“Sometimes, you just can’t win. Apple Inc. (NASDAQ:AAPL) was our largest loser in the quarter falling from $442.66 to $396.53 per share,” said hedge fund manager, David Einhorn of Greenlight Capital in his second quarter letter to investors. Despite suffering big losses from its stake in Apple Inc. (NASDAQ:AAPL), David Einhorn sticks with the company.

David Einhorn Greenlight Capital

“We continue to hold positions that cost us the most in the quarter,” said David Einhorn during the earnings call of Greenlight Capital RE, the reinsurance subsidiary of the hedge fund. He also emphasized that the shares of Apple Inc. (NASDAQ:AAPL) are undervalued. In addition, he said that the iPhone and iPad maker’s dividend of $3.05 per share and its huge stock buyback program supports investors.

In April, the board of directors of Apple Inc. (NASDAQ:AAPL) approved a $60 billion shares repurchase program and raised its dividend payment by 15 percent to $3.05 per share to appease investors amid the significant decline of the stock value of the company. In July, the tech giant said it returned $18.8 billion capital to shareholders by repurchasing shares and distributing dividend to shareholders. The stock of the company regained its value by 10 percent after reporting solid financial results that exceeded the expectations of Wall Street analysts.

David Einhorn expressed confidence in Apple shares

In his letter, David Einhorn expressed confidence that the shares of Apple Inc. (NASDAQ:AAPL) will recover unless its operating results are about to head off a cliff. He noted that the portfolio of the hedge fund was impacted in the second quarter by several developments within the  tech giant such as the decision of Apple’s board to return $100 billion to shareholders through shares buyback and dividend payment.  The market capitalization of Apple Inc. (NASDAQ:AAPL) at $372 billion by the end of the quarter implies a 9 percent annual return of capital to shareholders, as estimated by Einhorn.

Greenlight Capital owns around 2.4 million shares of Apple Inc. (NASDAQ:AAPL) worth approximately $1 billion based on data compiled by Bloomberg in the first quarter this year.

David Einhorn exited from Microsoft

On the other hand, Greenlight Capital exited its position in Microsoft Corporation (NASDAQ:MSFT). According to David Einhorn, the hedge fund considered the software giant as an A-Rod in 2006, which was a compliment. However, its conviction about the company changed because the “Windows 8 appears to be a flop. He also emphasized that “a decade of mismanagement put the company at risk of becoming a shrinking company.”

He said the hedge fund had the opportunity to exit its position after an activist hedge fund helped boost the stock price of Microsoft Corporation (NASDAQ:MSFT), and gained an annualized high single-digit return.