Reuters Summit-"Long" opportunities beckon hedge fund
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NEW YORK, Dec 10 (Reuters) - Activist hedge fund manager David Einhorn, well known for his short bets on firms such as MBIA Inc (MBI.N) and Allied Capital Corp (ALD.N), said on Monday he is finding plenty of opportunities in the current market to take long positions.
"I think there's a lot of good things to do on the long side. We are long much more than we are short as a portfolio, as a business," said Einhorn, president of Greenlight Capital Inc, at the Reuters Investment Outlook 2008 Summit in New York.
Einhorn, who runs a $5.5 billion hedge fund and another fund-of-funds which has more than $1 billion in assets, said software firm Microsoft Corp (MSFT.O), retailer Target Corp (TGT.N), Helix Energy (HLX.N) and MDC Holdings (MDC.N) were among his long positions.
On Microsoft, which he called a "large" position in the hedge fund, the stock was "very inexpensive" with a valuation of 17 to 18 times current year's earnings net of cash, Einhorn said.
"They made some serious progress in a number of areas, including anti-piracy efforts, which are beginning to bear some fruit. And their gaming division is doing better than it was," he said.
Einhorn's fund has also been mentioned in the media as a buyer of a stake in Austrian postal service firm Oesterreichische Post (POST.VI), but he declined to comment on it.
On the short side, Einhorn said he has been short on MBIA, the world's largest bond insurer, for five years and said it suffers from a "flawed business model." He is also short on business development firm Allied, with which Einhorn has had a long public battle.
The fund is also short on "a broad range of credit sensitive companies," Einhorn said, without naming the firms. But it was bullish on financial services companies which are not credit-sensitive such as Ameriprise Inc (AMP.N) and Spanish firm Criteria (CRIT.MC), he said.
"There's a real opportunity here to be long financial services companies that are not credit-sensitive because they've been sort of thrown out with the bathwater at the same time as the credit sensitive companies," Einhorn added.
(Reporting by Muralikumar Anantharaman, editing by Richard Chang)
