Greenlight Capital's Q4 Letter: Dramatically Increased General Motors Position

David Einhorn's hedge fund Greenlight Capital finished 2016 up 8.4% and has returned 16.1% annualized since inception in 1996.

Their fourth quarter letter examines how their portfolio is positioned now that Donald Trump is president and will be trying to change policies. 

Greenlight is long various US value stocks that could benefit from corporate tax cuts (AMERCO, CC, Dillard's, DSW), they're long companies that can benefit from repatriation of foreign cash (Apple (AAPL)), and they're long companies that can benefit from demand for consumer durables (General Motors (GM), a position in which they've "dramatically increased their position."

They're also short 'bubble basket' stocks (Netflix), oil frackers, and Caterpillar (CAT).

Turning back to their thesis on GM, Greenlight writes that, "While the bears have been screaming 'peak auto' for the last couple of years, we think a strengthening job market will sustain the current upcycle and lead to better than expected credit performance at GM's finance subsidiary.  While the bears also cite long-term concerns over self-driving cars, we see a huge intermediate-term opportunity in assisted-driving cars."

During the quarter, David Einhorn's firm also exited its positions in AECOM (ACM), Michael Kors (KORS), and Take-Two Interactive Software (TTWO).   They also covered short positions in FLSmidth (Denmark: FLS), Mead Johnson Nutrition (MJN), and Reynolds American (RAI).

At the end of 2016, their largest positions in alphabetical order were: AerCap, Apple, CONSOL Energy, General Motors, and gold.  Their average exposures were 106% long and 81% short.

Embedded below is Greenlight Capital's Q4 letter:



We've posted up a bunch of letters today, so be sure to also check out Third Point's Q4 letter as well as Howard Marks' latest memo.

What We're Reading ~ Analytical Links 11/6/13

Individual investor bullishness hits 6 year high [PragCap]

What to do in this market [Brooklyn Investor]

On a consistent and repeatable investment process [Research Puzzle]

Portfolios With Purpose: Stock picking for a cause [WSJ]

The 20 smartest things Jeff Bezos has ever said [Fool]

The bull case on Valeant Pharmaceuticals [Barrons]

Quick glance at Du Pont [Modern Graham]

A look at QEP Resources and Rick's Cabaret [HF Intelligence]

Springleaf Holdings and the re-emergence of subprime consumer lending [CFA]

Take-Two: A compelling value with 2 asymmetric options [First Adopter]

Disney and Dish wrangle not over broadcast fees, but the future of TV [NYTimes]

Can companies maintain their extraordinarily high margins? [WSJ]

Whitney Tilson's observations from his trip to China [Seeking Alpha]

On China's pollution problem [NYTimes]

Ajit Jain feeds Buffett's hunger [Insider Quarterly]

Why Twitter's IPO is a bigger deal than Facebook's [WSJ]

For new MBA's, tech more appealing than Wall Street [WSJ]

Carl Icahn Continues Acquiring Take Two Interactive (TTWO) Shares

Yet again, Carl Icahn has bought more shares of Take Two Interactive (TTWO). In a Form 4 filed with the SEC, we see that Icahn's various investment vehicles purchased 168,700 shares of TTWO at $9.98 per share. The transaction took place on April 1st, 2010 and he now collectively owns 11,789,226 shares through his mix of investment funds and partnerships. This comes after we recently covered how Icahn has been adding TTWO shares repeatedly as he looks to shake-up things at the company to increase shareholder value.

The legendary rabblerouser and corporate activist has been quite active in the investment arena lately as he recently dumped his Blockbuster (BBI) shares and has been seeking to acquire Lions Gate Entertainment (LGF). You can read some of his investment theses and insight in Icahn's investor letter if you're interested in learning more. In the mean time, we'll continue to watch if he can institute change at TTWO and will monitor the SEC filings for the next time he purchases shares. Because if his rate of buying is any indication, it doesn't look like he's done yet.

Taken from Google Finance, Take Two Interactive is "a global publisher, developer and distributor of interactive entertainment software, hardware and accessories. The Company’s publishing business consists of Rockstar Games, 2K Games, 2K Sports and 2K Play publishing labels. The Company develops, markets and publishes software titles for gaming and entertainment hardware platforms."

For more from hedge fund Icahn Partners, check out Carl Icahn's portfolio.

Carl Icahn Buys Take Two Interactive (TTWO) Yet Again

Today seems to be repeat transaction day here at Market Folly. First, we saw Warren Buffett's Berkshire Hathaway selling Moody's (MCO) shares for the second time this week. And now we see that Carl Icahn, through his various investment vehicles, has again purchased shares of Take Two Interactive (TTWO) for the second time this week. We just covered his previous transaction and now see that Icahn purchased more shares on March 22nd. Icahn added 36,653 more shares at a price of $9.96. This brings his total ownership to 11,620,526 shares in the video game maker as he seeks to institute change to generate shareholder value.

Taken from Google Finance, Take Two Interactive is "a global publisher, developer and distributor of interactive entertainment software, hardware and accessories. The Company’s publishing business consists of Rockstar Games, 2K Games, 2K Sports and 2K Play publishing labels. The Company develops, markets and publishes software titles for gaming and entertainment hardware platforms."

For more from everyone's favorite corporate raider, head to Icahn's investor letter as well as the rest of his portfolio.

Phil Falcone's Harbinger Capital Bets Big on Sprint Nextel (S): 13F Filing

(This post is part of our series on tracking hedge fund portfolios. If you're unfamiliar with tracking investments they disclose via SEC filings, check out our series preface on hedge fund 13F filings.)

Next up is Philip Falcone's hedge fund Harbinger Capital Partners. Falcone runs his $6 billion hedge fund with a focus both on distressed and equity plays and often takes concentrated positions in companies. And, that last reason is exactly why we track them. Even though we can't see their distressed plays (they aren't required to disclose them), we can track their equity plays that they have high conviction in. You aren't going to devote large portions of your portfolio to one company unless you truly believe in your thesis. After having a dismal 2008, Harbinger had a solid showing last year as they finished up 46.5% as we noted in our 2009 hedge fund performance numbers post.

The positions listed below were Harbinger's long equity, note, and options holdings as of December 31st, 2009 as filed with the SEC. All holdings are common stock unless otherwise denoted.


Brand New Positions
Sprint (S)
Exco Resources (XCO)
Take Two Interactive (TTWO)
SPDR Gold Trust (GLD)
Corn Products (CPO)
US Airways (LCC)
Superior Well Services (SWSI)
Cloud Peak Energy (CLD)
Alpha Natural Resources (ANR)
iStar Financial (SFI)
Delta Petroleum Bond
The rest of the new stakes were each less than 0.25% of reported holdings: ICO Global (ICOG), MGIC Investment (MTG), & Strategic Hotels (BEE)


Increased Positions
Harry Winston Diamond (HWD): Increased by 587%
Walter Energy (WLT): Increased by 128.5%
Complete Production (CPX): Increased by 44.5%
Mercer International (MERC): Increased by 11.7% (we detailed their convertible bond exposure)


Reduced Positions
Interpublic Group (IPG): Reduced by 46.5%
Freeport McMoran (FCX): Reduced by 38.2%
Calpine (CPN): Reduced by 28.1%
Media Gen (MEG): Reduced by 18.1%


Removed Positions (Sold out completely):
McDermott (MDR)
Solutia (SOA) ~ we saw this coming with their previous repetitive sales
Zapata (ZAP)
Gentek (GETI)
USEC Bond International Coal (ICO)


Top 15 Holdings by percentage of assets reported on 13F filing

1. Calpine (CPN): 18.47%
   
2. Sprint Nextel (S): 15.35%
   
3. New York Times (NYT): 12.71%
   
4. Walter Energy (WLT): 10.42%
   
5. Complete Production Services (CPX): 5.31%
   
6. Interpublic Group (IPG): 4.81%
   
7. Exco Resources (XCO): 4.75%
   
8. Freeport McMoran (FCX): 3.82%
   
9. Take Two Interactive (TTWO): 3.26%
   
10. SPDR Gold Trust (GLD): 3%
    
11. Corn Products (CPO): 2.35%
    
12. US Airways (LCC): 2.17%
    
13. Terrestar (TSTR): 1.66%
    
14. Harry Winston Diamond (HWD): 1.57%
    
15. Superior Well Services (SWSI): 1.37%
    

Harbinger runs quite a concentrated equity portfolio and remember that a lot of their holdings are also in distressed assets, Falcone's specialty. They turned over their portfolio quite significantly in the fourth quarter as a large portion of their top holdings are brand new positions. Most notable will be their stake in Sprint (S) which takes up over 15% of their reported assets. But also take not of their Exco Resources stake (XCO). We did, on the other hand, already know about their new Superior Wells position. This just goes to show that you have to track all SEC filings, not just the 13F's, as hedge funds will often give you glimpses into their portfolio on a much more real-time basis.

Most people will take notice of Harbinger's new stake in the gold ETF: GLD. So many hedge funds have some exposure to gold these days it's not even funny. We found two of Harbinger's new stakes intriguing. Firstly, Falcone has joined Carl Icahn in buying TTWO shares. Additionally, like David Tepper's Appaloosa Management, Falcone bought shares of airline LCC.

We saw some notable sales as Harbinger sold completely out of Solutia, something we saw coming as we detailed their seemingly constant sales of SOA. We had also seen Falcone's previous sales in CPN as well, so that wasn't surprising to see. It was interesting to see the hedge fund shed a good portion of their FCX position as they hadn't held it very long. Overall, Harbinger increased exposure to basic materials and sharply decreased exposure to Utilities.

All data used for this article comes from Alphaclone, our source for backtesting strategies and sorting through all the hedge fund portfolio maneuvers with ease. Assets reported on the 13F filing were $1.78 billion this quarter compared to $1.48 billion last quarter, a 20% increase. Remember that these filings are not representative of the hedge fund's entire base of AUM.

We'll be tracking 40+ prominent funds in our fourth quarter 2009 hedge fund portfolio tracking series. We've already covered Seth Klarman's Baupost Group, Mohnish Pabrai's Investment Fund, Carl Icahn's hedge fund Icahn Partners, David Einhorn's Greenlight Capital, Stephen Mandel's Lone Pine Capital, John Griffin's Blue Ridge Capital, David Tepper's Appaloosa Management, Warren Buffett's portfolio, John Paulson's hedge fund Paulson & Co, Lee Ainslie's Maverick Capital, Dan Loeb's Third Point, Eddie Lampert's RBS Partners, David Ott's Viking Global, Chris Shumway's hedge fund Shumway Capital Partners, and Chase Coleman's Tiger Global. Check back daily for our new updates.

Carl Icahn Sells Tons Of Yahoo Shares: 13F Filing Analysis

(This post is part of our series on tracking hedge fund portfolios. If you're unfamiliar with tracking investments they disclose via SEC filings, check out our series preface on hedge fund 13F filings.)

Next up is Carl Icahn and his hedge fund Icahn Partners. Icahn has been labeled a corporate raider and a rabblerouser for instituting change at various companies through his activist investing style. We've covered his movements on the site in the past and back in October he laid out the idea to short real estate. In the past, we've also detailed his additional insight from his guest lecture at Yale. Keep in mind that since the date of this 13F filing, Icahn has added to his Take Two Interactive (TTWO) stake numerous times.

The positions listed below were their long equity, note, and options holdings as of December 31st, 2009 as filed with the SEC. Note that we are only covering the major portfolio maneuvers. All holdings are common stock unless otherwise denoted.


Brand New Positions
CIT Group (CIT)
Lions Gate (Note 3.625%)


Increased Positions
Take Two Interactive (TTWO): Increased by 233.8% ~ And remember he has since added even more to his position
Genzyme (GENZ): Increased by 230.7%
Forest Labs (FRX): Increased by 21.3%


Reduced Positions
Yahoo (YHOO): Reduced by 76.1%


Removed Positions (Sold out completely):
n/a


Top 15 Holdings by percentage of assets reported on 13F filing

1. Motorola (MOT): 32.34%
2. Biogen Idec (BIIB): 23.93%
3. CIT Group (CIT): 9.32%
4. Genzyme (GENZ): 8.18%
5. Yahoo (YHOO): 6.99%
6. Amylin (AMLN): 6.40%
7. Lionsgate (LGF): 3.35%
8. Take Two Interactive (TTWO): 2.34%
9. Regeneron Pharmaceuticals (REGN): 2.11%
10. Cyberonics (CYBX): 1.49%
11. Forest Laboratories (FRX): 1.35%
12. Enzon Pharmaceuticals (ENZN): 1.03%
13. Exelixis (EXEL): 0.60%
14. Blockbuster (BBI): 0.24%
15. Wendys Arbys Group (WEN): 0.10%
    

While Icahn did not sell completely out of his Yahoo (YHOO) stake, he certainly sold off a huge chunk. It seems he was fighting somewhat of a losing battle here as he has dumped over 76% of his shares. The other big story in Icahn's portfolio is the addition of CIT Group (CIT), as it's now his third largest position. We see Seth Klarman's Baupost Group add CIT to their portfolio as well.

As you can see, he obviously runs a highly concentrated portfolio given his activist investing nature. Don't overlook the fact that Icahn also added heavily to his Genzyme (GENZ) stake and remember he is still adding to his TTWO position. The vast majority of Icahn's holdings remained unchanged on a quarter over quarter basis though.

Lastly, Icahn must be happy with the developments out of Motorola recently as they announced they will split the company into two business segments. After all, it is by far his largest holding on the 13F. Keep in mind also that Icahn has been involved in numerous distressed transactions involving casinos that obviously won't show up on these public SEC filings. That wraps up all the portfolio changes on Icahn's 13F filing.

Assets from the collective holdings reported to the SEC via 13F filing were $2.87 billion this quarter compared to $3.13 billion last quarter, so a slight down tick. Remember that these filings are not representative of the hedge fund's entire base of assets under management. Therefore, the figures above represent the percentage of their reported 13F assets, not their entire portfolio.

We'll be tracking 40+ prominent funds in our fourth quarter 2009 hedge fund portfolio tracking series. We've already covered Seth Klarman's Baupost Group and Mohnish Pabrai's Investment Funds so check back daily for our updates.

Carl Icahn Adds Take Two Interactive (TTWO) Shares Again

We just recently alerted you to the fact that 'corporate raider' Carl Icahn had bought more Take Two Interactive (TTWO). Well, he has added to his position again. Icahn purchased 300,000 additional shares at a price of $9.18 on February 5th. Then on February 8th, he purchased 800 more shares at $9.21. After all is said and done, Icahn now owns 10,873,033 shares through his various investment vehicles. We've detailed all his past activity, including how Icahn exercised calls on TTWO a few weeks ago and ramped up his initial stake. He is certainly positioning himself to institute change at the company in order to generate returns for shareholders and we'll see how it turns out.

Taken from Google Finance, Take Two Interactive is "a global publisher, developer and distributor of interactive entertainment software, hardware and accessories. The Company operates in two segments: publishing and distribution."

Carl Icahn Buys More Take Two Interactive (TTWO)

In an SEC Form 4 filed on shares of Take Two Interactive (TTWO), we see that rabblerouser Carl Icahn has boosted his stake. On February 2nd, Icahn through his various investment vehicles added 78,681 shares at a price of $9.21 per share. Then, on February 4th, Icahn added 280,000 more shares at a price of $9.24. After all his purchases, Icahn now owns 10,572,233 shares of Take Two Interactive. This activity comes after Icahn exercised calls on TTWO a few weeks ago and ramped up his initial stake.

Additionally, in late January Icahn's three board nominees were added to Take Two's slate of nominees for the 2010 annual shareholder meeting. Although portfolio disclosures are about to be updated, we see that some other prominent hedge funds hold large stakes in TTWO in addition to Icahn. Mario Gabelli's GAMCO Asset Management owns 2,516,000 shares and Larry Robbins' Glenview Capital Management owns 3,370,723 shares. Last week we presented Robbins' thoughts on global equities from a hedge fund panel.

Carl Icahn runs hedge fund Icahn Partners and focuses on activist investing where he seeks to implement change at various companies. We've covered his movements on the site in the past and back in October he laid out the idea to short real estate. In the past, we've also detailed some of his portfolio activity and his additional insight from his guest lecture at Yale.

Taken from Google Finance, Take Two Interactive is "a global publisher, developer and distributor of interactive entertainment software, hardware and accessories. The Company operates in two segments: publishing and distribution."

Carl Icahn Exercises Calls On Take Two Interactive (TTWO)

Due to a transaction on January 21st, activist investor and renowned rabblerouser Carl Icahn has filed a Form 4 with the SEC disclosing that he has acquired 783,479 shares of Take Two Interactive Software (TTWO) at a price of $5.25 per share via his investment vehicles (hedge funds, etc). We need to be clear that Icahn did not purchase additional shares. He simply exercised the calls that he already owned. We mentioned these call options when we posted about Icahn ramping up his TTWO stake back in December. Icahn still owns 9,158,479 shares of TTWO (the same aggregate exposure he reported back in mid-December). Taken directly from the SEC filing,

"On January 21, 2010, (Icahn) exercised American-style call options referencing an aggregate of 783,479 underlying shares. As a result of exercising the Call Options, (Icahn) acquired 783,479 shares, which are included in the 9,158,479 shares reported in this Form 4."

So, Icahn exercised options on TTWO that originally had an expiration date of December 16th, 2011. Keep in mind that Icahn also previously filed a 13D with the SEC, a form that signifies his activist intentions with his stake (a trademark of Icahn's rabblerousing ways). He feels shares are undervalued and might seek to talk with management. Many analysts believe that Icahn's entrance into such a name means that TTWO will most likely become an acquisition target again as it had previously been subject to advances from fellow gaming firms like Electronic Arts (ERTS).

Carl Icahn runs hedge fund Icahn Partners and focuses on activist investing where he seeks to implement change at various companies. We've covered his movements in-depth here on the blog and back in October he laid out the idea to short real estate. In the past, we've also detailed some of his portfolio activity. For more investing insight from Carl Icahn, check out his guest lecture at Yale.

Taken from Google Finance, Take Two Interactive is "a global publisher, developer and distributor of interactive entertainment software, hardware and accessories. The Company operates in two segments: publishing and distribution. The publishing segment consists of Rockstar Games, 2K Games, 2K Sports and 2K Play publishing labels. The Company develops, markets and publishes software titles for gaming and entertainment hardware platforms, including Sony’s PLAYSTATION3 (PS3) and PlayStation2 (PS2) computer entertainment systems; Sony’s PSP (PlayStationPortable) (PSP) system; Microsoft’s Xbox 360 (Xbox 360) video game and entertainment system; Nintendo’s Wii (Wii) and DS (DS) systems, and for the personal computers (PC) and Games for Windows. The Company’s distribution segment, which includes its Jack of All Games subsidiary, distributes its products, as well as software, hardware and accessories produced by others to retail outlets in North America."

Carl Icahn Ramps Up Take-Two Interactive Stake (TTWO)

Well known investor and 'corporate raider' Carl Icahn has filed a 13D with the SEC for his hedge fund Icahn Partners. In it, Icahn discloses a 11.28% ownership stake in Take-Two Interactive Software (TTWO). The filing was made due to activity on December 17th, 2009 and they now own 9,158,479 shares (including underlying call options).

Direct from the SEC filing, here is a breakdown of the prices at which Icahn bought shares and calls on TTWO through his various investment funds:

(click to enlarge)

(click to enlarge)

The majority of their purchase was common stock, however they also purchased 783,479 shares through call options that expire December 16th, 2011 and they have sold European-style put options for the same amount of shares with the same expiry. This is not a new position for Icahn because as of September 30th (per his latest 13F filing), he owned 2,007,445 shares. This means that in the last three months, Icahn has purchased an additional 7,151,034 shares, a 356% increase over their previous stake.

Icahn has filed a 13D which signifies his activist intentions with his stake. And, given Icahn's rabblerousing ways, we'd expect nothing less. His filing claims that he feels shares are undervalued and that he might seek to talk with management. Many analysts believe that Icahn's entrance into such a name means that TTWO will most likely become an acquisition target again as it had previously been subject to advances from fellow gaming firms like Electronic Arts (ERTS).

Carl Icahn runs hedge fund Icahn Partners and focuses on activist investing where he seeks to implement change at various companies. We've covered his movements in-depth here on the blog and in October he laid out the idea to short real estate. In addition, we've also detailed some of his portfolio activity. For investing insight from Carl Icahn, check out his guest lecture at Yale.

Taken from Google Finance, Take Two Interactive is "a global publisher, developer and distributor of interactive entertainment software, hardware and accessories. The Company operates in two segments: publishing and distribution. The publishing segment consists of Rockstar Games, 2K Games, 2K Sports and 2K Play publishing labels. The Company develops, markets and publishes software titles for gaming and entertainment hardware platforms, including Sony’s PLAYSTATION3 (PS3) and PlayStation2 (PS2) computer entertainment systems; Sony’s PSP (PlayStationPortable) (PSP) system; Microsoft’s Xbox 360 (Xbox 360) video game and entertainment system; Nintendo’s Wii (Wii) and DS (DS) systems, and for the personal computers (PC) and Games for Windows. The Company’s distribution segment, which includes its Jack of All Games subsidiary, distributes its products, as well as software, hardware and accessories produced by others to retail outlets in North America."