David Einhorn's Hedge Fund Greenlight Capital Buys Ensco (ESV) ~ market folly

Tuesday, July 13, 2010

David Einhorn's Hedge Fund Greenlight Capital Buys Ensco (ESV)

David Einhorn's hedge fund Greenlight Capital just filed a 13G with the SEC regarding shares of Ensco (ESV). The filing discloses activity on June 30th, 2010 and reveals a 5.2% ownership stake in ESV with 7,416,880 shares. This is a brand new position for Einhorn's firm as we previously did not see it in Greenlight's portfolio last quarter. However, this is not the first time the hedge fund has owned Ensco. They last owned shares of ESV back in the fourth quarter of 2008. To hear Einhorn's latest investment ideas, keep in mind he's presenting at the upcoming Value Investing Congress in October (discount here).

Before the Gulf oil spill, ESV was trading around a 52-week high at above $50 per share. Since the spill, shares hit a low of $33 and are now trading around $40. While Ensco is not directly involved in anything regarding the Gulf of Mexico tragedy, its shares have been sold off as worries have mounted regarding the drilling moratorium. Many hedge funds and investment managers have argued that ESV has unjustly been sold off and Einhorn has certainly joined in the mix as his filing speaks for itself. In the past, we've noticed that John Burbank's Passport Capital and Johnathan Auerbach's Hound Partners both held positions in ESV as of the first quarter of this year. What they've done with those stakes, though, remains to be seen.

For more investment ideas from David Einhorn and other top hedge fund managers, be sure to check their presentations out at the Value Investing Congress in October in New York City. Market Folly readers can receive a discount to the event here. In terms of other recent coverage of Greenlight Capital, head to our coverage of Einhorn's Ira Sohn presentation as well.

Taken from Google Finance, Ensco is "an offshore contract drilling company. As of February 15, 2010, Ensco’s offshore rig fleet included 42 jackup rigs, four ultra-deepwater semisubmersible rigs and one barge rig. Additionally, it had four ultra-deepwater semisubmersible rigs under construction. Ensco’s operations are concentrated in the regions of Asia Pacific, which includes Asia, the Middle East and Australia, Europe and Africa, and North and South America".

And for further elaboration on the potential thesis behind this Ensco investment, check out Manual of Ideas' in-depth analysis of ESV.

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