(Adds details from letter)
By Svea Herbst-Bayliss
BOSTON, July 25 Hedge fund manager David
Einhorn, whose picks are closely watched on Wall Street, said he
is betting against supermarket chain Safeway Inc but
still likes his biggest holdings, including Apple Inc.
Einhorn's Greenlight Capital told investors in a letter seen
by Reuters that gains in Micron Technology, Apple and
SunEdison Inc helped push its funds up 7.9 percent
during the second quarter, leaving it with gains of 6.4 percent
for the first half.
It also described short positions against Safeway,
Questcor Pharmaceuticals Inc, cigarette maker Lorillard
Inc and Martin Marietta Materials Inc, all of
which have been involved in what Einhorn calls "takeover
season." Questcor "was the only significant loser in the
portfolio," the letter said.
A spokesman for the firm declined to comment.
Einhorn also hinted at a future short bet by saying,
Mallinckrodt Pharmaceuticals Plc, which agreed to buy
Questcor, "is setting itself up to be a very attractive short
sale candidate if the merger is completed." Questcor makes only
one product and Mallinckrodt will have to use borrowed money to
buy its target, the letter said.
Earlier this year, Einhorn and other fund managers caused a
stir by suggesting that another bubble is building in technology
stocks. "Nothing could be further form the truth," he wrote in
Friday's letter, noting that many of his largest bets are in the
technology sector. "We believe that stocks including Apple, Lam
Research, Marvell Technology and Micron Technology have
strong prospects are undervalued."
He also said the firm made a medium-sized new investment in
semi-conductor capital equipment maker Lam Research Corp
, noting that the firm bought the shares at $54.07. They
closed the quarter at $67.58.
The fund sold out of positions in Aspen Insurance Holdings
and Rite Aid because their "shares reached fair
(Reporting by Svea Herbst-Bayliss; Editing by David Gregorio
and Steve Orlofsky)