We recently published a list of 10 Best Stocks to Buy According to Billionaire David Einhorn. In this article, we are going to take a look at where Brighthouse Financial, Inc. (NASDAQ:BHF) stands against other best stocks to buy according to billionaire David Einhorn.
David Einhorn is a highly regarded hedge fund manager, who co-founded Greenlight Capital in 1996. Einhorn shot to fame after he correctly forecasted the collapse of Lehman Brothers during the financial crisis. He graduated from Cornell University and garnered his skills in the hedge fund industry under the mentorship of Gary Siegler and Peter Collery at the SC Fundamental Value Fund. Due to his prowess in long/short equity strategies, David Einhorn is being tagged as one of the most successful hedge fund managers.
Greenlight Capital’s Investment Philosophy
Greenlight Capital specializes in value-oriented strategies. The investment management firm primarily focuses on long and short positions in the listed equity securities and selectively engages in distressed debt investments during favorable economic cycles. Einhorn is a highly-regarded hedge fund manager who uses a long-short investment strategy. Because of this strategy, he can capitalize on both rising and falling markets, providing him flexibility during uncertainties.
The Greenlight Capital funds (the Partnerships) managed to return 7.2% in 2024, net of fees and expenses, as compared to 25.0% for the broader S&P 500 index. However, since the inception of Greenlight Capital, the Partnerships returned 3,117% cumulatively or 12.9% annualized, both net of fees and expenses. Over the same period, the S&P 500 index delivered 1,421% or 10.0% annualized. Notably, Greenlight’s investors earned $5.7 billion, net of fees and expenses, since inception.
READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.
Greenlight Capital’s Views on Current Market Dynamics
CNBC, while quoting the comments of Greenlight Capital’s David Einhorn, mentioned that speculative behavior in the current bull market has reached beyond common sense. As per the firm’s Q4 2024 investor letter, the investors continue to experience a ‘Fartcoin’ stage of the market cycle. To give a brief context, Fartcoin is a cryptocurrency that came into existence late last year. Apart from trading and speculation, no other obvious purpose is being served and no need that is not being served elsewhere is being fulfilled. Einhorn went on to add that the investors might be leaving the Fartcoin stage of the market and entering the Trump (and Melania) memecoin stage. While the certainty about the possible outcome remains unpredictable, it is going to be wild, says David Einhorn.
Amidst these trends, let us now have a look at the 10 Best Stocks to Buy According to Billionaire David Einhorn.
Our Methodology
To list the 10 Best Stocks to Buy According to Billionaire David Einhorn, we selected the top 10 stocks in Greenlight Capital’s portfolio as per its Q4 2024 13F filing. We settled on the hedge fund’s 10 biggest holdings. Finally, we ranked the stocks in ascending order based on the value of Greenlight Capital’s equity stakes. Additionally, we have mentioned the hedge fund sentiment around each stock, as of Q4 2024.
Why are we interested in 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A closeup of a hand signing a life insurance policy, illustrating the security it provides.
Brighthouse Financial, Inc. (NASDAQ:BHF)
Greenlight Capital’s Stake Value: $136.19 million
Number of Hedge Fund Holders: 25
Brighthouse Financial, Inc. (NASDAQ:BHF) offers annuity and life insurance products in the US. The company continued to make progress on its capital-focused strategic initiatives, which include completing reinsurance transaction with a third party to reinsure a legacy block of universal life and variable universal life products as well as fully transitioning to hedging all new business for the Shield Level Annuities Product Suite on a standalone basis. In 2024, Brighthouse Financial, Inc. (NASDAQ:BHF) announced updates to its Shield product suite, designed to help the Shield suite remain competitive, adapt to changes happening in the broader industry, and reflect its ongoing focus on meeting clients’ evolving needs.
Furthermore, Brighthouse Financial, Inc. (NASDAQ:BHF)’s estimated combined RBC ratio as of the end of the year was ~400%, demonstrating a $100 million capital contribution from the holding company to Brighthouse Life Insurance Company. The company continues to have a healthy level of holding company liquid assets. Brighthouse Financial, Inc. (NASDAQ:BHF) possesses a high-quality, well-diversified investment portfolio, with total investments to the tune of ~$125 billion. Of this, ~$88 billion is in fixed maturity securities (97% investment grade). Since Q4 2021, the company has materially de-risked its portfolio as it has reduced below investment grade (BIG) credit by ~38%, while ‘B’-rated has been reduced by ~69%.
Overall, BHF ranks 3rd on our list of the 10 Best Stocks to Buy According to Billionaire David Einhorn. While we acknowledge the potential of BHF as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued AI stock that is more promising than BHF but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires
Disclosure: None. This article is originally published at Insider Monkey.
