"Tracking David Einhorn’s Portfolio – Q2 2014 Update"
"David Einhorn's US long portfolio stood at $7.18 this quarter, up 5% compared to $6.83B as of last quarter.Greenlight's long/short ratio remained almost steady at 115% long and 71% short.Greenlight substantially increased Sunedison Inc. and Lam Research positions while reducing Apple and Cigna.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 08/14/2014. Please visit our  series for an idea on how his holdings have progressed over the years and our  highlighting the fund’s moves during Q1 2014.Greenlight Capital’s US long portfolio stood at $7.18B this quarter. It is up about 5% compared to $6.83B as of last quarter: the long/short ratio shifted only marginally during the quarter - 115% long and 71% short as of Q2 2014 compared to 120% long and 71% short as of Q1 2014. The number of holdings in the portfolio remained steady at 41. The top five holdings represent close to 50% of the US long portfolio.Einhorn’s Q2 2014 letter reported that the fund returned 7.9% in Q1 2014 and 6.4% in H1 2014 - it returned 19.1% in 2013 net-of-fees - 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: 19.5% annualized returns (net of fees and expenses) since inception in 1996. To learn about David Einhorn and the perils of shorting, check-out his “”.  In addition to partner stakes, the fund also invests the float of Greenlight Capital RE (GLRE).New Stakes:AerCap Holdings N.V. (AER), Chemtura Corporation (CHMT), & Northstar Realty Financial Corporation (NRF): These three are small positions (less than 2% of the US long portfolio each) established this quarter. AER is a 1.42% position established at prices between $38.91 and $48.14 and it currently trades at $47.05. CHMT is a 1.06% position established at prices between $22.14 and $26.09 and it currently trades at $24.43. NRF is a 1.10% position established at prices between $14.40 and $17.30 and it currently trades at $18.05 (adjusted for 2-for-1 split in July).Civeo Corporation (CVEO): CVEO is a 2.15% of the US long portfolio position established this 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 now is at 6.15M shares. CVEO started trading in May at $22.80 and the stock is currently at $24.52.Time Inc. (TIME): Time Warner (TWX) spun-off Time Inc. (magazine publisher subsidiary) in June 2014. Greenlight established a 1.13% stake at prices between $20.85 and $24.43 and the stock currently trades at $23.82.Stake Disposals:Lorillard Inc. (LO) PUTS: LO PUTS were a brand new short position established last quarter when the share price varied between $47.31 and $55.26. It was disposed of this quarter when the share price varied between $52 and $65. The stock currently trades at $60.55. The nominal value of the stake was at ~1% of the US long portfolio. Although these puts were sold out this quarter, Einhorn is also known to have a direct short position in Lorillard. On July 15, 2014, Reynolds American announced plans to acquire Lorillard at $68.88 per share.Rite Aid Corporation (RAD): RAD was a 0.51% of the US long portfolio position eliminated this quarter. The original ~1% position (just over 20M shares) was established in Q2 2013 and was sold at progressively higher prices every quarter. All told, Einhorn disclosed in the Q2 2014 investor letter that his compounded return on RAD was +215%.Stake Increases:Conn’s Inc. (CONN): CONN is a 2.41 % of the US long portfolio position established last quarter at an average purchase price of $35.49. This quarter saw a 6% stake increase at prices between $38.59 and $49.87. The stock currently trades at $41.02. 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. Last quarter saw an about-turn as the position was reduced by 28% at prices between $65 and $80. This quarter, the pattern reversed: 36% stake increase at prices between $62 and $72.59. The stock currently trades at $67.39 and accounts for 1.81% of the US long portfolio.Lam Research (LRCX): LRCX is a 2.49% of the US long portfolio position first purchased last quarter and more than doubled this quarter. His overall cost-basis is $54.07 and the stock currently trades at $69.65. The buy thesis boils down to foreseeing excess demand for Lam’s etchers and deposition tools going forward.Marvell Technology Group (MRVL): MRVL is a top-three position at 7.90% of the US long portfolio that was first purchased in Q3 2011. Einhorn’s average cost-basis on MRVL is around $11. The stock currently trades at $13.33. This quarter saw a marginal stake increase. Einhorn continues to stay bullish on MRVL.National-Oilwell Varco (NOV): NOV is a 2.01% of the US long portfolio position first purchased last quarter at prices between $73 and $80. This quarter, the position was increased by around 42% at prices between $77 and $84 and the stock currently trades at $82.11.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.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 last quarter at an average entry price of $15.55. This quarter, the position was increased by around 79% at prices between $16.74 and $22.87. The stock currently trades at $21.34. SUNE completed the IPO of its yield-co TerraForm Power (TERP) in July.Stake Decreases: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% last quarter at prices between $78 and $87. Half the position was disposed of this quarter at prices between $85 and $112. The stock currently trades at around $108. Einhorn is harvesting substantial short-term gains from this position.Apple Inc. (AAPL) and CALLs: 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. Last quarter saw a ~13% stake reduction at prices between $71 and $80 and that was followed by a 35% reduction this quarter at prices between $74 and $94. The stock currently trades at $97.98. Einhorn is starting to realize large long-term gains from this position.Babcock & Wilcox (BWC): BWC is a 0.67% of the US long portfolio position first purchased in Q3 & Q4 2012 at prices between $23.37 and $27. This quarter, the stake was reduced by ~60% at prices between $31.89 and $35.49. The stock currently trades at $28.54. The substantial selling indicates a bearish bias.Chico’s FAS (CHS): CHS is still a very small stake at 0.44% of the US long portfolio. It was first purchased in Q4 2013 and substantially increased the next quarter. This quarter, the positon was reduced by 27%. The quick turn-around indicates a bearish bias. The stock has lost ~10% over the last year.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. This quarter saw another 26% stake reduction at prices between $75.64 and $92.11. The stock currently trades at $92.56.  Einhorn is harvesting large long-term gains from this position.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. The stock currently trades at $58.82. The remaining position is still significant at just over 2% of the portfolio.Intrexon Corporation (XON): XON is a very small position at 0.13% of the portfolio. The original 1% position was purchased in Q3 2013 at prices between $21 and $28. The position was almost eliminated over the last two quarters at prices between $15.30 and $26.29. The stock currently trades at $21.64.McDermott Intl. (MDR): MDR stake was increased by ~80% last quarter at prices between $7.37 and $9.18 but was reduced by 23% this quarter at prices between $6.73 and $8.35. The stock currently trades at $7.40. The original position was established in Q4 2013 at prices between $6.93 and $9.16.Micron Technology (MU): MU stake was purchased in Q4 2013 at an average cost-basis of $16.49. Last quarter saw an 8% trimming at prices between $20.67 and $25.49 and this quarter saw an additional 8% trimming at prices between $21 and $32.50.  The stock currently trades at $31.49. Einhorn is starting to realize large short-term gains from this position.Kept Steady:Aetna Inc. (AET): AET was a top-five position as of Q3 2013. In Q4 2013, the position was reduced by ~23% at prices between $60.75 and $69. Last quarter saw a 25% stake reduction at prices between $65 and $76 and the position currently stands at a still significant 3.64% of the US long portfolio. The original position was established in Q2 2012 at prices between $38.50 and $50. The stock currently trades at $77.72.Amdocs (DOX): The 1.49% 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 $45.42American Capital Agency (AGNC): The 1.71% AGNC stake was purchased last quarter at prices between $19.29 and $22.66 and the stock currently trades at $23.42.BP PLC (BP): BP is a 1.09% 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% last quarter at prices between $46 and $51. The stock currently trades at $47.39.EMC Corporation (EMC): The original position in EMC was established in Q4 2013 at around $24 per share. It was doubled last quarter at prices between $23.66 and $28.18. The stake currently stands at 2.17% and the stock is trading at $29.73.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 accounts for 1.51% of the US long portfolio. The stock currently trades at $14.31.Liberty Global Class A & Class C (LBTYA) (LBTYK): Liberty Global position accounts for 2.60% 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. Last quarter, the net position remained steady although the LBTYA position was reduced and LBTYK increased (after stock splits in March 2014).Market Vectors Gold Miner ETF (GDX): The 3.06% GDX position was increased by ~47% to a 4.04% position in Q2 2013 at prices between $23.42 and $35.06. The stock currently trades at $26.82. Einhorn also has previously disclosed a large holding in physical gold.Oil States International (OIS): OIS is a 2.46% of the US long portfolio stake established in Q1 2013 at an average purchase price of $77.16. The stock currently trades at $61.92. 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 1.52% position that has 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% last quarter at prices between $26.51 and $35.89. It was kept steady this quarter. The stock currently trades at $36.47. The activity indicates a clear bullish bias.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% last quarter at prices between $16.88 and $22.26 and the stock currently trades at $21.70. The stake is at 1.58% of the portfolio.Tempur Sealy International (TPX): TPX is 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. The stock currently trades at $58.22.URS Corporation (URS): The 1.35% 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. Last quarter saw a ~50% stake increase at prices between $42.51 and $53.28. The stock currently trades at $59.42.Voya Financial (VOYA) previously ING US: The 2.05% VOYA position was established in Q2 2013 at an average cost-basis of $20.29. Last quarter saw a ~5% trimming at prices between $33 and $37. The stock currently trades at $38.01.Other very small positions (less than 0.5% of the US long portfolio) include Biofuel Energy (BIOF), DSW Inc. (DSW), Fifth Street Finance (FSC), Talmer Bancorp (TLMR), and Vodafone Group (VOD).Per Greenlight’s Q2 2014 letter, their short portfolio was affected negatively due to what they believe are imprudent acquisition activities. The short positions mentioned are Safeway (SWY) which is getting acquired by Albertson’s, Martin Marietta Materials (MLM) which is acquiring Texas Industries (TXI), Lorillard (LO) which is getting acquired by Reynolds American (RAI), and Questcor Pharmaceuticals (QCOR) which is getting acquired by Mallinckrodt Pharmaceuticals (MNK).The spreadsheet below highlights changes to Greenlight’s US stock holdings in Q2 2014:"