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James Li
James Li
Articles (1441)  | Author's Website |

David Einhorn's Top 5 Trades in the 2nd Quarter

Greenlight plunges into gold ETF and aviation service company

David Einhorn (Trades, Portfolio), board chairman of Greenlight Capital Re Ltd. (NASDAQ:GLRE), disclosed last week that his fund's top five trades in the second quarter included new positions in VanEck Vectors Gold Miners (GDX), Atlas Air Worldwide Holdings Inc. (NASDAQ:AAWW) and Teck Resources Ltd. (NYSE:TECK), and sells in Altice USA Inc. (NYSE:ATUS) and CNX Resources Corp. (NYSE:CNX).

Managing a portfolio of 23 stocks, Einhorn seeks long-term capital appreciation through an investment approach emphasizing intrinsic value. He is a noted activist investor, taking positions in companies and pushing for management changes.

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As of quarter-end, Einhorn's $922 million equity portfolio contains 23 stocks, with 11 new positions and a turnover ratio of 26%. The top three sectors in terms of weight are consumer cyclical, industrials and financial services, representing 36.11%, 21.78% and 10.98% of the portfolio.

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VanEck Vectors Gold Miners

Greenlight purchased 1,833,100 shares of VanEck Vectors Gold Miners, dedicating 7.29% of its equity portfolio to the stake. Shares averaged $32.73 during the second quarter.

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Greenlight said in its quarterly letter that the fund "has been positioning the portfolio in anticipation of rising inflation." The fund said that although it has owned gold for a long time, it reduced its direct exposure and added the exchange-traded fund that seeks to track the performance of companies involved in the gold mining industry according to VanEck's website.

Atlas Air Worldwide Holdings

Greenlight purchased 1,417,745 shares of Atlas Air Worldwide Holdings, dedicating 6.61% of its equity portfolio to the stake. Shares averaged $34.87 during the second quarter.

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The Purchase, New York-based company provides outsourced aircraft and aviation operating services. GuruFocus ranks the company's profitability 7 out of 10, driven by operating margins and three-year revenue growth rates outperforming over 71% of global competitors.

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The fund said in its letter that while long-haul international air travel traffic nosedived 90% during the coronavirus pandemic, market shipping rates of airfreight products increased over 100% year over year during the second quarter.

Teck Resources

Greenlight purchased 2,397,500 shares of Teck Resources, giving the position 2.71% equity portfolio weight. Shares averaged $9.14 during the second quarter.

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The Vancouver-based company mines for a wide range of commodities, including metallurgical coal, copper, zinc and oil. GuruFocus ranks Teck's profitability 7 out of 10 on the back of expanding operating margins and returns that are outperforming over 70% of global competitors.

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Greenlight said in its shareholder letter that it sees potential in Teck due to base metal price increases.

Altice USA

Greenlight sold 1,625,380 shares of Altice USA, reducing the equity portfolio 5.16%. Shares averaged $24.49 during the second quarter.

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GuruFocus ranks the New York-based telecom company's financial strength 2 out of 10 on several warning signs, which include interest coverage and debt ratios that are underperforming over 89% of global competitors.

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CNX

Greenlight sold 4,348,038 shares of CNX, reducing the holding 58.85% and the equity portfolio 3.30%. Shares averaged $9.98 during the second quarter.

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GuruFocus ranks the Canonsburg, Pennsylvania-based energy company's financial strength 3 out of 10 on the back of a low Altman Z-score of 0.53 and a debt-to-equity ratio that underperforms 60.95% of global competitors.

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Disclosure: No positions.

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About the author:

James Li
I am an editorial researcher at GuruFocus. I have a Master's in Finance from SMU, and I enjoy writing reports on financial trends and investor portfolios. Follow me on Twitter at @JamesLiGuru!

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