Apple Inc. (AAPL) and Yelp Inc (YELP) Are Part of Billionaire David Einhorn’s Major Moves

David Einhorn‘s Greenlight Capital had a tough 2015 with losses amounting to 20.2%, even though the annualized returns since its inception in 1996 still stood at 16.5%. The first quarter of this year started with the continuation of this downtrend, but the situation reversed half way through and Greenlight was in the green at the end of March returning 3%, net of fees and expenses, for the quarter. This warrants a look at the firm’s salient moves during the quarter involving large increases in holdings and new positions.

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#5 Yelp Inc (NYSE:YELP)

– Shares Owned by Greenight Capital (as of March 31): 3.23 Million

– Value of Holding (as of March 31): $64.29 Million

Greenlight hiked its stake in Yelp by eight times during the January-March period as it believed that the stock received a temporary setback due to missed earnings expectations and an upcoming negative documentary. Einhorn is positive about the changes that the Yelp Inc (NYSE:YELP) management is bringing about in the form of relocating salesforce to lower-cost cities and adding more transaction-based revenue, according to his recent letter to Greenlight investors. So far this year, shares are down by about 12.6%. Another fund that is upbeat about Yelp Inc (NYSE:YELP)’s future prospects is Eashwar Krishnan‘s Tybourne Capital Management, which held about 6.15 million shares of the search and review website at the end of March.

#4 American Capital Agency Corp. (NASDAQ:AGNC)

– Shares Owned by Greenight Capital (as of March 31): 4.80 Million

– Value of Holding (as of March 31): $89.42 Million

The American Capital Agency Corp. (NASDAQ:AGNC) holding was tripled by Greenlight during the first quarter and represented about 1.52% of its equity portfolio. The rationale behind the bet on the $6.36 billion REIT focused on single-family residential agency mortgage-backed securities was the stock depreciation owing to fears of potential Fed rate hikes. So far this year, the company’s stock price is up by more than 10% despite American Capital Agency falling $0.04 short of earnings expectations by posting EPS of $0.52 in its first quarter financial results. The REIT also sports a hefty dividend yield of 12.52%. Unlike Greenlight Dimitry Balyasny‘s Balyasny Asset Management cut its stake in American Capital Agency Corp. (NASDAQ:AGNC) by 20% during the first quarter to about 2.17 million shares.

#3 Hatteras Financial Corp. (NYSE:HTS)

– Shares Owned by Greenight Capital (as of March 31): 6.29 Million

– Value of Holding (as of March 31): $89.95 Million

Moving on to Greenlight’s next big bet on Mortgage REIT, which had the same motivation as the prior one, the fund’s newly initiated stake amassed about 6.5% of the company’s outstanding float. Hatteras Financial Corp. (NYSE:HTS) offers its investors a dividend yield of 10.85% and the stock has rallied by nearly 26% since the start of this year. Around mid-April the news of a definitive merger agreement between Annaly Capital Management and Hatteras surfaced the markets. The transaction also received a unanimous approval from the boards of both companies. Mangrove Partners, managed by Nathaniel August, boosted  its stake in Hatteras Financial Corp. (NYSE:HTS) by 174% during the March quarter to 3.91 million shares.

Head on to the next page, where we will discuss Einhorn’s top two moves in the first quarter.

#2 Yahoo! Inc. (NASDAQ:YHOO)

– Shares Owned by Greenight Capital (as of March 31): 4.41 Million

– Value of Holding (as of March 31): $162.26 Million

Einhorn more than doubled his fund’s holding in Yahoo! Inc. (NASDAQ:YHOO), which represented about 2.75% of the portfolio at the end of March. The company is in the midst of an auction for its core assets and also an activist battle with Jeffrey Smith’s Starboard Value, which believed that the current Yahoo! board couldn’t be trusted with the sale, as they lack the appropriate expertise for such a transaction. After Yahoo! agreed to add four independent directors, including Smith himself, Starboard dropped its demand for the nine-director slate that it had purported earlier. Yahoo! Inc. (NASDAQ:YHOO)’s stock has surged by about 12.7% since the start of this year. Owl Creek Investment, which is led by Jeffrey Altman also upped its stake in the once thriving search engine company by 77% to 15.05 million shares during the March quarter.

#1 Apple Inc. (NASDAQ:AAPL)

– Shares Owned by Greenight Capital (as of March 31): 8.21 Million

– Value of Holding (as of March 31): $895.14 Million

Having hiked its Apple Inc. (NASDAQ:AAPL) holding by 30% during the January-March period, Greenlight clearly doesn’t think that the tech giant’s best days are behind it, even as sliding iPhone sales and market saturation have turned many investors bearish. Shares of Apple have tumbled down by about 17% since mid-April amid disappointing financial results and news that the company will stretch production cuts into the second quarter reached the market. Activist investor Carl Icahn, who had been one of the most bullish Apple Inc. (NASDAQ:AAPL) shareholders, exited the stock during the first quarter, due to concerns regarding its sales in China, as he said in a recent interview.

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