Net Net: Promoting innovation and managing change
Net Net: Promoting innovation and managing change

Greenlight takes Lam Research stake, gains on Micron, Apple

Greenlight Capital president David Einhorn pauses during an interview in New York.
Scott Eells | Bloomberg | Getty Images

Greenlight Capital, David Einhorn's hedge fund firm, gained 7.9 percent in the second quarter, according to a letter sent to investors Friday.

The fund gained on Micron Technology, Apple, SunEdison, Altice, Resona and Civeo, according to the letter, bringing returns for the first half of 2014 to 6.4 percent net of fees.

Greenlight also disclosed that it made a "medium sized" new investment in Lam Research, which makes semiconductor capital equipment.

"As transistors get smaller and smaller, the conversion of semiconductor designs into working chips becomes more difficult," the letter said. "The solution, known as 'multi-patterning', involves running each layer of the chip through the manufacturing line multiple times, etching away the excess material until the chip works properly. This forces chip manufacturers to buy more of LRCX's etchers and deposition tools for each manufacturing line."

A spokesman for Greenlight declined to comment.

The largest long positions for Greenlight as of June 30 were Apple, gold, Marvell Technology, Micron Technology, Resona Holdings and SunEdison. Short positions, which cost the fund in the second quarter, were not fully listed.

On Micron, the letter said that "we believe consensus earnings estimates remain too low, positioning the company for further earnings surprises and multiple expansion."

On Apple, Greenlight noted that "AAPL remains inexpensive at about 11x earnings net of cash."

Greenlight also said it closed profitable positions in Aspen Insurance Holdings and Rite Aid.

The contents of the letter were previously reported by MarketFolly.

—By CNBC's Lawrence Delevingne