1. Green Brick Partners, Inc. (NYSE:GRBK)
Greenlight Capital’s Stake Value: $528,308,000
Percentage of Greenlight Capital’s 13F Portfolio: 30.22%
Number of Hedge Fund Holders: 12
Green Brick Partners, Inc. (NYSE:GRBK) is a Texas-based homebuilding and land development company. David Einhorn placed his largest portfolio bet on Green Brick Partners, Inc. (NYSE:GRBK) as a hedge against inflation. His fund owns 17.4 million shares of the company, worth $528.3 million, representing 30.22% of the total 13F holdings.
In 2021, the full-year revenue for Green Brick Partners, Inc. (NYSE:GRBK) stood at $1.4 billion, compared to $976 million in 2020. The net income in 2021 came in at $190.2 million, up from $112.7 million in the prior year. The 2021 cash and cash equivalents were $78.7 million, an increase of 304% from the previous year.
On April 6, B. Riley analyst Alex Rygiel reiterated a Buy recommendation on Green Brick Partners, Inc. (NYSE:GRBK) but lowered the price target on the shares to $25 from $27. The analyst cited expected short-term weakness in deliveries caused by supply chain challenges for the price target cut.
Of the 12 hedge funds that were bullish on Green Brick Partners, Inc. (NYSE:GRBK) in the fourth quarter of 2021, Gavin Saitowitz and Cisco J. Del Valle’s Springbok Capital held a prominent position in the company, with 848,962 shares worth $25.7 million.
Here is what Black Bear Value Partners has to say about Green Brick Partners, Inc. (NASDAQ:GRBK) in its Q4 2021 investor letter:
“Green Brick Partners is a residential land developer and homebuilder. Most of their operations are in Texas, Georgia, and Florida. GRBK was formerly a private partnership between Jim Brickman and entities related to Greenlight Capital (managed by David Einhorn). David is currently the Chairman of the Board.
There is a long-term fundamental supply/demand imbalance in housing inventory. This is a direct result of underproduction of new homes amid a challenging mortgage financing environment over the last 10+ years since the Great Financial Crisis. Looking forward we should have increased housing demand from millennials as they enter the family-phase of life and desire more space. Rates are still near historic lows and people are desiring more personal space as remote work becomes more acceptable.
It is rare to be able to partner with an excellent operator and an excellent capital allocator. As evidenced by our investment in AutoNation, when you marry those 2 concepts you can wind up with a wonderful result. GRBK has been reinvesting their cash flow in additional lots/land inventory. This masks the earnings power of the company. The company is valued somewhere between 6-10x steady-state earnings and potentially even cheaper than that. I tend to be more conservative given the potential for rate rises and inflationary increases in development costs. We have high-quality stewards at both the operating and Board level.”
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