By Svea Herbst-Bayliss
BOSTON Jan 22 Hedge fund manager David Einhorn, whose Greenlight Capital ranked among last year's best performers, has taken new positions in Micron Technology Inc and BP Plc, both of which he praised in a letter to investors for practices focused on returning cash to shareholders.
Greenlight also added a position in Anadarko Petroleum Corp while closing out investments in Thyssen Krupp and Airbus Group, Einhorn said in the letter, which was seen by Reuters.
Einhorn's hedge fund had held a short position in Micron , a semiconductor memory chip maker, between 2001 and 2005.
"This is the first time we have taken a long position in a company in which we once had a material short position," Einhorn wrote about Micron, which helped contributed to his fund's strong returns last year.
New York-based Greenlight bought Micron at roughly $16.49 a share, Einhorn said in the letter, and is encouraged that the company intends to use its excess cash to buy back shares and not build new factories. He also said the industry is now less crowded than it was when his fund shorted Micron between 2001 and early 2005.
Micron on Wednesday was trading at $23.48.
Einhorn credited Micron, Apple Inc, General Motors Co and the Japanese yen for helping Greenlight gain 19.5 percent last year.
The average hedge fund gained 9 percent in 2013, according to research firm HFR, while the S&P 500, the benchmark equities index, gained 32.4 percent.
Einhorn also praised BP Plc for its newly shareholder friendly actions of restricting capital expenditures and increasing dividends. He said the company could create value by selling assets at or above its net asset value and use the income to buy back stock at a discount.
Greenlight bought BP's New York-listed shares at $47.39, Einhorn said. On Wednesday the shares were trading at $49.02.
Einhorn listed Chipotle Mexican Grill Inc and U.S. Steel Corp as investments that hurt Greenlight's portfolio.