David Einhorn’s Greenlight Capital has filed its 13F with the SEC for the reporting period of March 31. Einhorn is known for his long/short equity investments and is rated as one of the best hedge fund managers in the world today. According to Forbes, Einhorn has a current net worth of $1.92 billion and he ranks at number 18 in Forbes’ list of the richest hedge fund managers. Greenlight Capital has an investment portfolio valued at $7.65 billion with its top ten stock holdings accounting for 62.95% of its concentrated portfolio. Einhorn invests nearly half of his money in the technology sector, with the consumer discretionary and industrial sectors getting big chunks of the remaining pie. Apple Inc. (NASDAQ:AAPL), Micron Technology, Inc. (NASDAQ:MU) and Sunedison Inc (NYSE:SUNE) are among the largest stock picks of Einhorn, but we’ll spend this article looking at Einhorn’s newly initiated positions, of which there were seven during the first quarter. General Motors Company (NYSE:GM), Macy’s, Inc. (NYSE:M), and Sunedison Semiconductor Ltd (NASDAQ:SEMI) are the top three of those new stock picks of the billionaire investment manager.
Professional investors like Einhorn spend considerable time and money conducting due diligence on each company they invest in, which makes them the perfect investors to emulate. However, while Einhorn’s returns have been strong throughout his tenure at Greenlight, we also know that the returns of hedge funds on the whole have not been good for several years, underperforming the market. We analyzed the historical stock picks of these investors and our research revealed that the small-cap picks of these funds performed far better than their large-cap picks, which is where most of their money is invested and why their performances as a whole have been poor. A portfolio of the 15 most popular small-cap stocks among funds outperformed the S&P 500 Total Return Index by an average of 95 basis points per month between 1999 and 2012 in backtesting. The exceptional results of this strategy got even better in forward testing after the strategy went live at the end of August 2012. A portfolio consisting of the 15 most popular small-cap stock picks among the funds we track has returned more than 139% and beaten the market by more than 80 percentage points since then, and by 4.6 percentage points in the first quarter of this year (see the details).
General Motors Company (NYSE:GM) is the top new stock pick of Einhorn, with his current position in the automobile company amounting to 9.47 million shares with a market value of $355.04 million. With stiff competition from other brands such as Ford Motor Company (NYSE:F) in the muscle car segment, General Motors recently unveiled the 2016 model of the Chevrolet Camaro. Camaro will help the company compete against other leading muscle car manufacturers and its primary competition includes the Ford Mustang and Chrysler Hemi Hellcat Challenger. Earlier last week, General Motors Company (NYSE:GM)’s China division announced a price cut to all primary brands of the company including Cadillac, Buick, and Chevrolet. The Chinese automobile industry is facing a slowdown and the majority of car brands are cutting prices to kickstart sales. Warren Buffett‘s Berkshire Hathaway, Appaloosa Management, and Taconic Capital hold major positions in the American automaker.
Greenlight Capital introduced Macy’s, Inc. (NYSE:M) to its equity portfolio during the first quarter. The fund manager now owns 1.68 million shares of the retailer, with a market value of $109.05 million. The shares of the retail store chain have improved 4.5% year-to-date and it has a current market cap of $23.36 billion. The retailer reported weaker-than-expected first quarter results and missed Wall Street’s expectations in both its revenue and earnings. Macy’s, Inc. (NYSE:M) reported quarterly revenue of $6.23 billion and net income of $193 million, with both also falling short of the company’s year-over-year revenue of $6.28 billion and income of $224 million. Wall Street was expecting a net income of $212.05 million on quarterly revenue of $6.32 billion, as reported by Thomson Reuters. Some of the primary investors of Macy’s, Inc. (NYSE:M) include Impala Asset Management, Stelliam Investment Management, and Parag Vora‘s HG Vora Capital Management.
Sunedison Semiconductor Ltd (NASDAQ:SEMI) is the third-largest stock addition in the portfolio of the investment manager. The current position of Greenlight Capital in Sunedison Semiconductor Ltd (NASDAQ:SEMI) amounts to 2.7 million shares of the solar energy company, with a market value of $69.71 million. The Singapore-based manufacturer of silicon wafers has a market cap of $972.09 million with P/S ratio of 1.16. The semiconductor company had a rough first quarter with its net sales declining 3.3% year-over-year to $199.4 million. On the other hand, its gross profit was up by 107.2% year-over-year. Baupost Group and SRS Investment Management are among the largest shareholders of Sunedison Semiconductor Ltd (NASDAQ:SEMI).
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