Hedge funds are known to be fast traders who go in and out of stocks very quickly. However, a large number of equity hedge funds have core positions that they don’t much over several quarters. The equity portfolio of billionaire David Einhorn’s Greenlight Capital has expanded greatly over just the past six quarters. From a mere $5.33 billion at the end of the second quarter of 2013, the portfolio has swelled to $7.52 billion, an increase of more than 40%. During that time, there has been a quite a large amount of turnover among Einhorn’s top positions, with only five of his top 20 positions from the middle of 2013 remaining in the top 20 at the end of 2014.
We’ll run through these five important positions of Einhorn in this piece. Unsurprisingly, the majority of them are technology stocks, as the technology sector accounted for 56% of Einhorn’s equity portfolio at the end of 2014. Also unsurprisingly, the majority of them are large-cap stocks, with a couple being mid-cap stocks. These highly valuable companies are the perfect investment vehicles for wealthy billionaires with a lot of capital to invest in, without exposing themselves to too much risk.
On the other hand, they’re not necessarily the best choices for less wealthy investors seeking larger returns from the limited amount of capital they can pour into stocks. In that scenario, the top small-cap stock picks of hedge fund managers prove to be an ideal investment option, as their top 15 collective picks managed to outperform the market by 76.7 percentage points from the end of August of 2012 through March 10th, 2015.
Nonetheless, Einhorn’s top pick in the middle of 2013 is a mega-cap company popular among investors of all brackets of wealth because of its iconic stature and legions of devotees. I speak of none other than Apple Inc. (NASDAQ:AAPL) of course, which remained Einhorn’s top pick until the middle of 2014 when it was overtaken by Micron Technology, Inc. (NASDAQ:MU). His stake in Apple Inc. (NASDAQ:AAPL) remains Einhorn’s second–most valuable position with 8.61 million shares valued at $949.88 million. However that’s a large decrease from the 16.78 million shares he held in the middle of 2013, though they were only worth slightly more at the time, $950.76 million.
The reason for that of course is Apple Inc. (NASDAQ:AAPL)’s meteoric rise over those six quarters, as it gained 101.22%. Flush with tens of billions of dollars in cash, Apple Inc. (NASDAQ:AAPL) is preparing to take a major step into a large and potentially very lucrative market, as they begin the process of building an electric car. Though CEO Tim Cook recently downplayed the rumors, there has been a strong rumbling among investors and the tech world that a purchase of Tesla Motors Inc (NASDAQ:TSLA) could suit Apple perfectly and makes a world of sense for both companies.