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.
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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.