Tuesday, May 31, 2011

David Einhorn's Greenlight Buys Playtech (LON: PTEC)

Greenlight Capital's David Einhorn has been on a buying spree as of late. While it's been widely reported that he's spending $200 million to buy a stake in the New York Mets, Einhorn has also been buying in another area of passion: poker.

Due to a disclosure filed with the London Stock Exchange, David Einhorn's Greenlight Capital disclosed an indirect new position in Playtech (LON: PTEC), owning 3.68% of outstanding shares. *Update: representatives of Einhorn's have let us know that this investment was made on the behalf of Greenlight. We had previously posed the question as to whether or not this was a personal investment because Einhorn was named on the filing, but Greenlight was not.

This investment has ties to Einhorn's passion of poker. In 2006, Einhorn finished 18th in the World Series of Poker and donated his winnings to charity. Per Google Finance, Playtech and its subsidiaries "develop unified software platforms for the online and land based gambling industry, targeting online and land based operators. Playtech's gaming applications include online casino, poker and other P2P games."

To see what else Einhorn has invested in, check out his hedge fund's updated portfolio here.

To learn to invest like this budding legend, head to David Einhorn's recommended reading list.

Kleinheinz Capital Starts Position in MWB Business Exchange

Hedge fund Kleinheinz Capital recently filed a disclosure with UK regulators. In it, they revealed a new position in MWB Business Exchange (LON: MBE). Due to trading on May 19th, Kleinheinz now owns 5.01% of MWB's outstanding shares.

In the past, we've also detailed how Kleinheinz thinks inflation is the biggest threat to emerging markets as well as some of their past portfolio commentary.

Per Google Finance, MWB Business Exchange is a "United Kingdom-based supplier of serviced offices. As at December 31, 2009, Business Exchange operated 73 centers providing over 14,000 workstations covering 1.2 million square feet of office space. The Company operates in two segments: four and five star serviced office accommodation under the Business Exchange brand, and three star serviced office accommodation under the City Executive Centres brand."

Strategist Jeff Saut on Efficient Markets

Market strategist Jeff Saut's latest commentary focuses on sideways markets and how you can still make money in them. He pulls a quote from Vitaliy Katsenelson, author of The Little Book of Sideways Markets (and e-book version here), who notes that, "one of the core reasons why markets are and will remain inefficient: because human beings are efficient."

In this regard, Vitaliy uses Cisco Systems (CSCO) as an example. The stock has fallen 80% from its highs and now investors who originally bought in 1999 have made no money. The company has guided below Wall Street expectations in recent quarters. Saut adds that, "to be sure, at downside and upside inflection points, stocks are anything but efficient."

Some hedge funds have dabbled in this name and you can see the value thesis rationale in a free sample of our newsletter. And as noted in the just-released new issue of Hedge Fund Wisdom, famed mutual fund manager Bruce Berkowitz started a position in CSCO last quarter.

While the stock market often churns sideways for years digesting large secular bull market moves, Saut points out that the trick to outperform during these periods is to "be more proactive (or tactical) in your investment approach, be sector and stock specific, and cut your losses quickly."

Embedded below is Saut's recent commentary:

You can download a .pdf copy here.

What We're Reading ~ 5/31/11

Must-read: The value of hedge fund stock picks [World Beta]

SAC Capital investors begin to eye the door [Fortune]

The top 5 U.S. cities seeking hedge fund talent [Absolute Return + Alpha]

FrontPoint founder tries again with new firm [Dealbook]

How to beat Wall Street [Business Insider]

EMC has been tearing it up [Reformed Broker]

Interview with the Ira Sohn contest winner [Santangel's Review]