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 Green Brick Partners, Inc. (NYSE:GRBK) 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.
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).
An aerial view of a residential construction project with workers and machinery at work.
Green Brick Partners, Inc. (NYSE:GRBK)
Greenlight Capital’s Stake Value: $534.81 million
Number of Hedge Fund Holders: 25
Green Brick Partners, Inc. (NYSE:GRBK) operates as a homebuilding and land development company. The company is optimistic about the housing market over the long term, which is supported by demographic tailwinds and persistent housing shortages. The company’s Q4 2024 net new orders rose 29.3% YoY to 878 homes. Its growth engine, Trophy Signature Homes, represented the lion’s share of total sales orders at 53.6% of homes sold. Green Brick Partners, Inc. (NYSE:GRBK) has attributed its achievements to its footprint in desirable infill and infill-adjacent submarkets where the company generated more than 80% of its full-year revenues.
The company kicked off 2025 with a healthy position for growth, with total lots owned and controlled up 31.9% YoY. At 2024 end, Green Brick Partners, Inc. (NYSE:GRBK) had 106 active selling communities, representing a 16.5% YoY growth. The company expects that the entry of millennials and Gen Z into their prime home-buying years will continue to drive significant demand. Green Brick Partners, Inc. (NYSE:GRBK) remains well-placed to further capitalize on the incremental demand, leveraging its superior land positions, mainly via its Trophy brand which specializes in more affordable housing options catering to the largest segment of the potential homebuyer market.
Greenlight Capital, an investment management firm, released its Q3 2024 investor letter. Here is what the fund said:
“In addition to gold, Green Brick Partners, Inc. (NYSE:GRBK) was the other significant winner during the quarter. GRBK reported quarterly earnings of $2.32 per share, which beat analyst estimates of $1.77 per share. The company continues to lead the industry in gross margins and has distinguished itself from its peers, who are increasingly focused on appearing to be “land light.” GRBK believes that being land light is very expensive at the gross margin level. Rather than pay high rates to third-party off-balance sheet land bankers, GRBK owns most of its land and lots while maintaining a very low-leveraged investment-grade balance sheet. As a result, it earns all of the development profits in addition to the homebuilding profits. Despite being “land heavy,” the result is a return on equity that is near the top of the industry. Even more exciting, GRBK has had a very successful period of land acquisition, and as a result the prospects for it to continue delivering industry-leading margins remain promising. This quarter, GRBK shares advanced from $57.24 to $83.52.”
Overall, GRBK ranks first on our list of the 10 Best Stocks to Buy According to Billionaire David Einhorn. While we acknowledge the potential of GRBK 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 GRBK 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.
