Greenlight Capital Inc., David Einhorn’s hedge fund, sold shares in Aetna Inc. and Cigna (CI:US) Corp. last quarter, trimming holdings of insurers before the rollout of President Barack Obama’s health-care reform.
Einhorn’s fund sold 1.2 million shares of Aetna in the quarter, leaving it with 5.6 million shares at the end of September, according to a filing with the Securities and Exchange Commission today. The firm also pared its stake in Cigna by 330,000 shares last quarter.
The sales came before online health exchanges meant to extend coverage to millions of the uninsured under the Patient Protection and Affordable Care Act started Oct. 1.
Cigna rallied 44 percent and Aetna advanced 38 percent through the third quarter this year, outpacing the 18 percent rise in the Standard & Poor’s 500 Index. (SPX) The two count as the fourth and fifth-largest holdings by market value in Greenlight’s portfolio, according to the SEC filing.
The firm also pared its holding in Rite Aid Corp., selling 4 million shares, or one-fifth of its stake, in the drug-store chain. The stock more than tripled during the first three quarters of the year.
Einhorn, who established a reputation as a short seller by betting against Lehman Brothers Holdings Inc. before it collapsed in 2008, added 782,000 shares to his stake in Spirit AeroSystems Holdings Inc., a maker of plane parts. He bought a position in mattress maker Tempur Sealy International Inc. with the purchase of 1.15 million shares worth $50.6 million, the filing showed.
Greenlight did not make any changes to its stake in Apple Inc., which accounts for 20 percent of the market value of the firm’s holdings. Einhorn’s 2.4 million shares in the iPhone maker increased in value by $192.3 million last quarter to finish September worth $1.14 billion. Apple shares rallied 20 percent in the period.
Einhorn also left unchanged his stakes in General Motors Co. and Marvell Technology Group Ltd., the next two largest holdings in his portfolio.
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