"Tracking David Einhorn’s Portfolio – Q2 2016 Update"
"David Einhorn's US long portfolio decreased from $5.90B to $5.45B this quarter.Greenlight's long/short ratio is at 96% long and 69% short compared to 99% long and 79% short last quarter.Greenlight substantially increased AerCap, General Motors, and Mylan while dropping Macys and reducing Apple, Consol Energy, and Michael Kors.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 08/15/2016. Please visit our  series for an idea on his investment philosophy and our  for the fund’s moves during Q1 2016.Greenlight Capital’s US long portfolio stood at $5.45B this quarter. It is down 7.57% compared to $5.90B as of last quarter. The long/short ratio shifted further to the long side this quarter: 96% long and 69% short compared to 99% long and 79% short as of Q4 2015 - net exposure at 27% compared to 20% last quarter and 14% EOY2015. The top five holdings represent 40.83% of the US long portfolio. The number of 13F stakes decreased from 44 to 43.Einhorn’s Q2 2016 letter reported that the fund lost 2.6% in the quarter. 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:Calpine Corporation (CPN) and Rite Aid (RAD): These are small (less than ~2% of the portfolio each) new stakes purchased this quarter. The 1.53% CPN position was purchased at prices between $13.41 and $16 and the stock is now below that range at $12.77. RAD is a 1.42% stake established at prices between $7.49 and $8.19 and the stock currently trades at $7.70.Amaya Inc. (AYA), Amerco (UHAL), AmerisourceBergen (ABC), ARRIS International plc (ARRS), FMC Corporation (FMC), Hertz Global (HTZ), Liberty Global LiLac (LILAK) (LILA), Perrigo plc (PRGO), and Quorum Health (QHC): These are very small (less than ~1% of the portfolio each) positions established 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. Both positions were substantially increased as well. QHC is down over 50% since the spinoff.Stake Disposals:Macys Inc. (M): Macys was a fairly large 5.69% of the 13F portfolio stake purchased in Q4 2015 at a cost-basis of $45.69. The exit this quarter was at $32.08. The stock currently trades at $40.70. Greenlight realized losses.Note: Greenlight’s Q2 2016 letter discusses this exit. Basically, they believed the firm would have easy comparisons in 2016 but management guidance invalidated that thesis. Part of their original thesis was also that an eventual REIT spinoff of the real estate assets would unlock tremendous value. Macys added a real estate expert to the board in March.Oil States International (OIS): OIS was a fairly large stake established in Q1 2013 at an average purchase price of $77.16. In Q4 2014, the position was almost eliminated at prices between $37.12 and $56.58. Q4 2015 saw a huge ~235% increase at prices between $19.68 and $27.68. The exit this quarter was at prices between $29 and $36.52. The stock currently trades at $32.65.Note: Civeo (CVEO) was spun off from OIS in July 2015. The spin-off terms called for OIS shareholders to receive two shares of CVEO for every share of OIS held. The prices quoted above are adjusted for that transaction.Sunedison Inc. (SUNEQ) & Notes: The position in SUNEQ was first purchased in Q4 2013 with the bulk the following quarter at an average entry price of $15.55. In Q2 2014, the stake was increased by another 79% at prices between $16.74 and $22.87. Q1 2015 saw a further ~18% increase at prices between $14.30 and $22.86. In Q3 2015, there was an about turn: ~25% reduction at prices between $6.66 and $31.84. Last quarter saw a ~13% increase but the position was sold out this quarter. The 13F report also showed a very small position in Sunedison Notes which was also eliminated.Note: SUNEQ filed for Chapter 11 bankruptcy protection in April. Greenlight had added a director to SUNEQ board but in their Q1 2016 letter disclosed the action was too late as the patient was already terminally ill.Ingram Micro (IM): IM was a very small 0.69% of the US long portfolio position that saw a ~13% reduction last quarter at prices between $27 and $37. The elimination this quarter was at prices between $33 and $36. The stock is now at $34.54.Note: In February, Tianjin Tianhai agreed to acquire IM in a $38.90 all-cash deal.Allergan plc (AGN) and EMC Corporation (EMC):  These were small merger-arbitrage stakes established in Q4 2015. It is rare for the firm to dip into such situations. Both stakes were increased last quarter but disposed of this quarter.American Capital Agency (AGNC) and Baxter International (BAX):  These were small stakes established in Q4 2015 and increased significantly last quarter. This quarter saw an about turn as both positions were exited.Note: Greenlight’s Q2 2016 letter mentioned that the AGNC exit was at a small gain. It was purchased at a cost-basis of $17.41 (0.77 times BV). They chose to exit as they view the acquisition of external manager as being a negative.Globalstar Inc. (GSAT): GSAT was a very small 0.28% of the portfolio position established last quarter but eliminated this quarter.Stake Increases:AerCap Holdings N.V. (AER): AER is a large (top three) 7.02% position established in Q2 2014 at prices between $38.91 and $48.14. It was increased by ~68% in Q4 2014 at prices between $36.68 and $45.22 and another ~50% the following quarter at prices between $37.84 and $45.94. Q3 2015 also saw another ~50% increase at prices between $37.71 and $48.49. Q4 2015 saw a ~12% trimming while the last two quarters have seen a ~40% increase at prices between $25.54 and $43.16. The stock currently trades at $38.55. For investors attempting to follow Einhorn, AER is a good option to consider for further research.Dillard’s (DDS): The 2.16% DDS position had seen a ~40% increase in Q4 2015 at prices between $65.87 and $93.77. Last quarter saw an about-turn: ~10% trimming at prices between $61.24 and $87.74. This quarter saw a ~24% increase at prices between $55.45 and $87.74. The stock is now at $69.63.DSW Inc. (DSW): DSW is a small 1.65% of the portfolio position established in Q4 2015 at prices between $21.62 and $26.34 and increased by ~21% this quarter at prices between $19.20 and $27.64. The stock currently trades at $24.35.General Motors (GM): GM is Greenlight’s second-largest position at 8.94% of the portfolio. The original stake was increased by ~55% in Q2 2015 at prices between $33.23 and $37.50 and another ~11% the following quarter at prices between $27.28 and $33.23. Q4 2015 saw a ~15% trimming while the last two quarters have seen a combined ~24% increase at prices between $26.90 and $34.01. The stock currently trades at $31.71. For investors attempting to follow Einhorn, GM is a good option to consider for further research.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.Hatteras Financial (HTS): HTS is a 2.28% of the US long portfolio stake established last quarter at a cost-basis of $12.34. This quarter saw a ~21% increase at prices between $14.25 and $16.61.Note: Annaly (NLY) agreed to acquire HTS in April and that transaction closed last month.Mylan NV (MYL): MYL is a fairly large 3.92% of the portfolio position established in Q4 2015 at a cost-basis of $45.32. This quarter saw a ~70% increase at prices between $38.62 and $48.80. The stock is currently at $48.53.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. Last quarter saw a ~20% increase at prices between $26 and $37 and this quarter saw another ~13% further increase at prices between $23.38 and $33.27. The stock currently trades at $28.77.Chemours Co. (CC) and Community Health Systems (CYH):  CC and CYH are currently at 2.48% and 0.53% of the portfolio respectively. The CC position saw a ~85% increase this quarter at prices between $7 and $10.44 and the stock is now at $12.12. CYH position was more than doubled at prices between $12 and $17.50 and it currently trades at $10.78.Note 1: The prices quoted above for Community Health Systems are adjusted for the spinoff of Quorum Health in April.Note 2: For Chemours, the overall cost-basis is $6.58. The buy thesis is based on earnings reaching ~$2 by 2017. Greenlight also believes that the litigation threat is overstated.Stake Decreases:Aecom Technology (ACM): ACM is a 1.79% stake first purchased in Q3 2014 at prices between $31.66 and $38.13 and more than doubled the following quarter at prices between $28.12 and $33.91. Q4 2015 saw a 50% reduction at prices between $27.31 and $32.09. The stock currently trades at $33.44. There was a ~5% trimming this quarter.Apple Inc. (AAPL): AAPL is Einhorn’s largest position at 12.02% 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 the last quarter there was a ~31% increase at prices between $93 and $110. This quarter saw a ~17% trimming at prices between $90 and $112. The stock currently trades at $109.Avangrid Inc. (AGR) previously UIL Holdings (UIL): AGR is a medium-sized 2.81% 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 $35.32 and $40.92. The stock currently trades above those ranges at $42.95. Last quarter saw a one-third stake reduction at prices between $36.72 and $42.01 and that was followed with a ~5% trimming this quarter.Note: UIL merged with Iberdrola USA to form the new entity Avangrid. 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.Consol Energy (CNX): CNX is a fairly large 6.49% stake (top-five) purchased in Q3 2014 at prices between $36.53 and $46.07.  In Q4 2014, the position was increased by over 170% at prices between $32.13 and $41.61 and the following quarter saw a further ~55% increase at prices between $26.56 and $34.34. Q2 2015 had also seen a ~11% increase at prices between $21.74 and $33.34 and that was followed by another ~30% increase the following quarter at prices between $9.41 and $21.79. This quarter saw a ~26% reduction at prices between $10.79 and $16.09. The stock currently trades at $17.86.Note: Regulatory 13G/A filing on 08/15/2016 shows the current position at 18M shares (~7.9% of the business). This is compared to 22M shares in the 13F.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. Last quarter saw another about-turn: ~55% reduction at prices between $40 and $60 and that was followed with another ~12% trimming this quarter. The stock currently trades at $57.80 and the stake is at ~1% of the US long portfolio.Michael Kors Holdings (KORS): KORS is a fairly large 4.39% 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 $38.06 and $45.37. Q4 2015 saw another 27% increase at prices between $38.53 and $43.89. There was a ~25% selling last quarter at prices between $35.57 and $58.50 and that was followed with another ~28% reduction this quarter at prices between $40.70 and $57. The stock currently trades at $49.90.Take-Two Interactive (TTWO): TTWO was first purchased in Q4 2013 at prices between $18.81 and $22.38. The position was decreased by ~11% in Q2 2015 at prices between $23.70 and $28.62 and another 25% in Q4 2015 at prices between $28.54 and $36.49. The stock currently trades at $41.22. The stake is at ~1.90% of the 13F portfolio. Last quarter saw a ~9% trimming while this quarter saw a very minor ~4% further reduction.Time Warner Inc. (TWX): TWX is a large (top five) 6.36% of the US long portfolio stake. It was established in Q4 2014 at a cost-basis of $72.72. Q4 2015 saw a ~69% increase at prices between $63.41 and $77.30. Last two quarters have seen a combined ~30% reduction at prices between $60 and $77. The stock currently trades at $81.05.Tri Pointe Group (TPH): TPH is a very small ~1% of the US long portfolio stake established in Q4 2014 at prices between $12.73 and $15.34 and increased by ~9% the following quarter at prices between $13.59 and $16.03. The stock currently trades at $13.68. There was a minor ~6% trimming this quarter.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.Yelp Inc. (YELP):  YELP is a 1.62% of the portfolio stake established over the last two quarters at a cost-basis of $21.16. This quarter saw a ~10% trimming at prices between $19.42 and $30.36. The stock is now at $37.54.Terraform Global (GLBL), TerraForm Power (TERP), and Vodafone Group (VOD): These are minutely small (less than ~0.5% of the US long portfolio each) stakes that were further reduced this quarter.Kept Steady:Green Brick Partners (GRBK): The 3.22% 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 with Greenlight owning 49% of the business. David Einhorn was appointed Chairman of the Board following the transaction.Liberty Global (LBTYA) (LBTYK): Liberty Global position accounts for 2.39% 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 quarter saw a minor ~6% increase.Gold Miner ETF (GDX): GDX stake is currently at ~4.19%. 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 $16.59 and $21.94. The stock currently trades at $30.78. Last quarter saw a ~3% trimming.Note: Einhorn also has a large holding (top-five) in physical gold.PVH Corporation (PVH): PVH is a 1.06% of the US long portfolio position purchased last quarter at a cost-basis of $75.65. It currently trades at $105.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.Twenty First Century Fox (FOXA): FOXA is a 2.37% stake that saw a ~35% increase in Q4 2015 at prices between $27 and $31. The stock is now at $25.46. Last quarter also saw a ~10% further increase.Yahoo Inc. (YHOO): The fairly large ~3% YHOO stake saw a huge ~120% stake increase last quarter at prices between $27 and $37. The stock is currently at $42.49.CNX Coal Resources LP (CNXC), Cigna Corporation (CI), Humana Inc. (HUM), and Lamar Advertising (LAMR): These are very small (less than ~1% of the US long portfolio each) stakes that were kept steady this quarter.Per Greenlight’s Q2 2016 letter, the top disclosed long positions are AerCap, Apple, CONSOL Energy, General Motors, and gold. The letter also identified the winners for the quarter: long positions in gold, gold stocks, and Consol Energy. Long position in Apple & Macys and short stakes in “an undisclosed oil fracking stock” and Amazon (AMZN) were losers.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 Q2 2016:Form 3/4, 13D/G/A thru 05/18/2016: CNX - 5/16/2016 Form 4 - Sold ~170K shares @ $15.1657. SUNE - 4/18/2016 13D/A - indicates ownership has dropped below 5%. FSAM - 4/24/2016 13G/A & Form 4 - sold some at $3.4082 - 0.: Q1 2016 return is 3%. Winners: CNX, KORS, bubble basket, and gold - they are bullish on gold. Losers: Resona Holdings (negative Japan interest rates a problem but 0.6x BV is a value) and Sunedison (added member to the board but underestimated the fragility - patient was in terminal condition).   NEW Longs: Re-initiated AGNC at $17.41 (0.77xBV) & HTS at $12.34 (0.64xBV) - MREITS - previously owned in 2014. PVH at $75.65 - purchased at 11x2016 estimates - Calvin Klein growth in Europe and Tommy Hilfiger joint venture interest purchase should both be beneficial. YELP at $21.16. Believes revenue should double by 2019 and it is trading at depressed valuation partly because of a negative documentary. Also new natural gas long macro play. SHORT: PXD short confirmed. Daily Mail & General Trust multi-year shorts covered unsuccessfully. JCP short covered successfully. Bubble basket - successful - includes Veeva & MobileEye. GMCR minor loss - JAB holding acquisition offer.  EXITS: CBI with a small loss and SNC-Lavalin with a small gain. Delta Lloyd sold at breakeven - victim of European negative bond yields. Greek Banks - sold at almost complete loss. ON Semi with a small gain - doesn’t believe Fairchild acquisition is beneficial. Largest disclosed longs: Apple, CONSOL Energy, General Motors, gold and Time Warner. Long/Short Ratio: 99% long and 79% short."