Greenlight Capital’s performance
While last year wasn’t good for hedge funds in general, it turned out to be the worst on record for David Einhorn’s Greenlight Capital (GLRE). Vastly underperforming broader markets, the fund lost 34%.
Ready to put your morning scrolling to use? Sign up for Bagels & Stox, our witty take on the top market and investment news straight to your inbox! Whether you’re a serious investor or just want to be informed, Bagels & Stox will be your favorite email.
Focus on a few high-conviction bets
Greenlight Capital is now focusing on fewer names, and its highest conviction bets. In the first quarter, the fund rebounded by 11.0%. Meanwhile, the S&P 500 (SPY), Dow Jones Industrial Average (DIA), and NASDAQ (QQQ) gained 13.0%, 11.1%, and 16.5%, respectively. The company highlighted the fund’s first-quarter performance in an investor letter on April 12.
Ups and downs for Greenlight
Whereas just one position boosted Greenlight by ~1% last year, in the first quarter, it had eight positions with similar gains. Its biggest gainers in the quarter were:
- AerCap (AER)
- Brighthouse Financial (BHF)
- Deutsche Pfandbriefbank (PBB.DE)
- General Motors (GM)
- Green Brick Partners (GRBK)
Altice USA (ATUS), Tempur Sealy International (TPX) and Tesla (TSLA) short positions also contributed to Greenlight’s gains. Meanwhile, short positions in Assured Guaranty (AGO) and Bubble Basket and Netflix (NFLX) put options fell.
David Einhorn is known for being short on Tesla (TSLA). Last November, he referred to Tesla's peak in the last quarter as being “as good as it gets” for the company.
Yum! Brands (YUM) is set to report its first-quarter earnings before the market opens on May 1.
Merchant power player NRG Energy (NRG) is slated to report its first-quarter earnings on May 2. According to consensus estimates, NRG will report earnings of $0.56 per share for the quarter, which ended on March 31.
Fortinet (FTNT) is scheduled to announce its first-quarter results on May 2.
AK Steel (AKS) is scheduled to release its first-quarter earnings on April 29 after the markets close. The company is to hold its earnings call on April 30.
Apple (AAPL) is scheduled to release its second quarter of fiscal 2019 results on April 30 after markets close.
Clorox (CLX) stock was trading flat on a year-to-date basis as of April 24, and it has underperformed the broader markets as well as its peers.