Every quarter, many money managers have to disclose what they've bought and sold, via 13F filings. Their latest moves can shine a bright light on smart stock picks.
Today let's look at highly regarded value investor David Einhorn and Greenlight Capital, which he founded. Einhorn's investing success as well as his advocacy of financial transparency and accountability have attracted many fans. Although he isn't afraid to short stocks, he prefers going long, and looks for situations where he feels a stock is mispriced.
The company's reportable stock portfolio totaled $6.4 billion in value as of June 30, 2012. The top three holdings, making up about 28% of the overall portfolio's value, are Apple, Seagate Technology
So what does Greenlight's latest quarterly 13F filing tell us? Here are a few interesting details:
New holdings include Hess and Genworth Financial
Among holdings in which Greenlight increased its stake were solid-state storage specialist Seagate Technology and Marvell Technology
Chip maker Marvell took a 15% hit recently, upon delivering disappointing earnings. It didn't help that it reduced its outlook, citing declining PC sales. Some are hopeful about its partnership with LED specialist Cree to produce a dimmable LED bulb, and Marvell has also been rewarding shareholders by buying back stock.
Greenlight reduced its stake in Best Buy, among others. The big-box electronics retailer's stock has averaged annual losses of about 15% over the past five years. It recently posted depressing second-quarter results, featuring revenue down 3% and profits off by 90%, due to store closings and layoffs. Observers are watching to see if its founder will be able to buy the company, as he's proposed doing.
Finally, Greenlight unloaded several companies, such as Dell, Research In Motion
Greenlight shed its modest position in supermarket company Roundy's, despite the company's fetching 9% dividend yield. The company has been posting disappointing earnings and has lowered its projections, and carries a lot of debt to boot. The grocery business is a tough one, with generally low profit margins.
We should never blindly copy any investor's moves, no matter how talented the investor. But it can be useful to keep an eye on what smart folks are doing. 13-F forms can be great places to find intriguing candidates for our portfolios.