Billionaire investor David Einhorn of Greenlight Capital is arguably best known for many of the short positions his hedge fund has taken. His initial claim to fame was shorting Allied Capital followed by his famous short of Lehmann Brothers before its collapse. Also, he shorted Tesla (NASDAQ:TSLA) in 2020 as the electric vehicle (EV) stock began a massive climb up the charts. Ouch.
Einhorn, of course, is much more than just a short-seller, or someone who bets a stock price is going to fall. Greenlight Capital itself is a long-short hedge fund. That means while Einhorn currently has several short positions (the names were not disclosed), his portfolio is also chockfull of long stakes too. At the end of the first quarter, Einhorn had an average long exposure of 108% and an average short exposure of 63%.
The following three David Einhorn stocks are the largest positions Greenlight holds.
Green Brick Partners (GRBK)
The biggest position Einhorn has in his hedge fund is homebuilder and land development company Green Brick Partners (NYSE:GRBK). He owns 11.4 million shares with an average buy price of around $8.70 per share, according to HedgeFollow. That values his stake at over $592 million. With Green Brick Partners trading at over $54 a share today, Einhorn is sitting on a massive profit.
While operating primarily in Texas, Georgia, Colorado and Florida, the rising interest rate and high inflation environment has not measurably hurt GRBK’s performance. Over the past three years, shares doubled in value. It ended 2023 with record revenue of $1.8 billion and record profits of $6.14 per share.
The higher-for-longer policies of the Federal Reserve could eventually weigh on Green Brick Partners. But with a housing inventory supply still present, more tailwinds than headwinds will drive this stock higher still.
Einhorn has owned Green Brick Partners stock for decades and serves as the builder’s chairman of the board. There’s a good reason it accounts for 28.9% of Greenlight’s portfolio today.
CONSOL Energy (CEIX)
The second biggest holding in the portfolio at 10.3% is CONSOL Energy (NASDAQ:CEIX), a Pennsylvania coal miner. It produces and exports high-British thermal unit (BTU) bituminous thermal and metallurgical coal.
Despite being seen as a “dirty” form of energy, CONSOL Energy stock has been nothing but green for investors with an 840% return over the past three years. It just so happens 2023 was the coal miner’s third consecutive year of production and sales volume growth.
That’s because the U.S. became hostile to coal plants so CEIX refocused itself on the export market. The miner strategically repositioned itself so 70% of its $2.57 billion in revenue now comes from the export market.
CEIX’s operation extend as far back as 1864, and it owns a diversified portfolio of underground and surface mining assets. Their flagship project is the Pennsylvania Mining Complex. It produced 26.1 million tons of coal last year, 60% of which was exported.
Oil, gas and coal are all still vital to the world’s energy needs, and CONSOL shows they can be met profitably as well.
Brighthouse Financial (BHF)
Brighthouse Financial (NYSE:BHF) is Einhorn’s third largest holding with a 7.9% position in Greenlight Capital. It hasn’t had nearly the same kind of growth experienced by either Green Brick Partners or CONSOL Energy. Its stock is up only 3% in three years.
The company is one of the largest providers of annuities and life insurance. BHF was formed as a spinoff from MetLife (NYSE:MET) in 2017, and Einhorn has owned the stock since.
The stock certainly meets Einhorn’s definition of a value stock. Shares go for just over $48 a stub. But, at the end of the fourth quarter, it had a book value of $133.69 per share. That means it trades for discounted 36% of its book value. And yet, selling variable annuities and life insurance in a high interest rate environment is more difficult.
According to Einhorn, Greenlight experienced a tough year with the stock because it had an “unexpected accounting change” that impacted the company’s statutory capital. Despite underperforming the market for the past few years by a wide margin, the company otherwise looks to be in fine financial shape. It is worthy of the vote of confidence Einhorn has given it.
On the date of publication, Rich Duprey did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
