David Einhorn’s Top 5 Stock Picks

2. Brighthouse Financial, Inc. (NASDAQ: BHF)

Value: $131,798,000
Percent of David Einhorn’s 13F Portfolio: 7.92%
No. of Hedge Fund Holders: 33

Insurance company Brighthouse Financial Inc. ranks 2^nd on the list of David Einhorn’s top 10 stock picks. The North Carolina-based company is a member of the Fortune 500 list, with over 2 million customers. The stock has gained about 60% over the last 12 months. Adjusted EPS in the fourth quarter for the company came in at $3.03, way ahead of the Street’s forecast of $2.74. Adjusted net investment income came in at $1.04 billion, compared to $1.00 billion in the third quarter.

Greenlight Capital is one of the 33 hedge funds tracked by Insider Monkey having stakes in BHF at the end of the fourth quarter. The fund owns over 3.64 million shares of the company.

Miller Value Partners, in their Q4 2020 investor letter, said that their Brighthouse Financial, Inc. (NASDAQ: BHF) position has been increased during the second half of 2020.

Here is what Miller Value Partners has to say about Brighthouse Financial, Inc. in their Q4 2020 investor letter:

“In addition, we have recently increased our position size in Brighthouse Financial (BHF), one of the of the largest annuity and life insurance companies in the U.S. Since separating from MetLife, Brighthouse has built strong sales momentum and has focused on building out a new, less capital intensive business. Brighthouse is targeting nearly $9B in annual annuity sales by the end of 2021 (double 2017 levels) and expanding its life insurance businesses by 10x over the same time period. The company is targeting its capital-intensive business to be 18% by 2025 (half of 2016 levels), which should further enhance future cash flow generation. The company’s capital ratios remain strong and well above regulatory requirements. Management is aggressively returning cash to shareholders, targeting a total of $1.5B in share buybacks by the end of 2021 and retiring nearly 1/3 of their outstanding shares. While the market remains concerned about the impact of lower interest rates and their capital-intensive business, we believe the share price is over discounting these concerns and see the potential impact lessening over the coming years. Brighthouse’s equity appears significantly mispriced, closing the year at a greater than 70% discount to book value and a price-to-earnings multiple of 3 times, a significant discount to its peers and the overall market.”