Greenlight investor David Einhorn (Trades, Portfolio) stuck to one category in the second quarter, buying six stocks in the retail sector, he reported Tuesday.
Einhorn’s buys consisted of: Gap Inc. (GPS, Financial), Dollar General Corp. (DG, Financial), TJX Companies Inc. (TJX, Financial), AutoZone Inc. (AZO, Financial), Dollar Tree Inc. (DLTR, Financial) and Best Buy Co. Inc. (BBY, Financial). The holdings round out a concentrated portfolio of only 29 stocks valued around $3.14 billion.
The hedge fund manager who has struggled in recent years is returning a loss of 15.4% for the year through July, making 2018 on track to be his worst year since 2015. Einhorn’s firm lost 20.2% that year in its worst-ever annual performance.
Weighting down the portfolio were a short position in Tesla (TSLA) and a long bet on life insurer Brighthouse Financial (BHF). Yet the investor said he remained confident in his value investing approach:
“This has been a frustrating environment for us and for value investing style,” he said on a second-quarter conference call. “AllianceBernstein recently reported that value investing strategies are performing in the bottom percentile since 1990. Reality is that the market is cyclical and given the extreme anomaly, reversion to the meanship happens sooner rather than later, we just can’t say when."
While plunging into the retail sector, Einhorn discarded some other key positions. Notably, he slashed his stake in Apple by 77% and dropped seven retailers, including Urban Outfitters (URBN), Dillard’s Inc. (DDS) Tapestry Inc. (TPR). General Motors (GM), at 26.6% of his long portfolio, remained his top position after he trimmed it by 6.4%.
New buys
Einhorn purchased 134,000 shares of Gap Inc., giving it 0.14% portfolio weight. The stock’s share price averaged $31.
Gap Inc. has a market cap of $12.65 billion; its shares were traded around $32.66 with a P/E ratio of 14.84 and P/S ratio of 0.79. The trailing 12-month dividend yield of Gap Inc. stocks is 2.91%. The forward dividend yield of Gap Inc. stocks is 3.11%. Gap Inc. had an annual average earnings growth of 6.80% over the past 10 years.
Dollar General Corp. (DG, Financial)
Einhorn purchased 43,500 shares of Dollar General Corp., giving it 0.14% portfolio weight. The stock’s share price averaged $96.
Dollar General Corp. has a market cap of $28.04 billion; its shares were traded around $104.81 with a P/E ratio of 17.54 and P/S ratio of 1.17. The trailing 12-month dividend yield of Dollar General Corp. stocks is 1.06%. The forward dividend yield of Dollar General Corp. stocks is 1.13%. Dollar General Corp. had an annual average earnings growth of 16.60% over the past 10 years. GuruFocus rated Dollar General Corp. the business predictability rank of 4-star.
TJX Companies Inc. (TJX, Financial)
Einhorn purchased 45,000 shares of TJX Companies, giving it 0.14% portfolio weight. The stock’s second-quarter share price averaged $88.
TJX Companies Inc. has a market cap of $63.2 billion; its shares were traded around $101.09 with a P/E ratio of 23.22 and P/S ratio of 1.75. The trailing 12-month dividend yield of TJX Companies Inc. stocks is 1.33%. The forward dividend yield of TJX Companies Inc. stocks is 1.57%. TJX Companies Inc. had an annual average earnings growth of 15.10% over the past 10 years. GuruFocus rated TJX Companies Inc. the business predictability rank of 4-star.
AutoZone Inc. (AZO, Financial)
Einhorn purchased 6,000 shares of AutoZone Inc., giving it 0.13% portfolio weight. The stock’s second-quarter share price averaged $645.
AutoZone Inc has a market cap of $20.01 billion; its shares were traded around $756.81 with a P/E ratio of 22.38 and P/S ratio of 2.73. AutoZone Inc had an annual average earnings growth of 17.80% over the past 10 years. GuruFocus rated AutoZone Inc. the business predictability rank of 4-star.
Dollar Tree Inc. (DLTR, Financial)
Einhorn purchased 47,000 shares of Dollar Tree Inc., giving it 0.13% portfolio weight. The stock’s second-quarter share price averaged $92.
Dollar Tree Inc. has a market cap of $22.48 billion; its shares were traded around $94.53 with a P/E ratio of 13.43 and P/S ratio of 1. Dollar Tree Inc. had an annual average earnings growth of 20.60% over the past 10 years. GuruFocus rated Dollar Tree Inc. the business predictability rank of 4.5-star.
Best Buy Co. Inc. (BBY, Financial)
Einhorn purchased 51,600 shares of Best Buy Co. Inc., giving it 0.12% portfolio weight. The stock’s second-quarter share price averaged $74.
Best Buy Co. Inc. has a market cap of $21.94 billion; its shares were traded around $78.53 with a P/E ratio of 23.21 and P/S ratio of 0.54. The trailing 12-month dividend yield of Best Buy Co. Inc. stocks is 2.0%. The forward dividend yield of Best Buy Co. Inc. stocks is 2.34%. Best Buy Co. Inc. had an annual average earnings growth of 0.60% over the past 10 years.
See David Einhorn (Trades, Portfolio)'s portfolio here.
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