Einhorn stock picks at conference fail to wow
05/16 07:25 PM
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By Svea Herbst-Bayliss and Katya Wachtel
NEW YORK, May 16 (Reuters) - Investor David Einhorn built his reputation as a hedge fund industry superstar through targeted presentations that took on companies like Lehman Brothers, MBIA (MBI:$9.07,00$-0.39,00-4.12%) and Green Mountain Coffee Roasters (GMCR:$24.895,0$0.415,01.70%) .
But on Wednesday, Einhorn was more scattershot in a 15-minute talk at the annual Sohn Investment Conference, where he was one of most highly anticipated speakers.
As he launched into his talk, Einhorn warned the crowd that he would take them around the world in 137 slides, and he delivered. At breakneck speed he rattled off his worries about Martin Marietta Materials (MLM:$68.60,00$-6.12,00-8.19%) , reiterated his love for Apple (AAPL:$546.075,0$-7.095,0-1.28%) and confounded listeners with his thoughts on Amazon (AMZN:$224.06,00$-0.33,00-0.15%) .
But Einhorn, who runs hedge fund Greenlight Capital, didn't unveil any big investment idea at the conference as he did in 2008 with his critical and prescient take on Lehman Brothers.
It was that call that catapulted the conference, a charitable event that raises money for pediatric cancer research, into a must-attend event for wealthy investors.
And, unlike in most of his prior talks, Einhorn rarely said if his Greenlight Capital fund had taken a position in any of the stocks.
And simply by not mentioning nutritional supplements seller Herbalife (HLF:$49.51,00$7.07,0016.66%) , he sent the company's shares up nearly 17 percent as investors heaved a sigh of relief that he did not announce the he was betting on its demise. Einhorn pushed the stock down about 20 percent on May 1 just by asking hard questions of management on a call with analysts.
Only a year ago at this conference Einhorn made a long and thoughtful case that Microsoft should replace Chief Executive Steve Ballmer. This year, he touched on nearly everything.
On Wednesday, the Greenlight Capital founder offered a negative view of North Carolina-based company Martin Marietta Materials (MLM:$68.60,00$-6.12,00-8.19%) , calling its chief executive a "megalomaniac." But he was positive about Cairn Energy (CRNZF:$5.13,00$-0.02,00-0.39%) , an oil and gas producer based in Scotland.
Joking that the road show for Facebook's (FB:...) upcoming initial public offering "felt like a rock concert," Einhorn said he preferred two social networking companies in Japan that trade at much lower valuations.
Einhorn extolled Apple (AAPL:$546.075,0$-7.095,0-1.28%) , a long-time holding, as a misunderstood technology maker. "I have a hard time seeing how anyone ranks Apple (AAPL:$546.075,0$-7.095,0-1.28%) as below average," he said on stage at New York'sAvery Fisher Hall.
On Internet retailer Amazon (AMZN:$224.06,00$-0.33,00-0.15%) , Einhorn questioned why the company's profits have not increased in line with revenue. Pointing to Amazon's (AMZN:$224.06,00$-0.33,00-0.15%) high price-to-earnings ratio, he said the company's future was "a riddle."
Some attendees at the conference were puzzled about what he was really saying.
There was an implication that "it might be dangerous to be long Amazon (AMZN:$224.06,00$-0.33,00-0.15%) now," said Adib Motiwala, a portfolio manager at Motiwala Capital LLC, a registered investment adviser. But no one really knew for sure and Einhorn's spokesman had no further comment.
Even though there were no clear takeaways from Einhorn's presentation -- the very thing for which people pay the $4,000 to attend -- audience members were still pleased.
But for some less really was more.
Motiwala said he liked the one female presenter -- Eagle Capital'sMeryl Witmer -- best because she gave two simple and clear ideas. (Additional reporting by Aaron Pressman; Editing by Steve Orlofsky)
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