Market Overview

Buffett, Einhorn and Loeb Have Faith in Their Largest Holdings (KO, AAPL, YHOO)


Daniel Loeb is committed to Yahoo! (NASDAQ: YHOO). David Einhorn believes in Apple (NASDAQ: AAPL). And Warren Buffett stands by Coca-Cola (NYSE: KO). Each of these super investors has faith in his largest holding and is willing to put that faith into action as well as words.

Coca-Cola is the largest holding of Berkshire Hathaway (NYSE: BRK-B). Buffett's company owns some 200 million shares, worth $15.31 billion dollars. Berkshire Hathaway's stake in the company is 8.84%, and it makes up about 20% of Buffett's portfolio.

In April, Coca-Cola was considering a 2-for-1 stock split. Buffett has traditionally lashed out at companies he has shares in when they announce stock splits. He notes that stock splits are bad for the investor because the new shares dilute the current shareholders power, and the split may attract investors who are interested in the short term only. Coca-Cola's stock split has not occurred yet.

Buffett told CNBC, "I've had a relationship with Coke for over 70 years. … Today we own 200 million shares. We've never sold a share of Coca-Cola."

The largest holding of Einhorn's Greenlight Capital (NASDAQ: GRLE) is Apple. The company owns 1.46 million shares of Apple, which is worth more than $877 million. Apple is 15.85% of Einhorn's portfolio.

When asked at the Ira Sohn Investment Conference if Apple could maintain its growth trajectory, Einhorn stated, "AAPL shares are not priced for growth. Its current valuation is justified without it. " As to whether too many hedge funds own Apple, Einhorn notes, "The average hedge fund has less than 2% of its equity assets in AAPL versus AAPL's 4% weighting in the S&P 500, which means hedge funds are actually underweight AAPL."

Einhorn believes that Apple is a misunderstood stock and that the shares remain cheap. In his view, investors treat Apple as a hardware company rather than a software company.

Yahoo! is the top holding of Loeb's hedge fund, Third Point. His 70.5 million shares are worth more than $1 billion. Yahoo! makes up about 26.4% of Third Point's portfolio, and the company is reported to have a 5.77% stake in Yahoo!

Loeb campaigned to oust of Yahoo!'s prior chief executive, Scott Thompson, by accusing him of never receiving the computer science degree that he claimed he earned. On May 13, Thompson resigned, and Yahoo! gave Third Point three seats on the board.

Loeb was quoted in a statement from Yahoo!: “We are confident this Board will benefit from shareholder representation, and we are committed to working with new leadership to unlock Yahoo's significant potential and value."

In early trading Tuesday, Yahoo! was down about 1% and Coca-Cola was down less than that. Apple was up less than 1%.

Posted-In: Apple Berkshire Hathaway Coca-cola Daniel LoebLong Ideas Movers & Shakers Stock Split Trading Ideas


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