David Einhorn Adds to CareFusion (CFN) Stake ~ market folly

Monday, September 27, 2010

David Einhorn Adds to CareFusion (CFN) Stake

David Einhorn's hedge fund Greenlight Capital just filed a 13G with the SEC regarding shares of CareFusion (CFN). Due to portfolio activity on September 15th, Greenlight has disclosed a 6% ownership stake in CFN with 13,374,724 shares. This means that Einhorn's hedge fund firm has boosted its position size by 53.4% . Greenlight held 8,718,724 shares back on June 30th and you can hear David Einhorn's latest investment ideas at the upcoming Value Investing Congress (sign-up fast because there are only 23 seats left: receive a discount here).

You'll recall that in September of last year CareFusion (CFN) was spun off from Cardinal Health (CAH) through a pro rata distribution of approximately 81% of the shares. In recent company developments, we see that Cardinal Health sold its remaining 13.7% CareFusion stake to Morgan Stanley in a block trade as of September 16th, 2010.

Given the timing of this sale and Greenlight's purchase, you wonder if Greenlight acquired some of the shares that Cardinal sold off. As detailed in our coverage of Greenlight Capital's portfolio, Einhorn owns both CAH and CFN. In terms of other recent investment activity, Greenlight provided a bridge loan to BioFuel Energy and reduced its position in F&C Asset Management.

Taken from Google Finance, CareFusion is "a global medical technology company. The Company offers product lines in the areas of IV infusion, medication and supply dispensing, respiratory care, infection prevention and surgical instruments. CareFusion’s primary product brands include Alaris IV infusion systems that feature its Guardrails software; Pyxis automated medication dispensing systems that provide medication management and Pyxis automated medical supply dispensing systems; AVEA and Pulmonetic Systems ventilation and respiratory products, and Jaeger and SensorMedics pulmonary products; ChloraPrep skin antiseptic products that help prevent vascular and surgical-site infections and MedMined software and surveillance services that help target and reduce healthcare-associated infections (HAIs), and V. Mueller surgical instruments and related products and services. It operates in two segments: Critical Care Technologies and Medical Technologies and Services."

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