Greenlight Capital Investor Letter: Q2 Performance and Highlights

Greenlight Discards Macy’s Inc. (NYSE:M) Stake

– Shares owned by Greenlight Capital as of March 31: 7.06 Million

– Value of Greenlight Capital’s holding as of March 31: $311.12 Million

The hedge fund vehicle run by billionaire David Einhorn increased its exposure to Macy’s Inc. (NYSE:M) by 4% during the January-to-March quarter to 7.06 million shares. However, the hedge fund sold out its entire stake in the omnichannel retail organization during the second quarter “for a loss after the company announced a significant reduction in full-year 2016 guidance”. “This announcement invalidated our thesis that 2016 earnings would benefit from easy comparisons later in the year”, said the recent letter to investors from Greenlight Capital. Macy’s, which owns and operates roughly 870 Macy’s, Macy’s Backstage, Bloomingdale’s, Bloomingdales Outlet and Bluemercury stores, reported net sales of $5.77 billion for the first quarter, down 7.4% year-over-year due to store closures and a decline in comparable sales. The decrease in comparable sales was 6.1%, more than the 5.6% decline recorded for the first quarter of 2015. Macy’s shares are 5% in the green year-to-date. Ray Carroll’s Breton Hill Capital owns nearly 26,000 shares of Macy’s Inc. (NYSE:M) as of June 30.

Apple Inc. (NASDAQ:AAPL) Losses Mitigated by Trading Activities

– Shares owned by Greenlight Capital as of March 31: 8.21 Million

– Value of Greenlight Capital’s holding as of March 31: $895.14 Million

Apple Inc. (NASDAQ:AAPL) was Greenlight Capital’s largest holding at the end of the March quarter, making up 15.2% of the hedge fund’s portfolio. The asset manager upped its Apple position by 30% during the first quarter to 8.21 million shares, which were valued at $895.14 million at the end of the quarter. Greenlight Capital mitigated the loss incurred from the long position in Apple “by trading AAPL well”. “…though the stock is down about 9% for the year, we have been nearly break-even on the position in 2016”, said the well-known investment firm in the letter to investors. Apple shares jumped above the $100 price level again after the iPhone maker released better-than-expected results for its fiscal 2016 third quarter that ended June 25. Apple’s revenue dropped 15% year-over-year to $42.4 billion, beating analysts’ estimates of $42.1 billion. The company sold 40.4 million iPhones during the quarter, above the 40.2 million units-figure anticipated by analysts. Ken Fisher’s Fisher Asset Management has 11.31 million shares of Apple Inc. (NASDAQ:AAPL) among its holdings as of the end of the second quarter.

Disclosure: None