David Einhorn’s Greenlight Capital Exercises Caution Over Second Quarter

September 2nd, 2009
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Hedge fund manager Greenlight Capital sold out of a number of positions over the second quarter of 2009. Overall, the firm made purchases of $417mm, while selling $1,148mm, for a net change of $730mm. Since there seemed to be no broad trends regarding Greenlight Capital’s investments over the quarter, it is clear the firm screened equity investments on a company by company basis. The four new purchases made over the quarter include two insurers, a healthcare company, and a natural gas producer:
Cardinal Health Inc (CAH) - Change 3,971,173 Shares / $121.32 mm
Transatlantic Holdings Inc (TRH) - Change 325,000 Shares / $14.08 mm
ATP Oil & Gas Corp (ATPG) - Change 1,750,500 Shares / $12.18 mm
Endurance Specialty Holdings Ltd (ENH) - Change 256,359 Shares / $7.51 mm

While the firm only established four new equity positions over the quarter, it closed out of a staggering 21 positions. The largest of Greenlight Capital’s closed positions included:
streetTRACKS Gold Trust (GLD) - Change -4,209,090 Shares / -$380.00 mm
Target Corp (TGT) - Change -3,475,444 Shares / -$119.52 mm
Hess Corporation (HES) - Change -1,300,000 Shares / -$70.46 mm
Commscope Inc (CTV) - Change -3,717,890 Shares / -$42.24 mm
MEMC Electronic Materials Inc (WFR) - Change -3,643,849 Shares / $-64.90 mm

The firm’s Top 10 Holdings in order of largest amount held include Pfizer (PFE), URS Corp (URS), Teradata Corp (TDC), Wyeth (WYE), Cardinal Health Inc (CAH), Market Vectors Gold Miners ETF (GDX), Allegheny Energy Inc (AYE), EMC Corp (EMC), Einstein Noah Restaurant Group (BAGL) and Aspen Insurance Holdings Ltd (AHL). These $1.24 billion in value positions accounted for over 60% of Greenlight’s $2.02 billion portfolio.

As far as existing positions are concerned, there were identifiable trends regarding Greenlight Capital’s allocation. The firm added to its existing positions in healthcare and insurance, whereas it sold off a fair amount of its existing shares in technology. The largest changes of existing positions include:
Pfizer Inc (PFE) - $1.80mm held (11,987,000 shares); Change 6,057,000 Shares / $90.86 mm
EMC Corp (EMC) - $9.49mm held (7,244,000 shares); Change -5,576,000 Shares / -$73.05 mm
Wyeth (WYE) - $1.30mm held (2,860,000 shares); Change 1,430,000 Shares / $64.91 mm
MEMC Electronic Materials (WFR) - $6.49mm held (3,643,849 shares); Change -3,643,849 Shares / -$64.90 mm
URS Corp (URS) - $1.58mm held (3,194,924 shares); Change -1,240,000 Shares / -$61.40 mm
Aspen Insurance Holdings Limited (AHL) - $9.25mm held (4,140,000 shares); Change 1,761,468 Shares / $39.35 mm

Greenlight co-founder David Einhorn, whose claim to fame is the short of Lehman Brothers Inc. prior to its failure, adheres to a strict value-oriented investment philosophy. He founded the firm in 1996 with Co-President Jeffrey A. Keswin. The firm manages a series of value-oriented hedge funds and reinsurer Greenlight Capital Re.
For Detailed Investor Profiles on these Investors, click below:
Greenlight Capital
Related People: Bruce Gutkin; David Einhorn; Harry Brandler; James Lin; Jeffrey A. Keswin*; Nelson Heumann; Vinit Sethi
Related Entities: DME Advisors LP; Greenlight Capital Inc; Greenlight Masters LLC; Greenlight Private Equity Partners
Related Article Tags: Multi-Strategy, Long Short, Equity, Debt and Global Macro Hedge Fund News; Top Hedge Fund Portfolio Reports


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