In this article, we will discuss David Einhorn’s stock portfolio: top 10 stocks to buy.
Will the stock market rally persist heading into the year-end?
Major indices are at record highs, making it hard to predict market direction despite the Federal Reserve’s policy tweaks. Investors have pushed equities higher amid AI excitement and expected rate cuts, but momentum is waning.
Recent market swings are driven by Middle East tensions, with the S&P 500 down 1.1% in October after a 2% rise in September. Geopolitical risks and potential conflicts, like Israel and Iran, add uncertainty, pushing investors towards safe havens like gold and bonds.
READ ALSO: 7 Best Nanotech Penny Stocks to Buy and 7 Dirt Cheap Stocks to Invest In Now.
S&P Global’s Daniel Bergin warns of a dangerous economic period, comparing it to the 1962 Cuban Missile Crisis:
“The betting is that the Israelis would not attack, try to attack, the nuclear facilities at this time. But a few months from now, a few weeks from now, whatever it is, Iran would have the capacity — its thought — to deliver a nuclear weapon, and that raises the stakes.”
The Fed and Chinese authorities are cutting rates to support their economies. Alexander Cousley from Russell Investments notes:
“We haven’t moved into this world where fiscal has become the dominant driver, and so that’s what we’re really looking for… we are still in this period where Chinese authorities respond to weakening data, and the thing starts to improve a little bit, and we don’t see the actual follow through.”
David Einhorn’s Market Concerns and Investment Strategy
Economic growth uncertainty in two of the world’s largest economies should be a point of concern for investors eyeing opportunities in the equity markets. David Einhorn, the legendary investor behind Greenlight Capital, was the first to raise concerns about valuations in the market early in the year.
In a letter to investors, the hedge fund manager reiterated that the stock market was fundamentally broken as investment capital did not care about valuation:
“The result is that a very small portion of trading volume today is based on strategies that try to identify which stocks are undervalued in order to buy them for an intermediate or a long-term investment period, with a view that the shares will outperform as they close the discount to fair value,” states the April ’24 letter.
David Einhorn launched Greenlight Capital at 27 with $900,000 from family and friends. He gained prominence by short-selling Allied Capital in 2002, a move validated by the SEC years later. During the Great Recession, he shorted Lehman Brothers in 2007.
Known for value investing, Einhorn now questions its viability due to market changes and the rise of passive investing. Earlier this year, he expressed concerns that value investing might be obsolete due to a broken market structure and the increasing dominance of passive investing.
This shift in market structure has led Einhorn to change his investing philosophy. Now, he focuses on companies that look cheap in value and return capital to shareholders through repurchases or dividends.
Despite changing his strategy, Einhorn has generated strong long-term returns. Greenlight has averaged annual returns of 13.1% since its launch in 1996, compared to 9.5% for the broader benchmark S&P 500. That equates to a total return of over 2,900% compared to the S&P 500’s 1,117%.
Einhorn’s solid returns over the years have come to haunt, as former Greenlight Capital analyst James Fishback sued Greenlight Capital over claims he was underpaid. In a filing to the American Arbitration Association, Fishback alleges that he was underpaid over the years he worked at the hedge fund and wants the arbitrator to award him $5 million.
Since departing to establish his own company, Fishback has consistently frustrated Einhorn, publicly debating his ex-employer on Twitter regarding his stance on Tesla’s stock and provoking him with comments about his recent achievements.
Nevertheless, Greenlight Capital lost 1.7 per cent in August, a generally volatile but positive month for the broad market. The loss cut its gain for the year to 9.1 per cent. It is not clear which investments drove last month’s loss.
Amid the mixed results, David Einhorn’s stock portfolio could offer some reprieve as it contains some stocks trading at highly discounted levels. According to Einhorn’s Greenlight Capital, undervalued stocks tend to underperform for extended periods to the extent of becoming extremely cheap.
Similarly, such stocks are well-positioned to bounce back and rally when investors note how undervalued they are, especially when other counterparts are trading at premium valuations.
Our Methodology
To compile the list of the David Einhorn Stock Portfolio: Top 10 Stocks to Buy we examined Greenlight Capital’s 13F portfolio, as of Q2 2024. The stocks are ranked in ascending order based on Greenlight Capital’s stakes in them.
At Insider Monkey, we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
David Einhorn Stock Portfolio: Top 10 Stocks to Buy
10. Viatris Inc. (NASDAQ:VTRS)
Greenlight Capital’s Equity Stake: $78.66 Million
Number of Hedge Fund Holders: 45
Viatris Inc. (NASDAQ:VTRS) is one of David Einhorn’s top 10 stocks to buy for diversifying an investment portfolio in the healthcare sector. The company sells its pharmaceuticals in 165 countries, and a large portion of its operations revolve around generic medications.
Einhorn invested in Viatris on growing optimism that generic drug pricing pressures have stabilized and that the company’s revenue and cash flow are growing at a solid rate. Likewise, newly appointed leadership at VTRS has streamlined its drug offerings through a series of sales and has pledged to allocate 50% of its free cash flow to investors through “bold” share repurchases, suggesting a potential capital return in the double-digit range based on our projections.
Viatris Inc. (NASDAQ:VTRS) has more than 250 products in development or regulatory review, including sophisticated generics and therapies for conditions with few other options. It stands out for its ability to maximize its product portfolio and generate value through its robust drug pipeline.
Viatris Inc. (NASDAQ:VTRS) met Wall Street expectations despite reporting Q2 revenue of almost $3.8 billion, a 3% year-over-year decline. It also posted adjusted earnings per share of $0.69, exceeding the average analyst estimate of $0.68 and up 3% year over year. Additionally, Viatris increased its forecast for new product revenue for the entire year. The initial estimate of $450 million to $550 million has been raised to a range of $500 million to $800 million.
It is one of the best investments for passive income as it offers a 3.9% dividend yield that is significantly higher than the S&P 500 average of 1.4%. Consequently, it is a solid play for income-focused investors.
Viatris Inc. (NASDAQ:VTRS) spends roughly $580 million a year on dividend payments. This implies that its dividend is sustainable at the moment. The fact that the stock is trading at 4 times its forward earnings underscores how undervalued it backed by solid fundamentals.
Besides, 45 hedge funds held a stake in the company as of Q2 2024, according to Insider Monkey’s database, down from 50 in the preceding quarter.
Greenlight Capital stated the following regarding Viatris Inc. (NASDAQ:VTRS) in its fourth quarter 2023 investor letter:
We established medium-sized positions in Alight (ALIT) and Viatris Inc. (NASDAQ:VTRS), and a small position in Syensqo (Belgium: SYENS). VTRS is a manufacturer of generic and off-patent branded drugs. The company was created in 2020 after a merger between Mylan and a division of Pfizer. We previously invested in Mylan, but sold five years ago due to concerns around management’s ability to deliver on promises, as well as deterioration in the generic industry. Those concerns were well-founded, as the shares proceeded to decline by more than 60% after we exited. After a recent management change, we decided to take another look and found that after years of sharp declines, generic drug pricing has stabilized and competition has been diminished. The company’s revenue and cash flow are now growing, and we expect this improvement to accelerate. VTRS’ new management team has simplified its drug portfolio via various divestitures and has committed to returning 50% of free cash flow to shareholders through “aggressive” share buybacks, implying a double-digit capital return based on our estimates. We acquired our shares at an average price of $10.63, or just 4.0x 2024 consensus earnings. VTRS shares ended the quarter at $10.83.”
9. Tenet Healthcare Corporation (NYSE:THC)
Greenlight Capital’s Equity Stake: $79.51 Million
Number of Hedge Fund Holders: 64
Tenet Healthcare Corporation (NYSE:THC) is a diversified healthcare services company whose general hospitals offer acute care services and operating and recovery rooms. The company has been pursuing strategic initiatives aimed at strengthening its growth metrics.
Tenet Healthcare remains focused on strategic capital allocation for ambulatory surgery centers as it also invests in AI technologies. It is also expanding its services into high-demand areas. The investment underscores the company’s focus on long-term growth.
Tenet Healthcare Corporation (NYSE:THC) ‘s impressive inpatient volume performance has been a major factor in its recent success. Inpatient volumes are predicted to stay above historical levels for up to five years as the ageing population increases.
The healthcare services company is increasingly establishing alliances and purchasing companies to increase its market presence and grow its outpatient care facilities to satisfy the rising demand for outpatient services. It has also expanded its telehealth services in response to rising demand for virtual care as part of its growth strategy.
Tenet Healthcare Corporation (NYSE:THC) focuses on strategic capital allocation for ambulatory surgery centres as it invests in AI technologies. It is also expanding its services into high-demand areas. The investment underscores the company’s focus on long-term growth.
Expansion and enhanced operational efficiency were the catalysts behind the company delivering stellar second-quarter results. Tenet’s adjusted EBITDA increased to $945 million, exceeding expectations, and the company’s net operating revenues increased by 12% year over year to $5.1 billion. Tenet Healthcare Corporation (NYSE:THC) approved a $1.5 billion share repurchase program and increased its 2024 EBITDA guidance by $300 million.
As of Q2 2024, the company’s revenue for the previous 12 months stood at $20.91 billion, indicating a strong growth rate of 5.05%. Additionally, Tenet’s stock has seen a significant 6-month price total return of 57.11%, affirming why it is one of David Einhorn’s top stocks.
As of June 2024, 64 among the 912 hedge funds tracked by Insider Monkey were the firm’s investors. Tenet Healthcare Corporation (NYSE:THC)’s biggest hedge fund investor in Q2 was Larry Robbins’ Glenview Capital due to its $620.68 million stake.
Here is what Meridian Contrarian Fund said about Tenet Healthcare Corporation (NYSE:THC) in its Q2 2024 investor letter:
“Tenet Healthcare Corporation (NYSE:THC) is a top-ten U.S. operator of hospitals, outpatient surgery centers, and healthcare business process services. We initiated our position in late 2022 on the belief that the market’s short-term focus on COVID-caused staffing and admissions challenges overshadowed the value of Tenet’s long-term strategy of growing outpatient surgery centers. Tenet accelerated the transition of its business this year toward high-margin and higher return-on-capital surgery centers by divesting hospitals. The market rewarded the shift with a 26% return in the period. Tenet remains a top five holding with growth driven by surgery centers and a continued attractive valuation.”
8. Alight, Inc. (NYSE:ALIT)
Greenlight Capital’s Equity Stake: $81.73 Million
Number of Hedge Fund Holders: 42
Alight, Inc. (NYSE:ALIT) is a technology company that provides cloud-based integrated digital human capital and business solutions worldwide. Its emphasis on offering cutting-edge technological solutions for human capital management (HCM) is a major contributor to its success.
Alight, Inc. (NYSE:ALIT) has distinguished itself in the market by utilizing artificial intelligence and machine learning to make HR and financial tasks easier. Through AI, Alight examines extensive data sets, enabling companies to predict patterns and spot possible problems before they grow bigger, therefore making it a solid AI investment play.
The company has been investing in improving its cloud-based services, which include workforce management, payroll, and benefits administration. By drawing in new customers and keeping hold of current ones, it has positioned itself as a market leader in the quickly changing HR technology sector. Additionally, it is in a strong position to profit from the expanding trend of companies trying to enhance employee experiences and streamline HR operations.
Alight, Inc. (NYSE:ALIT) delivered mixed second-quarter results, with revenues dropping 4.1% to $538 million, down from $561 million the year before. This drop was caused by reduced sales, lower net business activity, a decrease in project income in our Employer Solutions division, and the winding down of our Hosted business activities.
Nevertheless, the company is inching closer to profitability, its net loss having shrunk to $0.01 in the quarter from $0.14 a share delivered the same quarter last year. The company also returns value to shareholders, having bought $80 million worth of stock in the quarter.
Alight, Inc. (NYSE:ALIT)’s sales of its payroll and professional services division have improved its financial position on its gross margins by 350 basis points to more than 40% and elevating adjusted EBITDA margins from 21.7% to 25%. Additionally, the company finished its two-year transition to cloud technology, which is anticipated to yield $75 million in yearly cost savings from operations, aiding in the growth of margins.
The stock remains attractively priced while trading at a price-to-earnings multiple of 11. Insider Monkey’s Q2 2024 data revealed that the company was held by 42 hedge funds.
Meridian Growth Fund stated the following regarding Alight, Inc. (NYSE:ALIT) in its Q2 2024 investor letter:
“Alight, Inc. (NYSE:ALIT) is a leading cloud-based human capital technology provider of enterprise-level software that helps businesses and their employees manage critical human resources functions. Through its investments in software and automation, Alight has built a distinct advantage that allows its customers to deliver HR services at a much lower cost while providing a better experience for employees.
We slightly trimmed the position early in the quarter when the stock appreciated on the announced sale of a non-strategic business unit and news that an activist investor had initiated a position. Later in the period, the stock declined when Alight announced weaker-than-expected results. We believe the softer quarter will prove to be an isolated event.”
7. The ODP Corporation (NASDAQ:ODP)
Greenlight Capital’s Equity Stake: $87.28 Million
Number of Hedge Fund Holders: 26
The ODP Corporation (NASDAQ:ODP) is a consumer cyclical investment play and one of David Einhorn’s top stocks to buy as the Federal Reserve cuts interest rates to boost liquidity levels in the economy. The company has carved a niche in providing business services, supplies, products, and digital workplace technology solutions.
While the company has seen its results impacted by the prevailing economic challenges characterized by high interest and reduced liquidity, it is actively working on various projects to achieve higher revenue growth by the end of 2024. Its primary aim is strategically shifting its growth direction within its main operations.
The ODP Corporation (NASDAQ:ODP) is pushing to transform its business model and emphasize artificial intelligence processes throughout the company to drive future expansion and enhance investment chances. One notable project is Project Core, aimed at refining the company’s focus on its core activities and improving operational efficiency.
A challenging business environment characterized by high interest rates was one of the catalysts behind the company posting a 10% decline in sales in Q2 to $1.7 billion. Adjusted net income from continuing operations of $20 million, or adjusted diluted earnings per share from continuing operations of $0.56, versus $48 million or $1.22, respectively, in the prior year period.
Performance in the quarter was below expectations, impacted by more cautious business spending and weaker consumer activity. Nevertheless, it is already looking into the future, having rolled out the Power of 1 strategy to propel expansion. This strategy aims to enhance customer satisfaction by providing an additional product or collection of products designed to assist them in achieving success.
Likewise, The ODP Corporation (NASDAQ:ODP) remains in a solid financial position with about $831 million in total available liquidity, which affirms why it continues to return value through buybacks. It repurchased 2.4 million shares in the quarter for $104 million.
According to Insider Monkey data on 912 hedge funds, 26 hedge funds held shares of The ODP Corporation (NYSE:ODP), valued at $190.80 million, as of Q2 2024. Greenlight Capital held 2.22 million company shares, 30% more than the previous quarter and valued at $87.28 million. It accounted for 4.26% of the firm’s 13F portfolio.
Here is what Greenlight Capital said about The ODP Corporation (NASDAQ:ODP) in its Q2 2024 investor letter:
“However, it wasn’t all roses. We had three material losers in the long portfolio (and an undisclosed loser in the short portfolio), and deservedly so. The ODP Corporation (NASDAQ:ODP) declined from $53.05 to $39.27. The quarterly results were disappointing with business-to-business sales declining 8% and adjusted operating profit cut in half. On the positive side, ODP finally announced that it intends to sell or exit Varis, its money-losing procurement and technology services platform, and as a result upgraded its earnings guidance. The company also replaced its Chairman who retired.”
6. PENN Entertainment, Inc. (NASDAQ:PENN)
Greenlight Capital’s Equity Stake: $98.62 Million
Number of Hedge Fund Holders: 30
PENN Entertainment Inc (NASDAQ:PENN) is a consumer cyclical company that provides integrated entertainment, sports content, and casino gaming experiences. It’s one of the companies whose core business came under pressure on reduced consumer purchasing due to high interest rates.
Einhorn invested in PENN Entertainment amid investor scepticism following Penn’s challenging acquisition of Barstool Sports. At the time, he reiterated the potential of sports betting and insisted that if Penn had executed it correctly, it could have significantly boosted the company’s shares.
Nevertheless, it announced a solid second quarter in 2024, achieving an EBITDAR figure of $367 million, which exceeded the average forecasts by 8%. This achievement was fueled by superior-than-anticipated online outcomes, and the physical casino division achieved the anticipated revenue and EBITDAR figures from analysts.
PENN Entertainment Inc (NASDAQ:PENN)’s retail locations achieved strong outcomes in the latest quarter, thanks to an elite group of managers who consistently perform well across a wide range of top-tier properties. The success of ESPN Bet, the online sports betting site, has been a key growth area for PENN Entertainment. Although the site experienced a drop in its portion of the market during the second quarter of 2024, it was able to boost its profit margins in games and maintain its position in the market over the course of each quarter.
Encouraging developments for ESPN Bet include sustained gaming profit margins above 8% in the second quarter of 2024 and an enhanced selection of parlay options. These elements indicate that the platform is advancing in both operational effectiveness and the variety of its services.
PENN Entertainment Inc (NASDAQ:PENN) is investing significantly in its future expansion, with four retail expansion projects in progress. These investments and ongoing enhancements to its digital platforms are paving the way for potential expansion beginning in 2026.
Using the strong reputation of ESPN, ESPN Bet has a great chance to enhance PENN’s standing in the digital sports betting industry. In return, the company should generate significant shareholder value down the line.
As of the end of the second quarter of 2024, 30 hedge funds tracked by Insider Monkey had stakes in PENN Entertainment Inc. (NASDAQ:PENN).
Greenlight Capital stated the following regarding PENN Entertainment, Inc. (NASDAQ:PENN) in its first quarter 2024 investor letter:
“We established a new medium-sized position in PENN Entertainment, Inc. (NASDAQ:PENN) at an average price of $22.69 per share, but, for reasons discussed below, the shares fell to $18.21 by quarter-end. s referenced above, we established a medium-sized position in PENN, an operator of regional casinos. PENN’s current enterprise value is just over $4.3 billion, and based on an 8-12x multiple of free cash flow, we value their land-based casinos between $4.3 billion and $7 billion. PENN also competes in online gaming, particularly sports betting, and we believe the market ascribes a substantial negative value to that effort. To be fair, the online segment has a checkered history. In 2020, PENN acquired a minority stake of Barstool Sports, and three years later agreed to purchase the rest, for a grand total of $551 million. That acquisition was a complete failure, and the company wound up abandoning the investment. It also spent $2 billion in 2021 to acquire Score Media and Gaming to establish a better online sports betting platform. Last year, it entered into a deal with ESPN to launch and operate ESPN BET.
Successful sports betting franchises can have substantial value. DraftKings is the leader and is valued at over $20 billion. Through ESPN BET, PENN aspires to achieve top-three status in the industry. Given that the market is ascribing negative value to ESPN BET, it’s fair to say that after the Barstool fiasco, investors have serious doubts about the company’s strategy and management’s competence to execute. Were the market to credit PENN with merely 15% of DraftKings’ value, that segment alone would be worth $20 per share.
PENN launched ESPN BET last November. The launch was largely successful and led them to achieve a top-three user share by adding one million customers in less than two months. This result was much better than expected and enabled PENN to project turning a profit a year earlier than its previous guidance. To accomplish this, the company spent more on upfront marketing to acquire customers than it had indicated. Though we had believed the rationale for increased spending was well understood, the market focused on the higher spend and punished the shares.”
5. Kyndryl Holdings Inc. (NYSE:KD)
Greenlight Capital’s Equity Stake: $116.71 Million
Number of Hedge Fund Holders: 36
Kyndryl Holdings, Inc. (NYSE:KD) is a technology and IT infrastructure services provider offering cloud services, core enterprise, and cloud services. The company has started leveraging GenAI technologies to improve results for clients in the travel, healthcare, and manufacturing sectors.
Einhorn invested in Kyndryl on optimism that the company was well positioned to move on from the ‘bad business’ thesis when it was tied to IBM. The billionaire investor is optimistic about the company’s turnaround strategy as it moves to offer solutions from multiple vendors. Pricing and margins should be raised as contracts expire, generating more value.
Kyndryl Holdings, Inc. (NYSE:KD) leverages the surge in artificial intelligence (AI) by offering advisory services and technical assistance to large businesses aiming to utilize AI technologies effectively. Its offerings are bolstered by extensive operational data and its proprietary machine-learning capabilities.
Following its breakaway from IBM, Kyndryl Holdings, Inc. (NYSE:KD) has been transforming to embrace a new phase in information technology, and this is wider than a frustrating shift from aligning its fiscal year with the calendar year to one that ends in March.
It’s been selling off unprofitable ventures as it guides its clients towards a mixed cloud approach. Simultaneously, Kyndryl Holdings, Inc. (NYSE:KD) is releasing contracts with low-profit margins acquired during its spin-off from IBM. Consequently, profit margins are expected to increase as the company’s revenue enters a period of steady growth in the upcoming years.
By the first quarter of fiscal 2025, the company’s earnings totalled $3.74 billion, showing a 10.83% drop compared to the previous year. The earnings per share amounted to $0.13. The drop in earnings was mainly due to the deliberate withdrawal from hostile and low-profit business areas within existing customer relationships.
36 hedge funds are long in Kyndryl Holdings Inc. (NYSE:KD) right now, with the largest stake at $116.71 million, held by Greenlight Capital.
Greenlight Capital stated the following regarding Kyndryl Holdings, Inc. (NYSE:KD) in its Q2 2024 investor letter:
“In addition to gold, we had four material winners in our long portfolio this quarter. Kyndryl Holdings, Inc. (NYSE:KD) rose from $21.76 to $26.31. The company had another good report, with results and guidance exceeding expectations on all key metrics. KD also pulled forward its target to achieve constant currency revenue growth, now starting in the fourth quarter of the current fiscal year.”
4. HP Inc (NYSE:HPQ)
Greenlight Capital’s Equity Stake: $118.12 Million
Number of Hedge Fund Holders: 41
HP Inc. (NYSE:HPQ) is a technology company that provides personal computing and other digital access devices, imaging and printing products, and related technologies, solutions, and services worldwide. Einhorn’s investment in HP comes on growing optimism that the company will benefit from growing PC demand amid the artificial intelligence frenzy
“The industry appears to be in the early stages of an up cycle, perhaps to be enhanced by recently launched AI-enabled PCs that are expected to ramp up over the next several quarters,” Greenlight Capital explained.
In the realm of artificial intelligence, the firm claims to have the biggest selection of AI PCs available. Expectations are high that robust demand for AI-powered PCs will boost sales demand, allowing the company to generate more shareholder value.
With PC demand recovering, HP Inc. (NYSE:HPQ) ‘s stock might continue to rise. At the very least, an increase in demand should support its profitability as it strives to reinvest profits into shareholders and improve its financial health.
The company is already benefiting from strong PC demand, having delivered its first increase in revenue growth in nine quarters in the third quarter, with earnings climbing by 2% compared to the previous year. Revenue and earnings growth has sparked optimism about long-term prospects. This expectation is firm given HP Inc. (NYSE:HPQ) ‘s leading position in the AI PC segment, with its advanced AI PCs gaining popularity among professionals in knowledge and data science fields.
During the third quarter, HP Inc. (NYSE:HPQ) expanded its AI capabilities even more by being the first technology company to incorporate generative AI into its workstation solutions. HP remains focused more on enhancing its newer PC models’ mobility and AI capabilities. In July, the company launched its top-tier model, equipped with the latest AMD processor, which has been recognized as the industry’s most advanced AI PC
While trading at a price-to-earnings multiple of 10, HP’s dividend payout has increased to 3.07%, and it’s also distributing a significant amount of money back to its investors by buying back shares. During the third quarter, the company repurchased nearly $0.9 billion of shares, with $600 million going towards share buybacks and $268 million allocated for dividends. Its ability to return value through dividends and buybacks underscores why it is one of David Einhorn’s top stocks to buy.
A total of 41 hedge funds were long HP Inc. (NYSE:HPQ) in the second quarter, with a total stake value of $655 million.
Greenlight Capital stated the following regarding HP Inc. (NYSE:HPQ) in its Q2 2024 investor letter:
“In addition to gold, we had four material winners in our long portfolio this quarter. HP Inc. (NYSE:HPQ) jumped from $30.22 to $35.02. After seven quarters of declines, PC sales turned marginally positive during the quarter. The industry appears to be in the early stages of an upcycle, perhaps to be enhanced by recently launched AI-enabled PCs that are expected to ramp up over the next several quarters.”
3. Brighthouse Financial, Inc. (NASDAQ:BHF)
Greenlight Capital’s Equity Stake: $128.85 Million
Number of Hedge Fund Holders: 35
Brighthouse Financial, Inc. (NASDAQ:BHF) is a financial services company that provides annuity and life insurance products. It ranks among the top suppliers of life insurance offerings across the United States. With its wide-ranging and attractive range of life insurance offerings, the company is poised to gain from the increasing demand for individual insurance policies.
Additionally it remains one of the largest holdings in Greenlight Capital, as David Einhorn believes the insurer is dirt cheap considering its underlying fundamentals. The billionaire investor also believes the markets have undervalued this company because of complicated GAAP principles.
The insurance company continues to concentrate on boosting the sales of life insurance offerings and broadening its distribution channels to establish itself as a leading figure in the market. Brighthouse Financial, Inc. (NASDAQ:BHF) has concentrated on expanding its range of products with the introduction of Shield Level Pay Plus, which joins the collection of Shield Annuities.
The strong sales of Shield Level Annuities and increased fixed indexed annuities from the company’s newly introduced SecureKey product have contributed to Annuity sales growth.
Likewise, the company stands to gain from the expanding individual insurance market. The company is dedicated to increasing the sales of life insurance products, enhancing annuity offerings, and broadening its distribution channels to establish itself as a leading figure in the sector.
Brighthouse Financial, Inc. (NASDAQ:BHF) reported quarterly earnings of $5.57 per share, surpassing the forecast of $4.36 per share. This stands in contrast to profits of $4.13 per share in the previous year. The company’s total operating revenue rose by 2.6% annually, fueled by increased net investment income and other sources of income.
Over the last few quarters, there has been a noticeable upward trend in net investment income. Leveraging alternative investment income, asset growth, and higher interest rates, the insurer anticipates this metric will continue improving in the coming years. The stock trades at a discount with a price-to-earnings multiple of 2.
As of this year’s June quarter, 35 out of the 912 hedge funds profiled by Insider Monkey had invested in Brighthouse Financial, Inc. (NASDAQ:BHF). David Einhorn’s Greenlight Capital owns the most significant stake, which is worth $128.85 million.
Here is what Greenlight Capital stated the following regarding Brighthouse Financial, Inc. (NASDAQ:BHF) in its Q2 2024 investor letter:
“However, it wasn’t all roses. We had three material losers in the long portfolio (and an undisclosed loser in the short portfolio), and deservedly so. Brighthouse Financial, Inc. (NASDAQ:BHF) fell from $51.54 to $43.34. In successive quarters, BHF announced large, non-recurring and unexpected losses. This time, the company suffered a loss in a reinsurance arbitration that cost several hundred million dollars.”
2. CONSOL Energy Inc. (NYSE:CEIX)
Greenlight Capital’s Equity Stake: $167.41 Million
Number of Hedge Fund Holders: 30
CONSOL Energy Inc. (NYSE:CEIX) is an energy company that produces and sells bituminous coal. Its PAMC segment engages in the mining, preparing, and marketing bituminous coal to power generators, industrial end-users, and metallurgical end-users.
It remains one of the biggest holdings in Einhorn’s portfolio as the company is well-positioned to benefit from Russia’s conflict with Ukraine. As Europe seeks sources of coal instead of depending on Russia’s coal shipments, the company remains one of the biggest beneficiaries. The most recent quarterly earnings reveal the positive effects on CONSOL.
During the second quarter of 2024, it reported a total income of $384 million, with the PAMC division playing a significant role by selling 5.8 million tons. Nonetheless, the second quarter experienced a 36% decrease in revenue due to the decline in export ability due to the FSK Bridge’s collapse. Despite this, there was a 9% decrease in sales compared to the previous year, but careful strategic adjustments in the distribution of export orders helped lessen the effects of this decline.
CONSOL Energy Inc. (NYSE:CEIX) reported a profit of $58 million and an adjusted EBITDA of $125 million for the period. Additionally, it produced $59 million in free cash flow and sold around 5.8 million tons of its Pennsylvania Mining Complex (PMC) products, with 2.9 million tons going to the export market.
CONSOL Energy Inc. (NYSE:CEIX) expanded its average coal revenue range per ton and adjusted its expectations for PMC sales in 2024. The company has also found alternative port facilities and controlled its production expenses, leading to strong cash margins per ton.
Considering these recent achievements, CONSOL Energy Inc. (NYSE:CEIX) prioritizes safety, cost management, and securing long-term agreements. The firm is hopeful about future industrial needs and is committed to delivering value to its investors.
It has also grown its book of business, finalizing fixed-price multi-year agreements. Despite facing some obstacles, such as the temporary disruption caused by the Port of Baltimore closure, CONSOL Energy’s book of business is still strong, with 14.5 million tons of contracts secured for 2025.
As of Q2 2024, 30 hedge funds, holding a combined investment of $348.15 million, are bullish on CONSOL Energy Inc. (NYSE:CEIX), according to Insider Monkey’s database.
Greenlight Capital stated the following regarding CONSOL Energy Inc. (NYSE:CEIX) in its Q2 2024 investor letter:
“In addition to gold, we had four material winners in our long portfolio this quarter. CONSOL Energy Inc. (NYSE:CEIX) recovered from $83.76 to $102.03. In the first quarter, CEIX was hindered by the Baltimore bridge collapse, which blocked the company’s exports for a few months. The harbor has now reopened and the market appears to have largely moved past the issue.”
1. Green Brick Partners, Inc. (NYSE:GRBK)
Greenlight Capital’s Equity Stake: $599.15 Million
Number of Hedge Fund Holders: 25
Green Brick Partners, Inc. (NYSE:GRBK) is a diversified homebuilding and land development company. It operates in the real estate and construction sector. It is one of David Einhorn’s top stocks to buy as the real estate sector receives a boost from the Federal Reserve cutting interest rates. Einhorn has held Green Brick’s stocks for almost twenty years. He’s been a long-term investor.
Green Brick Partners, Inc. (NYSE:GRBK) is currently producing some of its top-ever returns. Its sales have increased by 70% annually, marking the highest growth among small to medium-sized homebuilders. Its gross margins in the previous year hit over 30%, ranking it among the industry leaders. In the cities where the company concentrates, such as Dallas, Houston, and Atlanta, there’s been a significant increase in population, job opportunities, and earnings, leading to a surge in housing demand.
The company delivered outstanding results for the second quarter of 2024. The firm declared a 20% increase in home closing revenue for the year, hitting $547 million, alongside a remarkable 35.3% growth in net income. This financial achievement was supported by a 38% increase in earnings per share from the previous year’s period.
In its strategic expansion, Green Brick Partners, Inc. (NYSE:GRBK) launched Green Brick Mortgage, a mortgage company wholly owned by the firm. Additionally, the homebuilder broadened its network of active selling communities by 22%, keeping a cancellation rate of 9.2%.
These recent achievements highlight Green Brick’s strong financial position, which is marked by a solid balance sheet, low debt levels, and ample liquidity. The firm’s backlog value increased by 11% year-over-year, showing robust demand. Looking forward, Green Brick Partners, Inc. (NYSE:GRBK) is confident in its ability to sustain a strong inventory, aiming to have around 4,700 finished lots by the end of 2024.
The firm’s 7.44% revenue increase in the past year, along with a significant rise in earnings of 22.87% in the second quarter of 2024, shows growing influence in the market. Additionally, Green Brick Partners has demonstrated a solid profit margin of 18.93%, indicating effective use of its assets.
As per Insider Monkey’s database, 25 hedge fund portfolios held Green Brick Partners, Inc. (NYSE:GRBK) at the end of the second quarter, which was 21 in the previous quarter.
While we believe in GRBK’s potential, we believe that certain AI stocks promise to deliver high returns within a shorter timeframe. If you are looking for an AI stock that is more promising than GRBK but that trades at less than 5 times its earnings check out our report about the cheapest AI stock.
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