"Tracking David Einhorn’s Portfolio – Q3 2016 Update"
"David Einhorn's US long portfolio decreased from $5.45B to $5.23B this quarter.Greenlight's long/short ratio is at 108% long and 80% short compared to 96% long and 69% short last quarter.Greenlight substantially increased Amerco, Calpine, and Rite Aid while dropping Hatteras Financial and Twenty First Century Fox.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 11/14/2016. Please visit our  series for an idea on his investment philosophy and our  for the fund’s moves during Q2 2016.Greenlight Capital’s US long portfolio stood at $5.23B this quarter. It is down ~4% compared to $5.45B as of last quarter. The long/short ratio has shifted significantly to the long side this year: 108% long and 80% short - net exposure at 28% compared to 14% EOY2015. The top five holdings represent ~43% of the US long portfolio. The number of 13F stakes decreased from 43 to 35.Einhorn’s Q3 2016 letter reported that the fund returned 3.4% in the quarter. YTD, they are up 3.8% compared to up 7.8% for the S&P 500 Index. Since inception in May 1996, the fund is up ~16.5% annualized net-of-fees and expenses. To learn about David Einhorn and the perils of shorting, check-out his “”.New Stakes:The Geo Group (GEO) and United States Steel (X): These are the two new positions this quarter. GEO is a minutely small 0.13% portfolio stake established at prices between $19.50 and $35 and the stock is now at $31.64. X is a 1.11% position purchased at prices between $16 and $27.50 and the stock is now at $28.78. They have both spiked since the quarter ended: ~50% increase for United States Steel and ~25% for Geo Group.Stake Disposals:Hatteras Financial (HTS): HTS was a 2.28% of the US long portfolio stake established in Q1 2016 at a cost-basis of $12.34. Last quarter saw a ~21% increase at prices between $14.25 and $16.61. Annaly (NLY) agreed to acquire HTS in April ($15.85 per share for the all-cash option) and that transaction closed in July, thus eliminating the position.Community Health Systems (CYH):  CYH was a very small 0.53% of the portfolio position. The stake was more than doubled last quarter at prices between $12 and $17.50. The disposal this quarter was at prices between $10 and $13.30. CYH currently trades at $5.81.Note: The prices quoted above for Community Health Systems are adjusted for the spinoff of Quorum Health in April.Twenty First Century Fox (FOXA): FOXA was a 2.37% stake. The position was built from Q2 2015 at prices between $24.50 and $34.50. The stake was sold out this quarter at prices between $23.50 and $28. The stock is now at $27.80.AmerisourceBergen (ABC), Hertz Global (HTZ), Humana Inc. (HUM), Lamar Advertising (LAMR), Liberty Global LiLac (LILAK) (LILA), Perrigo plc (PRGO), and Vodafone Group (VOD): These very small (less than ~1% of the portfolio each) positions were disposed of this quarter.Note: The original Vodafone stake goes back to 2009. Greenlight disclosed in the Q3 2016 letter that the position returned ~20% annualized over the holding period.Stake Increases:AerCap Holdings N.V. (AER): AER is a large (top three) 9.39% position. It was established in Q2 2014 at prices between $39 and $48. Q4 2014 thru Q3 2015 saw a combined ~270% increase at prices between $36.50 and $48.50. YTD, there has been another ~73% increase at prices between $25.50 and $42. The stock currently trades at $45.17.Amerco (UHAL), Calpine Corporation (CPN) and Rite Aid (RAD): These three positions were established last quarter and significantly increased this quarter. The 1.36% of the portfolio UHAL stake was established at prices between $337 and $380 and increased by ~180% this quarter at prices between $321 and $397. The stock currently trades at $343. The 2.72% CPN position was purchased at prices between $13.50 and $16 and almost doubled this quarter at prices between $12 and $15. The stock is now just below those ranges at $11.75. RAD is a ~2% stake established at prices between $7.50 and $8.20 and increased by ~30% this quarter at prices between $6.85 and $8.21. The stock currently trades at $7.74. For investors attempting to follow Einhorn, these are good options to consider for further research.Mylan NV (MYL): MYL is a fairly large 4.66% of the portfolio position established in Q4 2015 at a cost-basis of $45.32. Last quarter saw a ~70% increase at prices between $38.50 and $49 and that was followed with another ~30% increase this quarter at prices between $38 and $50. The stock is currently below those ranges at $36.68.Note: The buy thesis projects an earnings expectation of around $7 in 2018.Voya Financial (VOYA) previously ING US: The 2.25% VOYA position was established in Q2 2013 at a cost-basis of $20.29. Q1 2016 saw a ~20% increase at prices between $26 and $37 and last quarter saw another ~13% further increase at prices between $23 and $33.50. The stock currently trades at $37.56. There was a very minor ~5% further increase this quarter.Stake Decreases:Aecom Technology (ACM): ACM is a ~1% stake first purchased in Q3 2014 at prices between $31.50 and $38 and more than doubled the following quarter at prices between $28 and $34. Q4 2015 saw a 50% reduction at prices between $27 and $32 and that was followed with another roughly one-third reduction this quarter at prices between $27.50 and $36. The stock currently trades at $37.02.Apple Inc. (AAPL): AAPL is Einhorn’s largest position at 11.22% of the US long portfolio. The stake was first purchased in the low-40s price-range in 2010. It has seen several profitable trades over the years. The six quarters thru Q2 2015 had seen a combined ~55% reduction at prices between $72 and $133. In Q3 2015, the pattern reversed: ~59% increase at prices between $103 and $132. Q4 2015 saw a ~47% reduction at prices between $105 and $123 while in Q1 2016 there was a ~31% increase at prices between $93 and $110. Last two quarters have seen a combined ~35% selling at prices between $90 and $116. The stock currently trades at $112.Avangrid Inc. (AGR) previously UIL Holdings (UIL): AGR is a 2.47% of the portfolio stake. It was established in Q1 2015 at prices between $31.50 and $41.50 and increased by ~92% the following quarter at prices between $35 and $41. YTD saw a ~60% reduction at prices between $36.50 and $46.50. The stock currently trades at $37.24.Note: UIL merged with Iberdrola USA to form the new entity Avangrid which started trading last December. UIL shareholders got $10.50 per share cash and one share of AGR for each UIL share held. The prices quoted above are adjusted for this.Chemours Co. (CC):  CC is currently a 2.48% portfolio stake. It saw a ~85% increase last quarter at prices between $7 and $10.50 and the stock is now at $23.24. This quarter saw marginal trimming. Greenlight is sitting on huge gains.Note: Greenlight’s cost-basis on CC is $6.58. The buy thesis was based on earnings reaching ~$2 in 2017 and ~$3 in 2018. Greenlight also believes that the litigation threat is overstated.Consol Energy (CNX): CNX is a fairly large 6.56% stake (top-five) purchased in Q3 2014 at prices between $36.50 and $46.  The position was increased by over 170% in the following quarter at prices between $32 and $41.50. H1 2015 saw an additional ~70% increase at prices between $22 and $34 and that was followed by another ~30% increase in Q3 2015 at prices between $9.50 and $22. Last two quarters have seen a ~40% combined reduction at prices between $8.50 and $19.50. The stock currently trades at $19.10.Dillard’s (DDS): The ~2% DDS position had seen a ~40% increase in Q4 2015 at prices between $66 and $94. Last quarter saw a ~24% further increase at prices between $55.50 and $88. The stock is now at $71.  There was a marginal trimming this quarter.DSW Inc. (DSW): DSW is a small 1.40% of the portfolio position established in Q4 2015 at prices between $21.50 and $26.50 and increased by ~21% last quarter at prices between $19 and $28. There was a ~16% selling this quarter at prices between $20.50 and $26. The stock currently trades at $23.07.General Motors (GM): GM is Greenlight’s second-largest position at 10.32% of the portfolio. The original stake was increased by ~55% in Q2 2015 at prices between $33 and $37.50 and another ~11% the following quarter at prices between $27 and $33.50. Last three quarters had also seen a combined ~22% increase at prices between $27 and $34. The stock currently trades at $33.01. For investors attempting to follow Einhorn, GM is a good option to consider for further research. This quarter saw a marginal reduction.Note: GM has seen a previous roundtrip: A huge 9.55% stake was disposed of in Q1 2014 at an average exit price of $35.76 compared to an average entry price of $23.87.Michael Kors Holdings (KORS): KORS is a 2.74% of the US long portfolio position established in Q2 2015 at prices between $42 and $66 and almost doubled the following quarter at prices between $38 and $45.50. Q4 2015 saw another 27% increase at prices between $38.50 and $44. YTD has seen a two-thirds reduction at prices between $35.50 and $58.50. The stock currently trades at $48.14.PVH Corporation (PVH): PVH is a ~1% of the US long portfolio position purchased in Q1 2016 at a cost-basis of $75.65. This quarter saw a ~14% trimming at prices between $92 and $111 and it currently trades at $108. Greenlight is starting to harvest gains.Note: The stake in the global apparel company was established at 11-times projected 2016 earnings. Greenlight expects Calvin Klein’s growth in Europe and Tommy Hilfiger Chinese joint venture interest purchase to result in good earnings growth going forward.Take-Two Interactive (TTWO): TTWO was first purchased in Q4 2013 at prices between $18.50 and $22.50. The position was decreased by ~11% in Q2 2015 at prices between $23.50 and $29 and another 25% in Q4 2015 at prices between $28.50 and $36.50. The position was again reduced by ~50% this quarter at prices between $38 and $46. The stock currently trades at $48.03. The remaining stake is at ~1% of the 13F portfolio. Greenlight is harvesting gains.Time Warner Inc. (TWX): TWX is a large (top five) 5.88% of the US long portfolio stake. It was established in Q4 2014 at a cost-basis of $72.72. Q4 2015 saw a ~70% increase at prices between $63.50 and $77.50. YTD has seen a 40% combined reduction at prices between $60 and $81. The stock currently trades at $91.56.Tri Pointe Group (TPH): TPH is a very small 0.52% of the US long portfolio stake established in Q4 2014 at prices between $12.50 and $15.50. This quarter saw a 54% reduction at prices between $12 and $14. The stock currently trades at $11.54.Note: TPH is a homebuilder with significant exposure to the California market. It had an IPO in February 2013 and trading started at ~$19 per share. In November 2013, Weyerhaeuser (WY) split-off its homebuilder subsidiary in a Reverse Morris Trust transaction with TPH.Gold Miner ETF (GDX): GDX stake is currently at ~4%. It is a very long-term position that has wavered over the years. Last significant activity was a ~35% increase in Q4 2014 at prices between $16.50 and $22. The stock currently trades at $21.48. This quarter saw a marginal trimming.Note: Einhorn also has a large holding (top-five) in physical gold.Yahoo Inc. (YHOO): The fairly large 3.61% YHOO stake saw a huge ~120% stake increase in Q1 2016 at prices between $27 and $37. The stock is currently at $41.11. This quarter saw a marginal reduction.Yelp Inc. (YELP):  YELP is a 1.83% of the portfolio stake established during H1 2016 at a cost-basis of $21.16. Last quarter saw a ~10% trimming at prices between $19.50 and $30.50 and that was followed with another ~21% selling this quarter at prices between $29 and $42. The stock is now at $38.33.ARRIS International plc (ARRS), Quorum Health (QHC), Terraform Global (GLBL), and TerraForm Power (TERP): These are very small (less than ~1% of the US long portfolio each) stakes that were further reduced this quarter.Note: Quorum Health (QHC) is a spinoff from Community Health Systems (CYH) that started trading in April. The terms called for CYH shareholders to receive one share for every four shares held. Greenlight had CYH shares for which they received QHC shares in that ratio. QHC is down ~50% since the spinoff.Kept Steady:Green Brick Partners (GRBK): The 3.81% of the US long portfolio GRBK stake was acquired as a result of BioFuel Energy’s JGBL Builder Finance acquisition and rename transaction. The deal closed (October 2014) with Greenlight owning 49% of the business. David Einhorn was appointed Chairman of the Board following the transaction.IAC Interactive (IAC): IAC was a minutely small 0.30% of the US long portfolio position established in Q1 2013. In Q2 2013, the stake was substantially increased at prices between $43.50 and $51.50. The position has wavered since. Q2 2015 saw a ~37% reduction at prices between $67 and $81. The pattern reversed in Q4 2015: two-thirds increase at prices between $59 and $72. Q1 2016 saw another about-turn: ~55% reduction at prices between $40 and $60 and that was followed with another ~12% trimming last quarter. The stock currently trades at $68.46 and the stake is at ~1% of the US long portfolio.Liberty Global (LBTYA) (LBTYK): Liberty Global position accounts for 2.89% 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. Last significant activity was in Q1 2016 when the stake saw a ~6% increase.Amaya Inc. (AYA), CNX Coal Resources LP (CNXC), Cigna Corporation (CI), and FMC Corporation (FMC): These are very small (less than ~1.5% of the US long portfolio each) stakes kept steady this quarter.Per Greenlight’s Q3 2016 letter, the top disclosed long positions are AerCap, Apple, CONSOL Energy, General Motors, and gold. The letter also identified the winners and losers for the quarter: Long stakes in Apple, Chemours, and Consol Energy were winners while several short positions including Pioneer Natural Resources (PXD) were losers. Einhorn believes the operating costs disclosed by PXD and Continental Resources (CLR) are suspect.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 2016:: Q2 2016 return is -2.6%. Winners: gold, gold stocks, and CNX. Losers: Mostly in the short book - undisclosed oil fracker short and Amazon short. In the long book, Apple & Macys.   NEW Longs: CC cost-basis $6.58 - earnings should reach $2 by 2017 & litigation threat is overstated. SHORT: No new disclosures.  EXITS: Macys at $32.08 - easy comparison thesis invalidated by 2016 guidance. AGNC - small gain - acquired external manager which was bad news but the stock popped. BAX - at a gain as the stock reached fair value. IM - small position at a good return - getting acquired by Tianjin Tianhai. OIS - loss - victim of oil commodity rout & bad Civeo investment that was spunoff. ISRG short - at a loss. UA short - at a nice profit. URI short - sizable winner over a couple of years  Largest disclosed longs: AerCap, Apple, CONSOL Energy, General Motors, and gold. Long/Short Ratio: 96% long and 69% short."