Benzinga Exclusive: David Einhorn Comments On Apple TV, Gold, and Japan
Top value-oriented hedge fund manager David Einhorn is speaking today at the Columbia business school. This afternoon, Einhorn, whose comments frequently move the markets, spoke about the prospects for Apple TV, gold and Japan in addition to commenting on a number of other stocks in which he holds positions.
Einhorn remains positive on Apple and believes that the company can succeed even if its TV (about which rumors are swirling on the internet) does not. Einhorn said that it will be important for the TV to be revolutionary. He told the audience that he still likes Apple (NASDAQ: AAPL) without taking the potential of Apple TV into consideration. As of the end of the third quarter of 2011, Einhorn's hedge fund Greenlight Capital had a roughly $600 million position in AAPL, making it the fund's single biggest holding.
Einhorn also said that he is still long gold (his fund's second biggest position as of 9/30/2011 was the Market Vectors Gold Miner ETF (NYSE: GDX) and it has also been widely reported that Greenlight has a massive physical stash of the yellow metal stored in private vaults).
Speaking about Japan, the hedge fund manager said that out-of-the-money options in Japan (presumably on JGB's and the Yen) are mispriced and will be very profitable if the European debt crisis makes its way to that country. A number of prominent hedge fund managers are shorting Japanese Government Bonds and the Yen on the expectation that Japan, which has the world's highest debt/GDP ratio, will be swept up in the sovereign debt crisis.
Speaking about some specific stocks, Einhorn said that he looked at investing in Walgreens (NYSE: WAG), but does not currently have a position. He said that hobbling Research in Motion (NASDAQ: RIMM) has critical mass problems, but that the company's balance sheet is not that bad. He said while the stock wasn't a great investment at current levels, it wasn't a short either.
Speaking about Dell (NASDAQ: DELL), which he owns, Einhorn said that the company was smart to buy back its stock at $15.00, but has paid too much for some of its acquisitions. He added that DELL's business is trading at around 4x earnings when backing out the $7 per share in cash the company has on its balance sheet.
The Greenlight manager said that he is still short Green Mountain Coffee Roasters (NASDAQ: GMCR), which has fallen from a high of $116 in September to $62.87 on Friday. Einhorn stated that there were 20-30 ways for his short thesis to play out. He also mentioned another one of his high profile short positions - St. Joe (NYSE: JOE) - arguing that the company's land holdings are worth around $7 per share and that efforts to develop some of its real estate in Florida have not been successful.
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