In this article we discuss 5 best stocks in David Einhorn’s Q1 portfolio. If you want to read our detailed analysis of Einhorn’s history and hedge fund performance, go directly to the 10 Best Stocks to Buy According to David Einhorn’s Greenlight Capital.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best hydrogen fuel cell stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind, let’s take a look at Einhorn’s top stock picks:
5. Danimer Scientific, Inc. (NYSE: DNMR)
Einhorn’s Stake Value: $692,000
Percent of David Einhorn’s 13F Portfolio: 0.04%
Number of Hedge Fund Holders: 30
Danimer Scientific, Inc. (NYSE: DNMR) is a company that manufactures biodegradable plastic material. The company is currently considered one of the best stocks because its market niche aligns with environmental conservation and anti-pollution measures. It is placed fifth on our list of 10 best stocks to buy according to David Einhorn’s Greenlight Capital.
Danimer Scientific plans to invest as much as $700 million to expand its manufacturing operations at Bainbridge. The expanded facility will boost the number of available jobs by four times at Decatur County. The company currently has 100 employees at its facility in West Virginia. Danimer Scientific, Inc. (NYSE: DNMR) hopes for a future where its biodegradable plastics will be used on products sold at retail outlets.
Nelson Capital Management, in its Q1 2021 investor letter, mentioned (NYSE: DNMR). Here is what Nelson Capital Management has to say about Danimer Scientific, Inc. in its letter:
“In the materials sector, we bought Danimer Scientific (tkr: DNMR), a next-generation bioplastics company offering completely biodegradable plastics that break down in virtually any environment.
While essential to modern life, plastic products are an ongoing environmental concern due to their longevity and therefore the pollution that results. Despite nationwide efforts to recycle plastics, only 8.5% of plastics waste in t he U .S. is being recycled, according to a study by the U.S. Environmental Protection Agency. Danimer Scientific (t k r: DNMR) has developed a method to make plastic products that are 100% biodegradable and compostable without compromising on functionality. The company sells its PHA- based plastics under the brand name Nodax and is currently the only viable commercial-scale offering.
Danimer uses canola oil to create 100% biodegradable and compostable biopolymer, PHA, through a completely waste-free process. PH A biodegrades in both anaerobic (without oxygen) a nd aerobic (with oxygen) environments, and unlike other biodegradable plastics, it does not need heat, moisture, or an industrial composting plant to break d own. PHA-based plastics can effectively biodegrade in a waste treatment facility, the ocean, or even in home compost piles within 12-18 weeks after the product is discarded.
PHA plastics are versatile, adaptable and heat and UV-resistant. They have been FDA approved for food contact and are comparable in functionality to many products produced using petrochemicals. The formula can be customized to create many types of plastic resins for a multitude of p u r poses. The range of applications for products made wit h PH A is enormous and includes straws, cups, lids, bottles, produce bags, shopping bags, utensils, diaper linings, plates, wipes, toys, trash bags, seals, labels, glues and much more.
Danimer went public in late 2020 via Special Purpose Acquisition Company (SPAC). As a newly public company, Danimer’s stock price tends to be rather volatile, but we bought a small position for the long-term opportunities it offers. Dem and for PHA plastics is likely to accelerate over the next several years as corporations and the public become increasingly concerned about the environmental impact of wrappers from consumer- packaged goods. More government regulation of single- use plastics has pressured large corporations to adapt. Additionally, the Biden administration has a strong emphasis on climate change and sustainability which will provide a near- to-mid-term tailwind for Danimer. As the leading PHA innovator with over 125 patents across 20 countries, Danimer is well-positioned to benefit from these trends.”
