Stocks That David Einhorn is Bullish About (Part I): Apple Inc (AAPL), Marvell Technology Group Ltd (MRVL)
As of September 2012, Apple was the biggest position in his portfolio. With more than 1 million shares, Apple accounted for 12.2% of his total portfolio. Apple closed the first quarter 2013 with a quite strong balance sheet. It had $16 billion in cash, $23.7 billion in short-term marketable securities, and nearly $97.3 billion in long-term marketable securities. The cash, short-term, and long-term marketable securities combined were more than $137 billion. Subtracting that from the market capitalization of $436 billion, Apple is priced at around $300 billion, valued at 5.12x EV/EBITDA. Thus, Einhorn continued to be bullish on Apple in a long run.
He is slightly richer than Cramer. Cramer keeps consulting with his daughter.
My friend was actually at Einhorn's investor conference which was a day or two before AAPL earnings and she asked him about AAPL after the presentation was over. He said he was holding and would be watching his screen closely during earnings. He's a very astute investor and in the presentation beforehand he talked about his mistakes and success.
Besides that the $140 Billion of Cash or Cash Equivalents Apple holds are not needed for the company's cash-flow-positive operations, so should come off the valuation since an Acquirer could pay it all out,.. fact is Apple's huge cash-pile also will earn it $7 - $14 billion this year (at only 5 - 10% return on investment of the cash)