Hedge Fund Manager David Einhorn sold a number of big names that are of interest. The biggest sales are his Mylan (NASDAQ: MYL), Twitter (NYSE: TWTR), Micron (NASDAQ: MU), and Apple (NASDAQ: AAPL) positions. Unfortunately, Einhorn’s fund lost 9.1% in the third quarter. YTD, his fund is down by over 25%.
Selling Apple stock is an unusual move. The stock trades at a sub-20 times P/E multiple. Its iPhone XS refresh should drive profit margins even higher. The economy also shows no signs of weakness, which suggests demand for Apple products will not change.
Selling Micron is understandable. The stock topped out at above $60 and has yet to stop falling. Since June, the stock continues to face strong selling pressure despite a short float of just 5% and a stock valuation of below five times P/E. Markets are anticipating a slowdown in chip prices, so the P/E level is of no use.
Selling Mylan proved timely. The stock failed to break out above $40 a share. And investors have better picks to choose from in the generic drug space. Endo International (NASDAQ: ENDP) nearly tripled since June. Bausch Health (NYSE: BHC) stock continues to recover.
Takeaway
Einhorn had a rough year, due mostly to his short positions that include Tesla (NASDAQ: TSLA) stock. Long-term, his fund performed well, so investors should look at his stock sales as something to consider copying.
