We track quarterly 13F filings from hundreds of hedge funds and other notable investors, using the results to help us identify investing strategies; we have found, for example, that the most popular small cap stocks among hedge funds deliver an average excess return of 18 percentage points per year. We also like to go through individual managers’ filings for interesting stock picks; some argue that because the information in 13Fs is old (the most recent ones disclose many of a fund’s holdings as of the end of March) it isn’t that useful, though we’d claim that ownership can still serve similarly to a stock screen in identifying interesting picks for further research. However, it is of course possible to narrow the stocks listed in a 13F to those which a fund has owned for a fairly long period of time. Here are five stocks which billionaire David Einhorn’s Greenlight Capital owned both in its most recent 13F and in its filing for the first quarter of 2011, per our database (or see the full list of Einhorn’s picks over time):
The fund has long been a fan of Apple Inc. (NASDAQ:AAPL), with 2.4 million shares of the stock in its portfolio at the end of the first quarter of 2013. Apple Inc. (NASDAQ:AAPL) had been the most popular stock among hedge funds in Q1 (check out the full top ten list) winning what had previously been its place back from AIG. Currently Apple Inc. (NASDAQ:AAPL) is valued at 10 times earnings, whether we consider trailing results or analyst forecasts for the fiscal year ending in September 2014. Analysts are bullish enough that the stock’s five-year PEG ratio is well below 1.
Greenlight owned 4.9 million shares of Aspen Insurance Holdings Limited (NYSE:AHL), a $2.5 billion market cap insurance company specializing in reinsurance and property and casualty insurance. The stock is priced at a significant discount to book value, with a P/B ratio of 0.7. It also looks cheap from an earnings perspective, with multiples in the 10-11 range, and recent reports have shown that the business is turning in increases in both sales and net income. As a result we’d be interested in considering it as a potential value play.
Einhorn and his team had initiated a position in Seagate Technology PLC (NASDAQ:STX) in Q1 2011, and while they cut their stake in the first three months of this year they still disclosed ownership of 5.4 million shares. The hard disk drive and data storage company has been seeing steep declines in both revenue and earnings (which were down over 60% in its most recent quarter compared to the same period in the previous year). While business is tough, the earnings multiples are in the single digits and the EV/EBITDA multiple is only 4.6x.
As a result we’d be interested in checking out Seagate despite its recent troubles, and as we’ve mentioned Aspen appears to be a value candidate as well. With NCR, the company appears to be improving and given the combination of that and its low valuation in terms of future earnings numbers it would be worth considering as well. Apple Inc. (NASDAQ:AAPL) is certainly cheap- particularly if we account for its cash hoard- but it’s also certainly experiencing a decline in margins and earnings as a result. We like that it is returning cash to shareholders, and investors should certainly be following it, but we aren’t sure we’d recommend buying at this time.
Disclosure: I own no shares of any stocks mentioned in this article.
