at $91.6 million at the end of December.

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