Despite finding success with his basket of short positions last year, Greenlight Capital leader David Einhorn (Trades, Portfolio) still sees plenty of value opportunities in the market.
The activist investor’s New York-based firm, which seeks to generate long-term capital appreciation by taking an approach rooted in emphasizing intrinsic value, invests in companies that have the potential to achieve consistent returns and safeguard capital regardless of market conditions.
As of the end of the fourth quarter of 2022, the consumer cyclical sector had the largest representation in Einhorn’s $1.44 billion 13F equity portfolio with a weight of 40.43%.
Despite recording a disappointing performance in 2022, the sector is up 3.29% year to date.
As such, value opportunities may be found among consumer cyclical stocks in Einhorn’s 13F portfolio.
According to GuruFocus portfolio data, the guru’s consumer cyclical holdings as of the end of the three months ended Dec. 31 were Green Brick Partners Inc. (GRBK, Financial), The ODP Corp. (ODP, Financial), Capri Holdings Ltd. (CPRI, Financial), Graphic Packaging Holding Co. (GPK, Financial), Victoria’s Secret & Co. (VSCO, Financial) and Funko Inc. (FNKO, Financial).
Investors should be aware that 13F filings do not give a complete picture of a firm’s holdings as the reports only include its positions in U.S. stocks and American depository receipts, but they can still provide valuable information. Further, the reports only reflect trades and holdings as of the most-recent portfolio filing date, which may or may not be held by the reporting firm today or even when this article was published.
Green Brick Partners
In the fourth quarter, the investor trimmed his Green Brick Partners (GRBK, Financial) stake by 0.77% to 16.9 million shares. As the guru’s largest holding, the position accounts for 28.40% of the equity portfolio. GuruFocus estimates Einhorn has gained 261.10% on the long-held investment.
The Plano, Texas-based homebuilding and land development company has a $1.52 billion market cap; its shares were trading around $32.93 on Monday with a price-earnings ratio of 5.46, a price-book ratio of 1.49 and a price-sales ratio of 0.90.
The GF Value Line suggests the stock is modestly overvalued currently based on historical ratios, past financial performance and analysts’ future earnings projections.
At 87 out of 100, the GF Score indicates the company has good outperformance potential on the back of high profitability and growth ratings, middling marks for financial strength and momentum and a low GF Value rank.
Of the gurus invested in Green Brick, Einhorn has the largest stake with 36.73% of its outstanding shares. Diamond Hill Capital (Trades, Portfolio), Hotchkis & Wiley, Jim Simons (Trades, Portfolio)’ Renaissance Technologies, Paul Tudor Jones (Trades, Portfolio) and Third Avenue Management (Trades, Portfolio) also own the stock.
ODP
Einhorn shaved 2.44% off of its stake in ODP (ODP, Financial) to 1.65 million shares. Occupying 5.21% of the equity portfolio, it is his sixth-largest holding. GuruFocus data shows he has gained approximately 5.79% on the investment so far.
Headquartered in Boca Raton, Florida, the retailer of office supplies, which operates under the Office Depot and Office Max brands, has a market cap of $1.88 billion; its shares were trading around $46.87 on Monday with a price-earnings ratio of 14.03, a price-book ratio of 1.54 and a price-sales ratio of 0.26.
According to the GF Value Line, the stock is fairly valued currently.
The GF Score of 69 implies the company has poor performance potential. While ODP received a high momentum rank, the profitability and financial strength ratings were more moderate and the GF Value and growth were low.
With 3.60% of outstanding shares, Einhorn is ODP’s largest guru shareholder. Other top guru investors include Hotchkis & Wiley, Alan Fournier (Trades, Portfolio), Simons’ firm and Jones.
Capri Holdings
The guru curbed its position in Capri Holdings (CPRI, Financial) by 4.37% to 945,300 shares. As the seventh-largest holding, the stock makes up 3.76% of Einhorn’s equity portfolio. GuruFocus found he has lost around 0.22% on the investment to date.
The New York-based fashion house, which owns brands like Michael Kors, Versace and Jimmy Choo, has a $5.45 billion market cap; its shares were trading around $43.41 on Monday with a price-earnings ratio of 8.20, a price-book ratio of 2.45 and a price-sales ratio of 1.04.
Based on the GF Value Line, the stock appears to be modestly undervalued currently.
Further, the GF Score of 81 means Capri has good outperformance potential, driven by high ratings for three of the criteria. The growth and financial strength ranks, however, were more moderate.
PRIMECAP Management (Trades, Portfolio) has the largest stake in Capri with 2.80% of its outstanding shares. Steven Cohen (Trades, Portfolio), Andreas Halvorsen (Trades, Portfolio), Simons’ firm, Hotchkis & Wiley and several other gurus also have positions in the stock.
Graphic Packaging
Einhorn boosted his Graphic Packaging (GPK, Financial) holding by 22.28% in the most recent quarter to 1.06 million shares. Now representing 1.65% of the equity portfolio, GuruFocus says he has gained an estimated 22.28% on the investment.
The company headquartered in Atlanta, which manufactures paper-based packaging solutions for commercial products, has a market cap of $7.21 billion; its shares were trading around $23.47 on Monday with a price-earnings ratio of 13.97, a price-book ratio of 3.35 and a price-sales ratio of 0.77.
The GF Value Line suggests the stock is fairly valued currently.
The company has high outperformance potential with a GF Score of 91. It raked in high ratings for growth, profitability and momentum as well as more moderate financial strength and GF Value ranks.
Holding 0.67% of Graphic Packaging’s outstanding shares, Simons’ firm is the largest guru shareholder. The stock is also being held by Chuck Royce (Trades, Portfolio), Steven Scruggs (Trades, Portfolio), Ray Dalio (Trades, Portfolio)’s Bridgewater Associates, Jones, Jefferies Group (Trades, Portfolio) and Joel Greenblatt (Trades, Portfolio).
Victoria’s Secret
In the fourth quarter, the investor slashed his Victoria’s Secret (VSCO, Financial) investment by 39.96% to 411,071 shares. It accounts for 1.02% of the equity portfolio. GuruFocus estimates Einhorn has lost 28.42% on the investment since establishing it in the third quarter of 2021.
The Reynoldsburg, Ohio-based retail company, which is known for its lingerie, clothing and beauty products, has a $2.54 billion market cap; its shares were trading around $31.35 on Monday with a price-earnings ratio of 7.56, a price-book ratio of 10.82 and a price-sales ratio of 0.40.
Since its separation from parent company L Brands, which in now known as Bath & Body Works Inc. (BBWI, Financial), in August of 2021, the stock has tumbled around 26%.
The GF Score of 22 warns the company has poor future performance potential. Due to only receiving mediocre ratings for financial strength and profitability, however, the score does not fully reflect Victoria’s Secret’s full potential.
PRIMECAP is the largest guru shareholder of Victoria’s Secret with a 3.27% stake. Other gurus that own the stock are Cohen, Philippe Laffont (Trades, Portfolio), Royce, Keeley-Teton Advisors, LLC (Trades, Portfolio) and Greenblatt.
Funko
Einhorn established a 521,500-share position in Funko (FNKO, Financial) during the quarter, allocating 0.39% of the equity portfolio to it.
Headquartered in Everett, Washington, the toy company, which makes licensed pop culture collectibles like vinyl figurines and bobble heads, has a market cap of $365.30 million; its shares were trading around $7.74 on Monday with a price-book ratio of 0.99 and a price-sales ratio of 0.29.
According to the GF Value Line, the stock, while undervalued, is a possible value trap currently. As such, potential investors should do thorough research before making a decision.
With a GF Score of 70, the company has poor performance potential. Although it received a high growth rank, the ratings for profitability, financial strength and GF Value were more moderate. Further, the momentum grade was low.
Of the gurus invested in Funko, Einhorn has the largest holding with 1.11% of its outstanding shares. Hotchkis & Wiley and Simons’ firm also own the stock.
