David Einhorn (Trades, Portfolio), president of Greenlight Capital Re Ltd. (GLRE, Financial), disclosed this week that his firm's top five trades during the first quarter included sells in Green Brick Partners Inc. (GRBK, Financial) and AerCap Holdings NV (AER, Financial), positions that were among the top five holdings as of the December 2020 filing. Other top trades included sells in NCR Corp. (NCR, Financial), SPDR Gold Shares ETF (GLD, Financial) and VanEck Vectors Gold Miners ETF (GDX, Financial).
Greenlight's investing approach emphasizes the concept of intrinsic value. Additionally, the New York-based firm employs an activist approach to investing, taking positions in companies and then pushing for changes from company management.
As of March 31, the firm's $1.44 billion equity portfolio contains 62 stocks, with 20 new positions and a turnover ratio of 14%. The top four sectors in terms of weight are consumer cyclical, financial services, industrials and basic materials, representing 29.77%, 17.44%, 15.31% and 13.10% of the equity portfolio.
Green Brick Partners
Greenlight sold 6.7 million shares of Green Brick Partners (GRBK, Financial), curbing the position 27.78% and the equity portfolio 9.25%. Shares averaged $21.31 during the first quarter; the stock is significantly overvalued based on Tuesday's price-to-GF Value ratio of 1.43.
Einhorn said in his quarterly shareholder letter that Green Brick Partners doubled in 2020, leading to an excessive weight within the portfolio. According to top 10 holdings statistics, a Premium feature of GuruFocus, Green Brick occupied 33.30% of the equity portfolio as of the December 2020 quarter. While the position remains Greenlight's largest position, Green Brick occupies just 27.50% of the equity portfolio as of March 31. Based on GuruFocus estimates, Greenlight has gained approximately 171.25% on the stock so far.
GuruFocus ranks the Plano, Texas-based homebuilding and construction financing company's profitability 7 out of 10 on the back of profit margins outperforming over 70% of global competitors and returns outperforming more than 80% of global homebuilding companies.
Greenlight sold 1,657,902 shares of AerCap (AER, Financial), slashing 71.37% of the position and 4.55% of the equity portfolio. Shares averaged $48.60 during the first quarter; the stock is fairly valued based on Tuesday's price-to-GF Value ratio of 1.08.
The firm mentioned in its shareholder letter that the stock returned 29% during the quarter on the heels of AerCap acquiring General Electric Co.'s (GE) GE Capital aircraft leasing business at a discount. Based on GuruFocus estimates, Greenlight has gained approximately 24.76% on the stock so far.
GuruFocus ranks the Irish aircraft leasing company's financial strength 3 out of 10 on several warning signs, which include a low Piotroski F-score of 3, a weak Altman Z-score of 0.56, a debt-to-equity ratio that underperforms over 90% of global competitors and a Beneish M-score that suggests possible earnings manipulation.
The firm sold 1,026,147 shares of NCR Corp. (NCR, Financial), trimming the equity portfolio 2.32%. Shares averaged $35.84 during the first quarter; the stock is significantly overvalued based on Tuesday's price-to-GF Value ratio of 1.70.
GuruFocus ranks the Atlanta-based ATM vendor's financial strength 3 out of 10 on several warning signs, which include a low Piotroski F-score of 3, a weak Altman Z-score of 1.53 and interest coverage and debt ratios that underperform more than 90% of global competitors.
SPDR Gold Shares and VanEck Vector Gold Miners
Greenlight sold 265,870 shares of SPDR Gold Shares ETF (GLD, Financial), knocking off 72.28% of the stake and 2.85% of the equity portfolio. The firm also sold 969,100 shares of VanEck Vector Gold Miners ETF (GDX, Financial), cleaning out the position and freeing up 2.10% of the equity portfolio. Shares of the former gold exchange-traded fund averaged $168.06 during the first quarter, while shares of the latter ETF averaged $34.07.
Disclosure: No positions.
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