Was Einhorn Right on Apple Inc. (AAPL), Martin Marietta, and More?

Page 1 of 2

David Einhorn GREENLIGHT CAPITALGreenlight Capital has become one of the most famous hedge funds in the current financial world. Manager David Einhorn is now a billionaire and has the power to singlehandedly send a stock up or down merely by revealing that he is long or short. At a recent investment conference, a mistaken impression by the audience that he was short General Motors Company (NYSE:GM) caused its price to immediately drop- until it was made clear that Greenlight was actually long GM. Einhorn provided his quick takes on a number of stocks at the Ira Sohn conference in May of this year (see our record of some stocks he did and didn’t like). Here’s how these recommendations have done since then (the S&P 500, for purposes of comparison, is up about 7%):

Einhorn said that he was long Apple Inc. (NASDAQ:AAPL) and for a while this position was doing well. However, the recent correction in the stock has put it slightly down since mid May. We think that Apple currently looks like a good value at 12 times trailing earnings; analyst growth expectations imply that the stock is a screaming buy, and even though we think they might be being too optimistic a trailing P/E of 12 can be justified with even a low growth rate. Greenlight sold about a quarter of its shares in the third quarter of the year but Apple was still the fund’s largest position by market value (check out more of Einhorn’s favorite stocks).

One of the billionaire’s short recommendations was Martin Marietta Materials, Inc. (NYSE:MLM). This stock is up 22% since the Ira Sohn conference, so again Einhorn has actually missed on this pick. Martin Marietta is a $4.2 billion market cap provider of aggregates such as granite and limestone; as a result, it is dependent on activity in construction and public infrastructure. Einhorn had argued that the government would stop stimulating demand for the company’s products, which would undercut a fairly expensive valuation. Read what we think about Martin Marietta right now.

Page 1 of 2
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The Best B-Boy Movies

Most Awesome Hip Hop Documentaries

Foods That Stain Your Teeth

Richest Doctors in the World

The Best Movie Sountracks Ever

The Highest Grossing Musicals on Broadway

The Most Successful Reality TV Stars

Cheapest Cities to Visit in the US

Most Expensive Summer Camps

Most Expensive Animals in the World

Most Expensive Specialty Crops in the World

Movies That Took Ages to Make

The Longest Hollywood Films Ever Made

Most Expensive Concert Stages

The Richest Bands of all Time

10 Most Corrupt Countries 2013 List

10 Countries with the Highest Quality of Life Index

Most Expensive Mattresses in the World

5 Smallest Countries by Land Area

The Ultimate Heartbreak Songs

Richest Teenagers in the World

10 Most Haunted Places in America

10 Best Places to Retire in Florida East Coast

Top 10 Places to See Before You Die

Top 8 Countries in the World Where Justice Prevails

10 Richest States in America

15 Wealthiest Countries in the World

Richest Singers in the World

Most Expensive Tasting Menu in New York City

Most Expensive Baby Items in the World

Most Expensive Hotel Suites in Vegas

Most Expensive Brunch in New York City

Most Expensive Beef Cuts in the World

25 Best Colleges to Get a Job

Top 10 US Supermarkets

The 25 Most Dangerous Cities in the World to Visit

Most Expensive Xbox Games

Top 11 Cities Where Billionaires Live

Top 10 Most Charitable Companies in America

Most Expensive Seafood in the World

The 10 Wildest Conspiracy Theories

The 10 Best Job Markets in the US

Top 10 Accounting Scandals of All Time

The 25 Biggest Cities in the World

Top 10 Best Paying Virtual Jobs

Most Expensive Leather Shoes in the World

Top 6 Things to Buy in March

The 10 Most Stressful Jobs in America – 2014 List

Top 10 Jobs for Introverted People

Top 10 Honeymoon Destinations in the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!