There are over 8,000 hedge fund managers in existence today, but only a few are listened to by Mr. Market on a regular basis. David Einhorn definitely qualifies as a market mover, and his massive hedge fund, Greenlight Capital, manages over $7 billion in assets. With high profile theses over Green Mountain Coffee, Chipotle, and now Apple Inc. (NASDAQ:AAPL), it’s worth it to track his latest moves, in addition to that “little” fact that hedge fund sentiment can beat the market.
With that being said, let’s take a look at Einhorn’s top stock picks, led by none other than Apple. The tech giant’s stake in Einhorn’s equity portfolio is now up to a weight of 17.8%, worth $950.7 million. On a share basis, the size of the position remains unchanged from one quarter earlier, when we first learned of David Einhorn’s desire to squeeze more value-creation out of Apple.
With a dividend hike and an expanded share buyback program, Apple Inc. (NASDAQ:AAPL) has fulfilled Einhorn’s needs, but its biggest boost may have come from another activist: Carl Icahn.
Icahn said earlier this week that after taking a mammoth stake in Apple, he thinks an even larger share buyback could get Apple Inc. (NASDAQ:AAPL) back to $700 a share. That remains to be seen, but the markets have responded positively an Einhorn has to be happy. The stock is up 17% over the past month, and is above $500 a share for the first time since January.
Second in Einhorn’s 13F is General Motors Company (NYSE:GM), worth 10.6% of his total equity portfolio. It’s easy to see that the Greenlight is happy with GM’s performance in 2013, with shares of the automaker up 20.2% as of this writing, but it’s worth noting that the position was cut by about one-fifth in Q2. This is likely just simple profit-taking, but important nonetheless. Smart money peers like Mohnish Pabrai and Michael Kao hold larger positions in GM, so we’d watch how they treat this stock as well. For the time being, though, there’s obvious value across the board (<8 forward P/E, PEG of 0.7, <2 P/C).
Einhorn and Greenlight were also bullish on semiconductor mid-cap Marvell Technology Group Ltd. (NASDAQ:MRVL), and insurers Aetna Inc (NYSE:AET) and CIGNA Corporation (NYSE:CI). This trio accounted for 25% of Greenlight Capital’s 13F. This positioning is similar to the hedge fund’s first quarter holdings, but we’d still watch them this quarter.
In the meantime, Bloomberg did a nice piece on the “Math of Icahn’s Apple Plan” that any Apple Inc. (NASDAQ:AAPL) investor should watch. Enjoy: