Einhorn’s Greenlight Buys Sprint, Xerox While Selling RIM

David Einhorn’s Greenlight Capital Inc. bought shares of Sprint Nextel Corp. (S) and Xerox Corp. (XRX) during the second quarter while selling Research In Motion Ltd. (RIM)

Einhorn’s fund also bought Seagate Technology Plc and Barrick Gold Corp., according to a government filing released today. Greenlight increased its proportion of equity investments in health-care shares and reduced technology stock weightings, data compiled by Bloomberg show.

Greenlight returned 3.4 percent in the first half of the year, according to an investor letter dated July 23, a copy of which was obtained by Bloomberg News. Hedge funds gained 1.1 percent, according to data compiled by Bloomberg.

Sprint, the third-largest U.S. wireless carrier, has risen 53 percent since the end of June, while printing company Xerox slumped 8.8 percent. RIM, which makes the BlackBerry mobile phone, plunged 50 percent during the second quarter.

Greenlight Capital Inc. disclosed in its July 23 letter that it bought shares in Cigna Corp. and Coventry Health Care Inc. during the quarter. The companies have unlevered balance sheets and trade at single-digit price-earnings ratios, making them cheap, Greenlight said in the letter.

“There is the additional unpriced upside in the possibility that the election changes the political landscape, resulting in a possible modification or repeal of Obamacare,” the hedge fund said in the letter.

To contact the reporter on this story: Nikolaj Gammeltoft in New York at ngammeltoft@bloomberg.net

To contact the editor responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.