David Einhorn Trims Apple (AAPL) Stake, Buys Calpine (CPN), Rite Aid (RAD)

Founded in 1996 by David Einhorn with an initial capital of $900,000, Greenlight Capital has grown into one of the most famous hedge funds around, currently overseeing more than $8 billion worth of assets. After a tough 2015 that saw the fund’s positions generate a 20% loss driven mainly by the slump in the energy markets, at the end of the 2016 second quarter Greenlight Capital was up by 0.4%, after market swings wiped out most of the 3% gain it registered during the first quarter. As they look to get back to winning ways, Einhorn and his team have made some notable changes to the fund’s equity portfolio. Valued at $5.45 billion at the end of June, the fund’s equity bets were spread across a number of sectors, with an emphasis on consumer discretionary, technology and industrial sectors. Among the most prominent moves, was Greenlight’s U-turn with regard to Macy’s Inc (NYSE:M) and a 16% reduction of its top holding – Apple Inc. (NASDAQ:AAPL).

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Playing It Safely with Apple

David Einhorn has been a fan of Apple Inc. (NASDAQ:AAPL) for a long time, but the recent uncertainty regarding the company’s growth potential have prompted Greenlight Capital to cut its exposure to the stock. According to its latest 13F filing, the fund reduced its stake by 16% to 6.85 million shares worth approximately $655 million at the end of the second quarter. Apple Inc. (NASDAQ:AAPL) stock has registered some major swings so far this year, but Greenlight Capital managed to offset some of the losses incurred by the long positions by actively trading the stock, according to its recent investor letter. Investors are currently gearing up for the launch of the new iPhone 7, hoping the release will provide a boost to the stock. Recent versions of the iconic smartphone have been criticized to lack any substantial innovation, sparking concerns about Apple’s ability to gain an edge in this saturated and highly competitive market. Warren Buffett‘s Berkshire Hathaway, on the other hand, had its stake in Apple Inc. (NASDAQ:AAPL) increased by 55% to 15.2 million shares worth $1.45 billion.

Bullish On Mylan NV

During the second quarter, Einhorn and his team boosted their fund’s investment in Mylan NV (NASDAQ:MYL) by 71%, amassing 4.94 million shares valued at $214 million at the end of June. Greenlight Capital initiated the position during the 2015 fourth quarter as it saw “medium-term upside from a competitor recall, an announced share repurchase, and board review of corporate governance complaints.” Greenlight also said it expects Mylan NV (NASDAQ:MYL) to earn approximately $7 per share in 2018. For the 2016 second quarter, the company posted a profit of $168.4 million or $1.16 per share when adjusted for one-time gains and costs, marginally beating analysts’ projections of $1.15 per share. Revenue rose 8% to $2.56 billion, below estimates of $2.61 billion. Mylan NV (NASDAQ:MYL) has recently completed the acquisition of Swedish drugmaker Meda for $7.2 billion in order to gain presence into a number of emerging markets like Southeast Asia, Russia and the Middle East.

Turn the page to read about three other major moves reported in Greenlight’s recent 13F filing.

No Worries About Chemours

David Einhorn and his team are still bullish on Chemours Co (NYSE:CC). In its latest letter to investors, Greenlight Capital stated its belief that the company is well positioned to benefit from recovering TiO2 (titanium dioxide used in the food and cosmetic industries) prices. Mr Einhorn has found himself at sorts with activist short-seller Andrew Left, who believes the company is on its way to bankruptcy because of legal issues. Greenlight and Einhorn insist that Chemours Co (NYSE:CC)’s former parent company is the primary defendant in all the litigations and the outcome should not affect Chemours. A provider of performance chemicals, the company has a market cap of $2.26 billion and pays an annual dividend of $0.12 per share, providing shareholders with a 1.05% yield. For the second quarter, Chemours Co (NYSE:CC) posted adjusted earnings of $0.27 per share and $1.38 billion in revenue, down 8.3% year over year. Having managed to top analysts’ estimates of $0.17 in earnings per share, the stock was upgraded at Argus to ‘Buy’ from ‘Hold’ with a price target of $13 per share.

Betting On Energy Turnaround

Calpine Corporation (NYSE:CPN) is the largest new addition to Greenlight Capital’s portfolio, as the fund acquired 5.66 million shares by the end of the quarter, a position worth $83.5 million. So far this year, the stock has been trading in a range, oscillating between the $12 and $16 levels. Calpine Corporation (NYSE:CPN) swung to a loss in the most recent quarter, as the company adjusts to the changes in the energy sector. Calpine Corporation (NYSE:CPN)  posted a loss of $29 million or $0.08 per share, but, when adjusted for non-recurring costs, earnings stood at $0.06 per share. Revenue fell 19% to $1.16 billion, below analysts’ estimates of $1.29 billion. “Baseload resources continue to be threatened by a combination of lower gas prices, increasingly stringent environmental regulations and further penetration of renewables,” commented Thad Hill, CEO of Calpine.

Merger Play

Greenlight Capital’s management team also sees Rite Aid Corporation (NYSE:RAD) as a good investment opportunity, having initiated stake during the quarter. According to its latest 13F filing, the fund held 10.3 million shares worth $77.4 million at the end of June. So far this year, Rite Aid Corporation (NYSE:RAD) has been a disappointment, as it wobbled around without a clear direction until mid-May, when it took a nosedive, dropping by as much as 13% before regaining some of the lost ground. The company is currently the subject of a $17 billion takeover bid from Walgreens Boots Alliance Inc (NASDAQ:WBA). The merger has been put on hold, however, as the companies await the approval from the Federal Trade Commission. Billionaire John Paulson is also bullish on Rite Aid Corporation (NYSE:RAD), having boosted his fund’s holding by 120% to 580,900 shares worth $435 million.

Disclosure: none.