Friday, 25 July 2014
Last updated 1 hour ago
Jul 29 2013 | 11:21am ET
Greenlight Capital has closed its highly-profitable short bet against retailer J.C. Penney Co. while decrying a lowering of expectations on corporate earnings.
The J.C. Penney short was New York-based Greenlight's most profitable last year. But the firm said it had ended its bet against the company, as well as one against fellow retailer Dick's Sporting Goods.
Greenlight returned 1.2% in the second quarter and is up 7.1% on the year.
The hedge fund also closed several long bets, including investments in CBS Corp. and Microsoft, and reduced others, including Seagate Technologies. But it reaffirmed its confidence in General Motors and held on to its stake in Apple Inc., despite heavy losses for the latter recently.
More generally, Greenlight wrote that companies are no longer seeking to "beat estimates and raise guidance" to boost share prices. Instead, lowering guidance to ensure beating estimates has become the norm.
"Lowering the bar seems to be treated as bullish because it increases the likelihood of future earnings beats," it wrote.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…