Earlier this week, Greenlight Capital leader David Einhorn (Trades, Portfolio) disclosed his first-quarter portfolio.
The activist investor’s New York-based firm, which strives 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. Einhorn is also known for his short positions, among the most famous of which is Tesla Inc. (TSLA).
For the three months ended March 31, Einhorn’s 13F filing shows he established eight new holdings, sold out of six stocks and added to or trimmed a number of other existing investments. His most notable trades included new positions in Black Knight Inc. (BKI, Financial), First Citizens BancShares Inc. (FCNCA, Financial) and New York Community Bancorp Inc. (NYCB, Financial) and increased bets on Consol Energy Inc. (CEIX, Financial) and Tenet Healthcare Corp. (THC, Financial).
Investors should be aware 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.
Black Knight
Einhorn invested in 924,740 shares of Black Knight (BKI, Financial), allocating 2.89% of the equity portfolio to the position. The stock traded for an average price of $59.84 per share during the quarter.
Black Knight is now his 10th-largest holding.
The Jacksonville, Florida-based company, which provides software, data and analytics solutions to the mortgage, consumer loan, real estate and capital markets industries, has an $8.74 billion market cap; its shares were trading around $55.78 on Friday with a price-earnings ratio of 37.93, a price-book ratio of 3.21 and a price-sales ratio of 5.59.
The GF Value Line suggests the stock is significantly undervalued currently based on its historical ratios, past financial performance and analysts’ future earnings projections.
At 72 out of 100, the GF Score indicates the company is likely to have average performance going forward. While it received highs rating for value, profitability and growth, the financial strength rank was more moderate and momentum was low.
Of the gurus invested in Black Knight, Einhorn now has the largest holding with 0.59% of its outstanding shares. Jeremy Grantham (Trades, Portfolio), Wallace Weitz (Trades, Portfolio), Jim Simons (Trades, Portfolio)’ Renaissance Technologies, Ray Dalio (Trades, Portfolio)’s Bridgewater Associates and several other gurus also own the stock.
First Citizens BancShares
The guru picked up 22,550 shares of First Citizens BancShares (FCNCA, Financial), dedicating 1.19% of the equity portfolio to the holding. Shares traded for an average price of $742.71 each during the quarter.
The bank holding company headquartered in Raleigh, North Carolina has a market cap of $18.85 billion; its shares were trading around $1,305.46 on Friday with a price-earnings ratio of 1.85, a price-book ratio of 1.03 and a price-sales ratio of 4.14.
According to the GF Value Line, the stock is fairly valued currently.
The GF Score of 76 implies the company is likely to average future performance on the back of a high growth rank, middling marks for profitability, value and momentum and a low financial strength rating.
With 1.29% of its outstanding shares, Hotchkis & Wiley is the company’s largest guru shareholder. Other top guru investors are Philippe Laffont (Trades, Portfolio), Chuck Royce (Trades, Portfolio), Steven Cohen (Trades, Portfolio) and Joel Greenblatt (Trades, Portfolio).
New York Community Bancorp
The investor entered a 2.28 million-share stake in New York Community Bancorp (NYCB, Financial), giving it 1.12% space in the equity portfolio. The stock traded for an average per-share price of $9.02 during the quarter.
The Hicksville, New York-based bank holding company has a $7.84 billion market cap; its shares were trading around $10.85 on Friday with a price-earnings ratio of 2.85, a price-book ratio of 0.76 and a price-sales ratio of 3.33.
Based on the GF Value Line, the stock appears to be modestly undervalued currently.
The GF Score of 67 means the company has poor performance potential, driven by a high value rank, middling marks for profitability and momentum and low growth and financial strength ratings.
Kahn Brothers (Trades, Portfolio) is New York Community’s largest guru shareholder with a 0.88% stake. The stock is also being held by Hotchkis & Wiley, Michael Burry (Trades, Portfolio), Royce, Mario Gabelli (Trades, Portfolio), John Hussman (Trades, Portfolio) and Jefferies Group (Trades, Portfolio).
Consol Energy
Einhorn upped his stake in Consol Energy (CEIX, Financial) by 49.88%, buying 904,190 shares. The transaction had an impact of 2.86% on the equity portfolio. During the quarter, the stock traded for an average price of $56.99 per share.
He now holds 2.72 million shares in total, which occupy 8.60% of the equity portfolio as his second-largest position. GuruFocus estimates he has gained 61.62% on the investment.
The coal producer, which is headquartered in Canonsburg, Pennsylvania, has a market cap of $1.95 billion; its shares were trading around $57.48 on Friday with a price-earnings ratio of 2.91, a price-book ratio of 1.52 and a price-sales ratio of 0.85.
The GF Value Line suggests the stock is significantly overvalued currently.
The company has poor performance potential based on its GF Score of 59. Although it raked in high ratings for financial strength and momentum, profitability was more moderate and the value rank was low.
Despite the reduction, Einhorn remains Consol’s largest guru shareholder with an 8.01% stake. Azvalor Internacional FI (Trades, Portfolio), Cohen, Greenblatt, Simons’ firm and Royce, among others, also have positions in the stock.
Tenet Healthcare
The guru boosted the Tenet Healthcare (THC, Financial) stake by 116.57%, buying 768,070 shares. The transaction impacted the equity portfolio by 2.48%. Shares traded for an average price of $55.58 each during the quarter.
Einhorn now holds 1.42 million shares, which reflect his sixth-largest position with a weight of 4.61%. GuruFocus says he has gained an estimated 42.14% on the investment so far.
The Dallas-based company, which operates hospitals and other health care facilities, has a $7.43 billion market cap; its shares were trading around $72.88 on Friday with a price-earnings ratio of 19.43, a price-book ratio of 6.11 and a price-sales ratio of 0.40.
According to the GF Value Line, the stock is modestly overvalued currently.
Despite being supported by a high momentum rank, middling marks for profitability and growth and low financial strength and value ratings, the GF Score of 68. As such, it has poor performance potential.
Holding a 7.13% stake, Larry Robbins (Trades, Portfolio) is Tenet’s largest guru shareholder. The stock is also being held by Cohen, First Eagle Investment (Trades, Portfolio), Dalio’s firm and several other gurus.
Additional trades and portfolio composition
During the quarter, Einhorn also sold out of Victoria’s Secret & Co. (VSCO, Financial), curbed his position in Resideo Technologies Inc. (REZI, Financial) and added to his holdings of Capri Holdings Ltd. (CPRI, Financial), Concentrix Corp. (CNXC, Financial) and Global Payments Inc. (GPN, Financial).
The guru’s $1.84 billion equity portfolio, which is composed of 39 stocks, is most heavily invested in the consumer cyclical sector with a weight of 40.29%.
According to GuruFocus, Greenlight Capital posted a return on 25.30% in 2022, significantly outperforming the S&P 500’s -18.11% return.
