David Einhorn of Greenlight Capital Management is considered one of the most successful hedge-fund managers of all time. With a net worth of more than $1 billion and assets under management of more than $6 billion, Einhorn’s smallest moves are watched closely by insiders.

Einhorn’s reputation has been built upon the short sale.

He first rose to fame in 2002 after taking a huge short position in Allied Capital and making millions on accusations of fraudulent accounting practices that sent its stock crashing.#-ad_banner-#

But his big leap into superstardom came in 2008 with his call on a Lehman Brothers bankruptcy. At the time, it was a huge contrarian opinion, and when it came to fruition in the financial crisis later that year, he made billions.

He followed that legendary call with another huge short position in 2011, this one in Green Mountain Coffee Roasters (Nasdaq: GMCR), right before shares crashed from more than $100 to less than $20. These are the kind of big-money investments Andy Obermueller looks for in his “Game-Changing Stocks” newsletter.

That incredible string of winners has lifted Einhorn’s Greenlight Capital Management to 22% annual returns since 1996 — one of the best track records in the history of hedge-fund managers.

Clearly, Einhorn is a hedge-fund manager who knows how to analyze a stock and identify company weaknesses and strengths. And with the market trending higher in 2012, Einhorn aggressively added to his long positions.

Einhorn’s six biggest stock purchases last year:

From this group, I have chosen to highlight Apple (Nasdaq: AAPL) because it’s Einhorn’s largest position and Cigna Corp (NYSE: CI) because of its exposure to long-term growth in health care services.

Apple
Einhorn’s position in Apple represents almost 11% of his entire portfolio. After boosting his stake in Apple by 20% in 2012, Einhorn now owns 1.3 million shares.

As a big advocate of value investing, Einhorn’s interest in Apple makes sense. After falling 32% in the past six months, Apple’s forward P/E (price-to-earnings) ratio of 10 times is a 10-year low and a 30% discount to the S&P 500’s forward P/E of 15.

Although Apple’s growth has slowed, the company is still an earnings machine. Analysts are calling for earnings per share (EPS) of $51 in 2014 and annual growth of 15% in the next five years, almost double the industry average of 8%.

And don’t forget the solid 2.4% dividend yield. But with more than $100 billion in cash on the balance sheet, there is plenty of room for buybacks and dividend increases.

Cigna
A leading provider of health insurance in the U.S. and internationally, Cigna has a market cap of $18 billion.

Cigna already occupies a leading position in the health insurance industry, and it is continuing to expand into other segments of health care. Its $43.8 billion purchase of HealthSpring in 2012 immediately made it a big player in Medicare Advantage, which provides eligible participants with private health care options.

Cigna also appears to be insulated from potential threats of health care reform, thanks to administrative services accounting for 85% of its domestic business. The company also continues to expand into high-growth Asian markets such as China and South Korea. Despite all that good news, however, Cigna still looks undervalued, trading with a P/E ratio of 10 times that is in line with its 10-year average but a sharp discount to the S&P 500’s 15 times.

Risks to Consider: David Einhorn’s performance has cooled in the past few years. His huge position in Apple is also being called into question after an unsuccessful proxy battle to create a special class of shares and share buybacks.

Action to Take –> David Einhorn is one of the most successful hedge-fund managers of all time. Although Einhorn built his reputation on shorting, he made big additions to his long positions in 2012. These six stocks saw the biggest increase in total positions. From that group, my two favorites are Apple because it’s Einhorn’s biggest position and Cigna because of its exposure to the bullish growth trend in health care. Given Einhorn’s votes of confidence in these companies, their stocks warrant fresh attention.

P.S. — When you get in on the ground floor of a promising new trend or technology, the profits that can follow can change your life forever. Andy Obermueller’s Game-Changing Stocks is entirely devoted to finding the next big, life-changing investing idea. See his latest report for more ground-breaking investment plays.