)'s hedge fund firm Greenlight Capital is up 5.4% for 2014 through
May, a positive turn from the 1.5% loss he reported for the first
quarter. The fund was plagued by a 61% year-to-date increase in a
significant short, Keurig Green Mountain Inc. (
). He also reported shorting a basket of technology stocks, where
the Nasdaq 100 Technology Sector has risen 12% year to date.
Athenahealth Inc. (
), another short which he announced on May 5, is down 6.4% since
the start of the year, but has returned to around the level it was
before he made the announcement.
Einhorn has made impressive showings with his top long selections,
however. Several have almost doubled from his average purchase
price. Making up roughly 46% of his portfolio, Einhorn's top
positions are: Apple Inc. (
), Micron Technology Inc. (
), Marvell Technology Group Ltd. (
) and Cigna Corp (
Apple Inc. (
Einhorn has a massive 1,993,706-share holding of Apple, accounting
for 16% of his portfolio. Adjusted for splits, the share price has
appreciated 150% from his first purchase in second quarter 2010. It
is also up about 19% from the first quarter 2014 average, at $90.83
per share on Monday - near a 10-year high.
Apple's share price
In fiscal 2014, Apple made $45.6 billion in revenue, an increase
from $43.6 billion the prior year. It also grew net income to $10.2
billion from $9.5 billion, while gross margins expanded to 39.3%
While Einhorn is shorting a basket of what he believes to be
overvalued technology stocks, he commented on his comparably
positive outlook for Apple in his third quarter 2013 letter:
"Not only is it growing faster than Amazon, AAPL makes more money
in non-hardware e-commerce alone than Amazon makes in its entire
business. That gap will likely widen in AAPL's favor as AAPL rolls
out new offerings and services. We believe that near-term share
performance will track the success of the new phones, while the
longer-term share price will reflect the market's eventual
understanding of AAPL's strong ability to earn high-margin and
recurring revenue streams."
Apple trades today near a 10-year high P/E ratio of 15.2, and
10-year high P/S ratio of 3.26.
Micron Technologies (
Einhorn holds a 4.24% stake in Micron Technology, with 44,004,293
of the company's shares. Up almost 32% just from the first quarter
average, he has an approximate gain of 83% on his average purchase
price for all his shares. Einhorn built the position over the
second half of 2013.
Micron's share price history:
Einhorn previously shorted this semiconductor company from 2001
through 2005, believing the industry was overcrowded and the
products too similar. Now he believes both the industry and the
company have changed, with consolidation ending, technology
advances, a higher moat and companies adding value rather than
In his fourth quarter 2013 commentary he wrote:
"For the first time in memory, MU intends to use its excess cash
flow to shrink the outstanding share count rather than build new
factories. We believe the company will approach $4 per share of
earnings and free cash flow in calendar 2014, and should enjoy a
better multiple as investors begin to appreciate the new dynamic."
In its third quarter of fiscal 2014, ended May 29, Micron reported
revenue of $3.98 billion, up 72% from a year previously. Net income
was $806 million, or $0.68 per diluted share, increased from $43
million, or $0.04 per diluted share, a year previously.
Micron today trades at two 10-year high valuation ratios: a P/B of
3.64 and P/S of 2.78.
Marvell Technology Group Ltd. (
Einhorn owns an 8.01% stake in Marvell Technology Group Ltd., with
39,429,328 of its outstanding shares. The stock's price has moved
up 29% from his average purchase level, and hovering around $14.71
per share on Monday - near a two-year high. Einhorn began building
this stake in third quarter 2011.
Marvell's price history:
Marvell, another semiconductor company, was Einhorn's biggest loser
in 2012, but that began to change in 2013. In his first quarter
2013 letter he wrote:
"Marvell reversed its 2012 decline as investors began to pay
attention to MRVL's prospects for share gains in controllers for
hard disk drives and flash memory drives, as well as its new
processor for cell phones and tablets. The company should see
significant fixed operating leverage in 2013, as it has been
carrying the cost of the investments in these products without any
corresponding revenue until now. The company has also continued to
buy back stock aggressively, adding to the potential earnings
In first quarter fiscal 2015, ended May 3, 2014, Marvell reported a
30% year-over-year increase in revenue to $958 million. Its net
income was $99 million, or $0.19 per diluted share, up from $53
million or $0.11 per diluted share a year previously. The results
were due to high demand for its LTE solutions.
The company has a P/E ratio of 20.8 and P/B ratio of 1.6.
Cigna Corp (
Einhorn holds 4,211,230 shares of Cigna Corp, his fourth largest
holding at 5.3% of his portfolio. He began acquiring shares in
second quarter 2012, when the price averaged $46 per share. Since
then, it has increased 100%, and he has a 97% gain on the average
price of all of his purchases. Cigna trades around $91.46 a share
on Monday - near a 10-year high.
Cigna's share price history:
Cigna Corp is a health services organization with insurance
subsidiaries dealing in a variety of products and services. Back in
2012, Einhorn said in a shareholder letter he likes Cigna for its
higher quality of business, highest-in-class and stable returns on
equity, significant and growing Medicare Advantage business and
international business. He also thought it could benefit from
"In fact, Obamacare may provide a growth opportunity for the
company because it may finally afford CI the opportunity to compete
meaningfully in the individual segment of the market," he wrote.
In the first quarter, each of Cigna's segments made strong revenue
and earnings. Consolidated revenues increased 4% year over year to
$8.5 billion. Net income also increased to $528 million, or $1.92
per share, from $57 million, or $0.20 per share, for first quarter
2013. The company also repurchased 5.4 million shares of stock, for
an aggregate $425 million, bring its year-to-date total to 8.0
million shares purchased for approximately $650 million.
Cigna has a P/E of 13.4, P/B of 2.3 and P/S of 0.8, which is near a
For more of David Einhorn (Trades, Portfolio)'s stocks,
visit his portfolio here
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