Published On: Thu, Jan 22nd, 2015

David Einhorn’s Greenlight Got Out of Oil Futures Early, Jumped into Time Warner

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David Einhorn’s Greenlight Capital might seem to have disappointed compared to the S&P 500, with the fund returning 8% compared to the index’ 13% finish for 2014, but Greenlight fared better than many other hedge funds, which returned on average 3.78% last year as reported by Business Insider.

Einhorn announced a new position in Time Warner, which he bought on a dip after Rupert Murdoch failed to take it over. Einhorn seems to think the company could get another serious bid, and even if that doesn’t pan out, it is making impressive innovations with its HBO segment. In a letter to investors, Einhorn discussed the success of Time Warner’s Turner and CNN businesses, its Warner Brothers studio as well as HBO. Greenlight purchased the stock at an average price of $72.72. Management has said that HBO can function as a standalone streaming product; this is news that could bring the stock up, and it ended 2014 at $85.42.

Greenlight, along with other funds, took a bet on Irish pharma Shire being taken over by AbbVie, but the plans didn’t come to fruition. Shire reported strong earnings, and Einhorn was able to sell the position at a decent price.

One good move David Einhorn made in 2014 was to get out of oil futures before the dramatic decline in the commodity that began in the summer. After listening to a talk by Zach Schrieber of PointState Capital at the Sohn Investment Conference, in which Schriber called the potential decline, Greenlight sold enough WTI oil futures to withstand losses from its positions in Anadarko BP, McDermott and National Oilwell Varco, as reported by Bloomberg.

Another position Greenlight added was in Keysight at an average price of $30.54. The  electronic test and measurement company was spun off by Agilent in November. The best performing stocks in Greenlight’s portfolio last quarter were Apple, Consol Energy, Marvell Technology, Micron Technology and SunEdison

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