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David Einhorn’s Greenlight Capital: Analyzing Its 13F

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On November 14, Greenlight Capital filed its 13F. In the third quarter, Greenlight Capital bought a fresh stake in one stock. In the same quarter, the company increased stake in four existing stocks. Notably, David Einhorn, the president, founded Greenlight Capital in 1996. 

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Top buys

In the third quarter, Greenlight Capital’s top buys were Brighthouse Financial (BHF), NeuBase Therapeutics (NBHF), The Chemours Company, and Adient. The company bought a fresh stake in NeuBase Therapeutics. Overall, NeuBase Therapeutics accounted for 0.6 percentage points of Greenlight’s total portfolio of publicly traded securities. In addition, Greenlight Capital increased the stake in Brighthouse Financial, The Chemours Company, and Adient by 1.5, 0.4, and 0.2 percentage points, respectively.

Greenlight Capital’s exits

In the third quarter, Greenlight Capital exited Hilton Grand Vacations, KAR Auction Services (KAR), Valaris (VAL), and Cars.com (CARS). In the second quarter, these companies accounted for approximately 2, 1.6, 0.9, and 0.3 percentage points, respectively, of the total portfolio of publicly traded securities. So far this year, Hilton Grand Vacations and KAR Auction Services have risen 33.2% and 24.6% as of November 15. During this period, Valaris and Cars.com have fallen 69.2% and 41%.

In the third quarter, Greenlight Capital’s top sells were Dillard’s (DDS) and EchoStar (SATS). Greenlight Capital reduced its holdings in these companies by 0.4 and 0.3 percentage points, respectively.

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Greenlight Capital’s top holdings

In the third quarter, Greenlight Capital’s top holdings were Green Brick Partners (GRBK), General Motors (GM), AerCap Holdings N.V. (AER), Brighthouse Financial, and The Chemours Company. These stocks accounted for approximately 18.6, 16.6, 13.7, 10.4, and 7 percentage points, respectively, of the total portfolio of publicly traded securities.

Greenlight Capital is the largest institutional investor in Green Brick. The company has a stake of around 47.7% in Green Brick. Moreover, the company has held Green Brick since the second quarter of 2007. From the second quarter of 2007 to date, Green Brick has fallen 91.7%. On November 7 after the market close, Green Brick reported its third-quarter earnings results. The company reported an adjusted EPS of 31 cents, which was 14.8% higher than analysts’ mean estimate. The next day, Green Brick rose 4.3%. 

Analysts’ mean target price suggests an upside of 7.2% in Green Brick. Based on the Reuters survey, among the three analysts tracking Green Brick, two recommend a “buy” or a “strong-buy,” while one recommends a “hold.”  

Einhorn’s recent views

At the end of the third quarter, the total market value of Greenlight’s portfolio of publicly traded securities was around $1.39 billion. The company might have made a considerable loss in Tesla’s short position. To learn more, read Tesla Stock Gains Dim Einhorn’s Greenlight. On a year-to-date basis, Greenlight Capital has risen 20.1% as of November 15. The company has underperformed the S&P 500 Index by 4.4 percentage points.

Also, the company made a profit on Netflix’s put options. In a letter, Einhorn said that Netflix is “yet to demonstrate a profitable business model.” On a YTD basis, Netflix has risen 10.2%. Read David Einhorn: Is It the Right Time to Short Netflix? to learn more.

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