Einhorn Discloses Stakes in BP and Anadarko

The hedge fund manager David Einhorn has made a pair of bets on the oil sector.

Mr. Einhorn’s firm, Greenlight Capital, said in a quarterly letter to investors on Tuesday that it had taken stakes in BP of Britain and Anadarko Petroleum, which is based in Houston. Greenlight Capital did not disclose the value of the stakes but said they were “medium-sized.”

In afternoon trading in New York, BP’s American depositary shares rose more than 1 percent, to about $49, while shares of Anadarko Petroleum were up more than 2 percent, at about $83.

One of Mr. Einhorn’s best-performing investments, Apple, got a lift on Wednesday after Twitter messages from another hedge fund manager, Carl C. Icahn. Shares of Apple rose 1.2 percent after Mr. Icahn said on Twitter that he had bought additional shares worth $500 million in the last two weeks, bringing the value of his stake to $3 billion.

Mr. Icahn, who has met with Apple’s chief executive, Timothy D. Cook, in a quest to convince the company to buy back more shares, called the investment a “no-brainer.”

In its letter, Greenlight also said it had taken a “large” position in Micron Technology during the quarter, an investment that Mr. Einhorn disclosed previously in a television interview. Micron, which makes semiconductor memory chips, was once viewed far less favorably by Mr. Einhorn, who bet against its shares from 2001 to 2005.

“The industry has changed and so has MU,” the letter said, using the company’s ticker symbol. The investment is “the first time we have taken a long position in a company in which we once had a material short position.”

Greenlight had a decent run last year, with a net return of 19.1 percent, according to the letter. A broad increase in the stock market helped that gain â€" though it also introduced challenges for Greenlight, which makes money by betting for and against stocks. The Standard & Poor’s 500-stock index had a 32.4 percent return in 2013.

“We do not expect to keep pace with a straight up market, and we didn’t,” Greenlight said.

The hedge fund’s best investments in the fourth quarter included positions in General Motors and the Marvell Technology Group, the letter said. Its worst were bearish bets against U.S. Steel and Chipotle Mexican Grill, a company Mr. Einhorn bet against with public fanfare in 2012.

Amid a discussion of the firm’s business, Mr. Einhorn took the opportunity to opine on trends in the market, particularly the “parabolic rise of a growing number of market-leading story stocks.” He did not identify these companies, but he expressed concern about their valuations.

“Speculators have momentarily accepted the ruse that, for these visionary companies, profitability would be a mistake,” the letter said. “Eventually, the market will remember that having a disruptive product that customers will happily buy if sold near cost is not the same as having a valuable business.”

Explaining the bet on BP, the letter said that stock market investors were overlooking the company’s improved return on capital in its core business, with too much focus on legal issues stemming from the Deepwater Horizon oil spill. Greenlight, which bought BP stock at an average price of $47.39 a share, argued that the company had a net asset value of nearly $70 a share.

As for Anadarko, the hedge fund said it bought the stock at an average price of $78.55 a share after a legal setback in December led to a sell-off. Even in the event of a worst-case outcome in the legal case, the company’s valuation relative to its rivals is “cheap,” the letter said.

On Tuesday, Greenlight held its 18th annual meeting for its investors at the American Museum of Natural History in Manhattan. The evening, according to an invitation, included a reception with “plentiful dinner fare” and cocktails in the Milstein Hall of Ocean Life â€" home to the famous diorama of a squid locked in battle with a whale.

A spokesman for Mr. Einhorn declined to comment.