Greenlight Capital’s 4Q14 positions
In an investor letter, activist investor David Einhorn’s Greenlight Capital disclosed its position updates for the fourth quarter that ended on December 31, 2014. In this series, we’ll go through some of the main positions discussed by the fund in its letter for the fourth quarter that was cited by various news websites.
The value of Greenlight Capital’s US long portfolio in the last reported 3Q14 13F was $6.9 billion. The top ten positions in the last reported 13F in November are highlighted below.
The fund stated in its letter that new positions were added in Time Warner (TWX), ISS A/S (ISSJY), and Keysight Technologies (KEYS). Positions exited were Cigna (CI), Osram Licht AG (OSAGY), and a short position in Cliffs Natural Resources (CLF). The position size and value was not disclosed for any of the positions in Greenlight’s investor letter.
The fund also mentioned that its large long positions at the end of 4Q14 were in Apple (AAPL), Consol Energy (CNX), gold, Marvell Technology Group Ltd. (MRVL), Micron Technology (MU), and SunEdison (SUNE).
Funds gained 5.6% in 4Q14
Greenlight noted in its letter that its funds gained 5.6% net of fees and expenses in 4Q14, bringing a full-year net return to 8.0%. The letter added that while the S&P 500 returned more than 13% for the year, most other developed markets performed much worse, especially on a dollar basis. The fund added that “the overall environment was reasonably favorable” and that its full-year results were “fair.”
Greenlight on declining crude oil prices
Greenlight also talked about the impact of lower oil prices, and added that it sold “enough” WTI oil futures in mid-June last year to offset the subsequent declines in its positions in Anadarko, BP, McDermott, and National Oilwell Varco. It noted that all of these positions were exited at their higher June prices. The positions were reviewed by the fund after the Sohn Investment Conference, where hedge fund manager Zach Schreiber forecast a “sharp fall in WTI oil prices.”
The fund noted that lower oil prices impacted its position in Civeo (CVEO), which the fund termed as a “significant loser” during 4Q14. Shares of Civeo fell due to plunging oil prices, which led to reduced expectations for 2015. Greenlight stated that it did not “hedge CVEO’s exposure to oil, because it was viewed as a real estate company and its sensitivity to commodity prices was underestimated.” An update on JANA Partners’s and Greenlight’s positions in Civeo was highlighted in a recent Market Realist series.
The next part of this series will highlight Greenlight’s new position in Time Warner.