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Greenlight Capital Inc., the hedge fund run by David Einhorn, bought shares of Dell Inc. (DELL) and Xerox Corp. (XRX) in the fourth quarter a

s part of a bet on undervalued U.S. stocks, according to a letter to investors.
“Our current strategy is to own cheap stocks of good businesses, largely in the United States,” Greenlight said in a letter dated Jan. 17, a copy of which was obtained by Bloomberg News. “We are more net long equities than we have been in some time, as we believe that many stocks have reached a point where they are simply cheap enough to own even if some trouble awaits us.”
Dell, the third-largest personal-computer maker, has broadened its products beyond computers and is undervalued, the New York-based hedge fund said in the letter. Greenlight bought Dell at an average price of $15.53. Shares of the Round Rock, Texas-based company gained 2 percent to $16.40 at 1:17 p.m. in New York trading.
Einhorn, whose fund can bet on rising and falling prices, is best known for shorting Lehman Brothers Holdings Inc. before it collapsed in September 2008. Greenlight gained 2.9 percent last year, according to the letter.
Xerox, Travelers
Greenlight also purchased shares of Xerox because the firm remains bullish on the Norwalk, Connecticut-based firm’s acquisition of Affiliated Computer Services Inc. in 2010. Einhorn’s fund initially bought Xerox after the takeover but sold amid concerns that the provider of printers and business services faced potential losses from the March 11 earthquake and tsunami in Japan. Greenlight originally bought Xerox at around $9.35 and repurchased the stock at $7.61, according to the letter.