News broke just days ago that David Einhorn has shifted his holdings around considerably in recent months. The billionaire investor and head of hedge fund Greenlight Capital bought up a new stake in Hewlett Packard Enterprise, Co. (HPE) and eliminated several other positions from his portfolio. A report by Nasdaq highlights the shifts in Einhorn's portfolio and offers some speculation as to what the changes are about.

Potential for "Consistent Returns"

According to the Nasdaq report, Einhorn seeks out long-term capital appreciation via investments that have the potential to provide consistent returns. For this reason, Einhorn's investment in 4.45 million shares of HPE stock at an average cost of $17.96 per share seems to be in keeping with his overall strategy. The report points out that HPE had second-quarter revenues which declined by 13% as compared with those for the three-month period ending the last day of April in 2016. Even in spite of those barriers, the company was able to move forward on a number of major components of its overall growth strategy, according to HP CEO Meg Whitman. The company's Chief Financial Officer Tim Stonesifer suggested that the remainder of the year should bring improvement, owing to the company's plans to "[mitigate] commodities cost pressure and [eliminate] costs associated with spin mergers and acquisitions." In spite of the complicated scenario the company finds itself in, its profit margins have reached levels approaching a 10-year high, and the company outperforms more than 70% of its global competitors.

All of these factors suggest that Einhorn may have seen the potential for great profit in HPE stock, which could be priced lower than it will eventually be.

Einhorn Looks to Toshiba, Too

In other news related to Einhorn's investment strategy, Financial Times reports that Greenlight Capital adopted a new long position in Toshiba (TYO), the tech product company, in the June quarter. This comes at the same time that analyst notes from Citigroup, CLSA, and JPMorgan all upgraded ratings for the company for the first time since it experienced a financial crisis in 2016. Greenlight may be placing a bet on the company's achieving a miraculous escape from its complicated financial mire, and Einhorn's not alone: King Street Capital apparently also took on a 5.8% stake in the company over the course of this month.

Einhorn wrote in a note to investors that Toshiba represents an undervalued company, predicting that "investors will refocus on the significant margin and valuation upside at Toshiba once it has resolved current uncertainties."