"Tracking David Einhorn’s Portfolio – Q3 2014 Update"
"David Einhorn's US long portfolio decreased marginally from $7.18B to $6.93B this quarter.Greenlight's long/short ratio is at 114% long and 75% short compared to 115% long and 71% short last quarter.Greenlight substantially increased medium-sized stakes in IAC Interactive and National Oilwell Varco while reducing the large positions in Micron Technology, Marvell Technology, and Cigna Corporation.This article is part of a series that provides an ongoing analysis of the changes made to David Einhorn’s Greenlight Capital US long stock portfolio on a quarterly basis. It is based on Einhorn’s regulatory  filed on 11/14/2014. Please visit our  series for an idea on how his holdings have progressed over the years and our  highlighting the fund’s moves during Q2 2014.Greenlight Capital’s US long portfolio stood at $6.93B this quarter. It is down 3.43% compared to $7.18B as of last quarter: the long/short ratio shifted only modestly during the quarter - 114% long and 75% short as of Q2 2014 compared to 115% long and 71% short as of Q2 2014. The top five holdings represent around 42% of the US long portfolio, down compared to almost 50% as of last quarter as all five positions were reduced in the quarter. The number of individual stock positions increased from 41 to 46. 38 of them are fairly large (greater than 0.5% of the portfolio each) and they are the focus of this article.Einhorn’s Q3 2014 letter reported that the fund returned 2.2% YTD - in a constantly rising bull-market, the fund is not expected to keep pace with the market, but the long-term performance of his absolute-returns strategy speaks for itself: over 19% annualized returns (net of fees and expenses) since inception in 1996. The letter disclosed exiting the long-standing short position in Keurig Green Mountain (GMCR) at a loss - entry average was $47.59 and exit average was $67.02To learn about David Einhorn and the perils of shorting, check-out his “”.New Stakes:Citizens Financial Group (CFG), Consol Energy (CNX), & ON Semiconductor (ONNN): These are medium-sized (more than ~2% of the portfolio each) positions established this quarter. CFG is a 2.70% position established at around $23 and the stock currently trades at $23.88. It is a carve-out from Royal Bank of Scotland (RBS) that debut on 9/23/2014. CNX is a 2.66% stake purchased at prices between $36.53 and $46.07 and the stock currently trades at $40.61. ONNN is a 1.93% position established at prices between $8.34 and $9.91 and the stock currently trades at $8.52. The substantial stake establishments represent a bullish bias toward these businesses.Aecom Technology (ACM), Nokia Corporation (NOK), & NorthStar Asset Management (NSAM): These are small (between ~1% and ~2% of the portfolio each) positions established this quarter. ACM is a 1.48% stake purchased at prices between $31.66 and $38.13 and the stock currently trades at $32.40. The 0.96% NOK position was established at prices between $7.40 and $8.66 and the stock currently trades at $7.93. The 1.21% NSAM position was established as a result of the spin-off of NSAM from NorthStar Realty Finance that was completed in July.Synchrony Financial (SYF) & Interpublic Group (IPG): SYF & IPG are very small 0.75% & 0.64% of the US long portfolio positions respectively established this quarter. SYF purchase was at prices between $23 and $26 and the stock currently trades at $28.95. It is a private-label credit card issuer spun-off from General Electric (GE) at the end of July. IPG stake was established at prices between $18 and $20.54 and the stock currently trades at $19.84.Stake Disposals:Computer Sciences Corporation (CSC): Einhorn purchased an initial stake in CSC in Q1 2012 at prices between $23.37 and $33.26. The original stake was almost doubled in Q3 2012 at prices between $22.50 and $34.68. The last six quarters saw a combined stake reduction of ~70% at prices between $44 and $64. This quarter, the remaining ~2% of the US long portfolio position was sold at prices between $56.63 and $65. The stock currently trades at $62.02. The average entry and exit prices were $27.89 and $51.04 respectively. Greenlight harvested long-term gains from this position.Northstar Realty Financial Corporation (NRF): NRF was a 1.10% position established last quarter at prices between $14.40 and $17.30. It was exited this quarter at prices between $16 and $19. The stock currently trades at $18.18. After the split-off of NSAM from NRF, Einhorn chose to keep NSAM and dispose of NRF.Tempur Sealy International (TPX): TPX was a 1.50% position established in Q3 2013 at prices between $36 and $47 and increased by ~57% in Q4 2013 at prices between $38 and $51. It was exited this quarter at prices between $54.28 and $61.34. The stock currently trades at $54.30.  The average entry and exit prices were $39.81 and $59.46 respectively.Stake Increases:American Capital Agency (AGNC): The 1.74% AGNC stake was first purchased in Q1 2014 at prices between $19.29 and $22.66. It was increased by 8.59% this quarter at prices between $21.25 and $23.69 and the stock currently trades at $23.12.BP PLC (BP): BP is a 1.31% of the US long portfolio position purchased in Q4 2013 at an average cost-basis of $47.39. The position was increased by just over 50% in Q1 2014 at prices between $46 and $51 and that was followed with a ~40% increase this quarter at prices between $43.95 and $53.38. The stock currently trades at $41.19.Chemtura Corporation (CHMT): CHMT is a 1.33% position established last quarter at prices between $22.14 and $26.09 and increased by over one-third this quarter at prices between $23.26 and $26.44. The stock currently trades at $23.25.Conn’s Inc. (CONN): CONN is a 1.56% of the US long portfolio position established in Q1 2014 at an average purchase price of $35.49. Last quarter saw a 6% stake increase at prices between $38.59 and $49.87 and this quarter saw a marginal increase. The stock currently trades below his purchase price ranges at $32.50. The specialty retailer fell ~50% in February after announcing increased credit losses. Einhorn purchased the shares on the thesis that the market has over-reacted. For investors attempting to follow Einhorn, CONN is a good option to consider for further research.IAC Interactive (IACI): IACI was a minute 0.30% of the US long portfolio position established in Q1 2013. In Q2 2013, the position was substantially increased to a 1.74% position at prices between $43.50 and $51.50. Q1 2014 saw an about-turn as the position was reduced by 28% at prices between $65 and $80. Last quarter, the pattern reversed: 36% stake increase at prices between $62 and $72.59. This quarter, the position was increased by 60% to a fairly large 2.85% stake at prices between $63.80 and $72.96. The stock currently trades at $64.56. The large stake build-up in the last two quarters indicates a bullish bias.National-Oilwell Varco (NOV): NOV is a 2.44% of the US long portfolio position first purchased in Q1 2014 at prices between $73 and $80. Last quarter, the position was increased by around 42% at prices between $77 and $84 and this quarter saw a further ~27% increase at prices between $76.10 and $86.43. The stock currently trades at $72.05.NOTE: The implied performance of this position by the prices quoted above is negatively skewed because of the effect of National Oilwell Varco’s Now Inc. (DNOW) spinoff in May 2014. The terms called for NOV shareholders to receive one share of DNOW for every four shares of NOV held. It is interesting that Einhorn chose to liquidate DNOW while increasing NOV substantially.Time Inc. (TIME): Time Warner (TWX) spun-off Time Inc. (magazine publisher subsidiary) in June 2014. Greenlight established a 1.13% stake last quarter at prices between $20.85 and $24.43. This quarter saw an almost one-third increase at prices between $22.59 and $25.62. The stock currently trades at $22.50 and the current stake is at 1.49%.Stake Decreases:Aetna Inc. (AET): AET was a top-five position as of Q3 2013. Q4 2013 & Q1 2014 together saw a ~50% stake reduction at prices between $60.75 and $76. This quarter, the pattern continued with a ~7% decrease at prices between $75 and $85. The original position was established in Q2 2012 at prices between $38.50 and $50. The stock currently trades at $87.16 and the remaining position is still very substantial at 3.52% of the US long portfolio.Apple Inc. (AAPL): AAPL position was first purchased in the low-40s price-range in 2010. It was reduced by 25% in Q3 2012 at prices between $82 and $100 but upped by 45% in Q4 2012 at prices between $72 and $96. In Q1 2013, the position was again increased by around 50% at prices between $60 and $78 and had since been kept steady. Q1 2014 saw a ~13% stake reduction at prices between $71 and $80 and that was followed by a 35% reduction last quarter at prices between $74 and $94. This quarter saw marginal selling at prices between $92.93 and $103. The stock currently trades at $115. Einhorn is starting to realize large long-term gains from this position.Babcock & Wilcox (BWC): BWC is a 0.53% of the US long portfolio position first purchased in Q3 & Q4 2012 at prices between $23.37 and $27. Last quarter, the stake was reduced by ~60% at prices between $31.89 and $35.49 and this quarter saw an additional ~11% selling at prices between $27.69 and $33.43. The stock currently trades at $29.98. The substantial selling indicates a bearish bias.Cigna Corporation (CI): CI was a top-five position but has seen significant stake reductions in the last year: Q4 2013 saw a ~10% trimming at prices between $73 and $88 and Q2 2013 saw a ~40% stake reduction at prices between $62.50 and $72.50. The original position was established in Q2 2012 at prices between $43 and $50. Last quarter saw another 26% stake reduction at prices between $75.64 and $92.11 and this quarter the pattern continued with a one-third reduction at prices between $88.75 and $96.80. The stock currently trades at $104 and the remaining stake is at 2.71%.  Einhorn is harvesting large long-term gains from this position.EMC Corporation (EMC): The original position in EMC was established in Q4 2013 at around $24 per share. It was doubled in Q1 2014 at prices between $23.66 and $28.18. This quarter saw minor selling and the stake currently stands at 2.44% with the stock trading at $30.39. The average cost-basis is at $25.79.Market Vectors Gold Miner ETF (GDX): GDX stake is currently at 1.95%. The original position was increased by ~47% in Q2 2013 at prices between $23.42 and $35.06. This quarter saw a 27% reduction at prices between $21.36 and $27.32. The stock currently trades at $20.33. Einhorn also has previously disclosed a large holding in physical gold.Marvell Technology Group (MRVL): MRVL is a top-five position at 5.13% of the US long portfolio. It was first purchased in Q3 2011. Einhorn’s average cost-basis on MRVL is around $11. The stock currently trades at $13.48. This quarter saw a one-third stake reduction at prices between $12.80 and $14.64. The significant selling of a long-term position indicates a bearish bias.McDermott Intl. (MDR): MDR stake was increased by ~80% in Q1 2014 at prices between $7.37 and $9.18 but was reduced by 23% last quarter at prices between $6.73 and $8.35. This quarter, ~75% of the remaining position was sold at prices between $5.72 and $8.09. The stock currently trades at $4.27 and the remaining stake is minutely small at 0.23%. The original position was established in Q4 2013 at prices between $6.93 and $9.16.Micron Technology (MU): MU is Einhorn’s largest 13F position at 15.06% of the US long portfolio. The original stake was purchased in Q4 2013 at an average cost-basis of $16.49. Q1 2014 saw an 8% trimming at prices between $20.67 and $25.49 and last quarter saw an additional 8% trimming at prices between $21 and $32.50. This quarter, almost 25% of the remaining position was sold at prices between $29.68 and $34.64.  The stock currently trades at $32.87. Einhorn is realizing large short-term gains from this position.Oil States International (OIS): OIS is a 2.41% of the US long portfolio stake established in Q1 2013 at an average purchase price of $77.16. This quarter saw minor selling. The stock currently trades at $54.92. In the Ira Sohn conference in May 2013, Einhorn highlighted this position saying the shares could be worth as high as $155 per share, if the accommodation business it owns is spun-off as an REIT. The business was spun-off as Civeo Corporation in May.NOTE: The performance implied by the quoted prices above understates the actual performance due to the effect of the spin-off of CVEO from OIS. The spin-off terms called for OIS shareholders to receive two shares of CVEO for every share of OIS held.Spirit Aerosystems (SPR): SPR is a 1.26% position that had seen consistent buying since the stake establishment in Q1 2013. The position was increased by just over 40% in Q4 2013 at prices between $21.50 and $26 and another 20% in Q1 2014 at prices between $26.51 and $35.89. This quarter the pattern reversed as the stake was reduced by 29% at prices between $32.57 and $39.73. The stock currently trades at $41.78.Sunedison Inc. (SUNE): The very small 0.23% of the US long portfolio position in SUNE established in Q4 2013 was increased to a fairly large 3.34% position in Q1 2014 at an average entry price of $15.55. Last quarter, the stake was increased by around 79% at prices between $16.74 and $22.87. This quarter saw very minor selling. The stock currently trades at $21.48. SUNE completed the IPO of its yield-co TerraForm Power (TERP) in July.Take-Two Interactive (TTWO): TTWO was first purchased in Q4 2013 at prices between $18.81 and $22.38. The position was increased by ~15% in Q1 2014 at prices between $16.88 and $22.26 and the stock currently trades at $27.03. This quarter saw a very small decrease. The stake is at 1.49% of the US long portfolio.Kept Steady:AerCap Holdings N.V. (AER): AER is a small 1.31% position established last quarter at prices between $38.91 and $48.14 and it currently trades at $43.22.Amdocs (DOX): The 1.52% DOX position was established in Q2 2013 at prices between $34 and $37. It was increased by just over 50% in Q4 2013 at prices between $40 and $45. The stock currently trades at $47.41.Anadarko Petroleum (APC): APC is a 1.70% of the US long portfolio position purchased in Q4 2013 at an average cost-basis of $78.55. It was increased by ~22% in Q1 2014 at prices between $78 and $87. Half the stake was disposed of last quarter at prices between $85 and $112. The stock currently trades at around $89.39.Civeo Corporation (CVEO): CVEO is a 1.03% of the US long portfolio position established last quarter as a result of its spin-off from Oil States International. Einhorn held 2.75M shares of Oil States and per the spin-off terms received 5.5M shares (2:1 ratio). It is interesting that Einhorn has added to the position as the share count is at 6.15M shares. CVEO started trading in May at $22.80 and the stock is currently at $10.24. On October 9th, Greenlight reported a significant stake increase in CVEO through a 13D .Einstein Noah (BAGL): BAGL is a very long-term holding that was kept steady from 2009 to Q2 2013. About 14% of the position was sold at $15.51 (1.5M shares) through a secondary underwriting in August 2013. Q4 2013 saw another ~27% stake reduction at prices between $14.50 and $18.11. The remaining position was at 1.96% of the US long portfolio (~6.7M shares) as of Q3 2014. On November 5, 2014, the shares were tendered at $20.25 following the acquisition offer from JAB Holding.Lam Research (LRCX): LRCX is a 2.85% of the US long portfolio position first purchased in Q1 2014 and more than doubled last quarter. Greenlight’s overall cost-basis is $54.07 and the stock currently trades at $79.29. The buy thesis boils down to foreseeing excess demand for Lam’s etchers and deposition tools going forward.Liberty Global Class A & Class C (LBTYA) (LBTYK): Liberty Global position accounts for 2.61% of the US long portfolio. Einhorn had a position in Virgin Media (VMED) from Q2 2012 onwards and the Liberty Global position was established as a result of the acquisition of VMED by Liberty Global. The VMED position roughly doubled in around twelve months of ownership. In Q1 2014, the net position remained steady although the LBTYA position was reduced and LBTYK increased (after stock splits in March 2014).URS Corporation (URS): The 1.59% URS stake established in Q2 2013 at prices between $43 and $50 was increased by ~16% in Q4 2013 at prices between $50 and $55. Q1 2014 saw a ~50% stake increase at prices between $42.51 and $53.28. The stock currently trades at $54.20.Voya Financial (VOYA) previously ING US: The 2.28% VOYA position was established in Q2 2013 at an average cost-basis of $20.29. Q1 2014 saw a ~5% trimming at prices between $33 and $37. The stock currently trades at $41.59.Other very small positions (less than 0.5% of the US long portfolio) include Biofuel Energy (BIOF), Colony Financial Inc. (CLNY), FCB Financial Holdings (FCB), Fifth Street Finance (FSC), Intrexon Corporation (XON), Kennametal Inc. (KMT), Talmer Bancorp (TLMR), and Vodafone Group (VOD).Per Greenlight’s Q3 2014 letter, the top disclosed long positions in the partnership are Alpha Bank (ALBKY), Apple, Gold, Marvell Technology, Micron Technology, Resona Holdings (RSNHF), and Sunedison.  In addition to partner stakes, the fund also invests the float of Greenlight Capital RE (GLRE).The spreadsheet below highlights changes to Greenlight’s US stock holdings in Q3 2014:: 1) YTD performance is 2.2% as of Q3 2014, 2) Added to “bubble basket” - includes AMZN short, 3) X, MNK, and CVEO are the material losers in the quarter, 4) CNX & EMC - new medium sized positions - CNX entry at $38.88 and EMC entry at $25.79, 5) Keurig Green Mountain short exit - primary thesis about losing monopoly was wrong - entry average was $47.59 and exit average was $67.02, 6) OTHER EXITS: CSC long - entry at $27.89 and exit at $51.04, Tempur Sealy Intl long - entry at $39.81 and exit at $59.46, Also exited following shorts: Bell Alliant, Galencia AG, Joy Global, Lululemon Athletica, and Under Armor. LARGEST DISCLOSED POSITIONS: Alpha Bank, Apple, Gold, Marvell Technology, Micron Technology, Resona Holdings, and Sunedison, LONG/SHORT ratio: 114% long and 75% short."