"Tracking David Einhorn’s Portfolio – Q3 2020 Update"
"David Einhorn's 13F stock portfolio value increased from $922M to $1.22B this quarter.Greenlight added SYNNEX, NCR, Twitter, Intel, and Ingredion while reducing AerCap Holdings. The short position in Tesla thru puts was increased during the quarter.The largest three positions are at ~47% of the portfolio. As of Q3 2020, the overall portfolio is 138% long and 80% short compared to 123% long and 68% short as of Q2 2020.This article is part of a series that provides an ongoing analysis of the changes made to David Einhorn’s Greenlight Capital 13F portfolio on a quarterly basis. It is based on Einhorn’s regulatory  filed on 11/16/2020. Please visit our  series for an idea on his investment philosophy and our  for the fund’s moves during Q2 2020.Greenlight Capital’s 13F portfolio value stood at $1.22B this quarter. It is up around one-third compared to $922M as of last quarter. Einhorn’s Q3 2020 letter reported that the fund returned 5.9% for Q3 2020. This is compared to 8.9% for the S&P 500 Index. In addition to partner stakes, the fund also invests the float of Greenlight Capital RE (GLRE). To learn about David Einhorn and the perils of shorting, check-out his “”.Note: Greenlight maintains a hefty short book which includes a widely known but small short stake in Tesla (TSLA). Their Q3 2020 letter disclosed establishing a new bubble basket comprising of 2nd tier tech businesses along with some recent IPOs.New Stakes:SYNNEX Corporation (SNX) and NCR Corporation (NCR): These are medium-sized new positions established this quarter. The 3.12% of the portfolio SNX stake was purchased at an average-cost of ~$126 and it currently trades at ~$157. NCR is a 2.54% of the portfolio position established at an average-cost of ~$18.90. The stock is now at $25.17.Note: Green Light’s 3rd quarter commentary had the following regarding these two positions – SYNNEX is spinning off its higher-margin BPO business which should result in higher valuation. NCR’s shift to recurring SaaS revenue model should result in strong profits going forward.Twitter Inc. (TWTR), Intel Corp (INTC), and Ingredion Inc. (INGR): These are small (less than ~2% of the portfolio each) new positions established during the quarter. The 1.77% TWTR stake was purchased at prices between $31 and $45 and the stock is now at $42.85. INTC is a 1.27% of the portfolio position established at prices between $47.50 and $61 and it is now at $45.53. The ~1% INGR stake was purchased at prices between ~$75 and ~$89 and it currently trades at $78.22.Dillard’s Inc. (DDS), AMERCO (UHAL), Intercept Pharmaceuticals (ICPT), Graham Holdings (GHC), Panacea Acquisition (PANA) stock and warrants, CryoLife Inc. (CRY), Kennedy-Wilson (KW), Vapotherm Inc. (VAPO), MediciNova (MNOV), Reinvent Technology Partners (RTP) Units, and Amarin Corp plc (AMRN): These are very small (less than ~0.5% of the portfolio each) new stakes established this quarter.Stake Disposals:Exela Technologies (XELA): In July 2017, Quinpario Acquisition (a SPAC that had an IPO in January 2015) merged with HOV LLC and Novitex Holdings (financial technology services provider) to form Exela Technologies. The stock started trading at ~$10 and currently goes for $0.37. The minutely small position was almost sold out last quarter and the remainder stake was disposed this quarter.Tempur Sealy International (TPX), Echostar Corp (SATS), and Whirlpool Corp (WHR): These small (less than ~1% of the portfolio each) positions purchased last quarter were disposed this quarter.Stake Increases:Atlas Air Worldwide (AAWW): AAWW is a large top five 7.49% of the portfolio stake established last quarter at an average price of $36.28 per share. The stock currently trades well above that at $56.50. There was a marginal increase this quarter.Note: the buy-thesis is that there is a shortage of airfreight capacity resulting in a strong tailwind - long-haul international passenger traffic went down 90% YoY in Q2 2020. Also, the surge in e-commerce should help growth (DHL & Amazon contracts).SPDR Gold Trust (GLD): The 5.48% GLD stake was built this quarter as it traded between $167 and $194. It currently trades at ~$177.Note: GDX, the other gold ETF in the portfolio was correspondingly decreased during the quarter.Resideo Technologies (REZI) and Jack in the Box (JACK): The ~2% REZI stake was established last quarter at prices between $3.95 and $12.50 and it is now at $15.87. There was a ~12% stake increase during the quarter. JACK is a 1.30% position purchased last quarter at prices between $32 and $73 and it currently goes for ~$87. There was a ~6% increase this quarter.Neubase Therapeutics (NBSE): NBSE is a small 1.26% of the portfolio position established in Q3 2019 at prices between $3.15 and $6.60 and the stock currently trades at ~$8. Last quarter saw a ~25% stake increase at prices between $6.70 and $11.51. This quarter also saw a ~7% stake increase. Greenlight controls ~11.5% of NBSE.Tesla (TSLA) Puts: The small short position in TSLA thru Puts was increased during the quarter.Stake Decreases:Change Healthcare (CHNG): CHNG is large (top five) 6.27% of the portfolio position purchased at a cost-basis of $11.40. The stock currently trades at $16.90. The thesis is on the idea that 9x estimated FCF valuation is compelling for a company that can be termed “backbone of healthcare internet”. Also, they are poised to grow in the coming years. Last two quarters have seen only minor adjustments.AerCap Holdings N.V. (AER): AER is a large (top five) ~6% position. It was established in Q2 2014 at prices between $39 and $48. Q4 2014 thru Q3 2015 saw a combined ~270% increase at prices between $36.50 and $48.50. First three quarters of 2016 had also seen another ~70% increase at prices between $25.50 and $42. The four quarters thru Q3 2018 saw the stake reduced by ~70% at prices between $49 and $57.50. The stock currently trades at $40.39. This quarter saw a ~14% selling at prices between ~$23 and ~$33.Chemours (CC): CC is a large 5.20% of the portfolio position established in Q2 2019 at a cost-basis of $23.18. Next quarter saw a ~75% stake increase at prices between $12 and $23. The stock is currently at $23.73. Last three quarters have seen a ~55% selling at prices between $7 and $22.Note: Greenlight had a very successful (4x returns) previous roundtrip with Chemours in the two-year period that ended in Q1 2018.Vaneck Gold Miners ETF (GDX): GDX is a 3.10% of the portfolio position purchased last quarter at prices between $23 and $37 and the stock currently trades at $36.94. There was a ~50% selling this quarter at prices between ~$36 and ~$44.50.Note: This quarter saw this position reduced while increasing the stake in the other gold ETF GLD. Their direct exposure to gold was also reduced last quarter. They expect inflation to pick up. Per their Q2 2020 commentary, they established a large macro position in 2-, 5- and 10-year inflation swaps (a TIPS derivative).Teck Resources (TECK), : TECK is a 2.57% of the portfolio position purchased last quarter at prices between $7 and $12.25 and the stock currently trades at $14.83. The buy thesis is on the idea that its business should benefit from base metal price increases. There was a ~6% trimming this quarter.CNX Resources (CNX): CNX is a 2.17% stake purchased in Q3 2014 and built up over the next several quarters. The three quarters thru Q4 2016 had seen a ~50% combined reduction at prices between $8 and $19. The pattern reversed in Q1 2017: ~50% increase at prices between $12 and $16.50. The four quarters thru Q4 2018 had seen a ~80% selling at prices between $11 and $18. Q1 2019 saw the pattern reverse again: two-thirds increase at prices between $9.75 and $13.50. Q1 2020 saw another ~25% stake increase at prices between $5 and $9 while last quarter there was a ~60% selling at prices between $5.50 and $12.95. The stock currently trades at $9.77. This quarter also saw a ~6% trimming.Note: The prices quoted above are adjusted for the spinoff of Consol Energy (CEIX) in November 2017.APi Group (APG) and Gulfport Energy (GPOR): These small (less than ~0.75% of the portfolio each) stakes were reduced during the quarter.Kept Steady:Green Brick Partners (GRBK): GRBK is currently the largest position at ~32% of the 13F portfolio. The stake was acquired as a result of BioFuel Energy’s JGBL Builder Finance acquisition and rename transaction. The deal closed (October 2014) with Greenlight owning 49% of the business. David Einhorn was appointed Chairman of the Board following the transaction.Note: The 3rd quarter commentary said that GRBK was the star of the quarter as the price went up from $11.85 to $16.10. They still believed the stock was very undervalued. The stock currently trades at $22.76.Brighthouse Financial (BHF): BHF is a large (top three) stake at ~8% of the portfolio. The position was established in Q3 2017 and increased by ~60% in the following quarter at an overall cost-basis of $57.92. The stock is currently well below that at $34.49. There was a ~70% selling in Q4 2018 at prices between $29 and $46.50.Note 1: Greenlight commented on this position on their Q2 2020 letter: The valuation is very cheap and there is a large buyback in place that should allow them to retire ~23% of the shares in the next eighteen months.Note 2: BHF is a spinoff of MetLife’s (MET) U.S. Retail business (annuities and life insurance) that started trading in July 2017.Consol Coal Resources LP (CCR): CCR is a 1.49% portfolio stake. Greenlight controls ~35% of CCR. The position came about as a result of Consol’s coal spinoff in 2015. The stock started trading at ~$15 and currently goes for $3.47.Crown Holdings (CCK) and PVH Corp (PVH): These two small (less than ~1.5% of the portfolio each) stakes were kept steady this quarter.The spreadsheet below highlights changes to Greenlight’s 13F stock holdings in Q3 2020:Info from Q2 2020 Letter – 8/4/2020 – Performance – 1.0% in Q2 2020 vs -20.5% for S&P. ~12% annualized since 1996 inception (not in letter but thru Q4 2019 it was 12.6% annualized), Commentary – RISING INFLATION EXPECTATION. GRBK, BHF, CNX, CC, Buzzi Unicem, etc. have exposure to rising prices. BHF – on adjusted-earnings basis PE is 3.3x. There is a $1.5B stock buyback activity that imply the company will retire 23% of stock over the next 18 months. NEW POSITIONS: new, large macro position in 2-, 5- and 10-year inflation swaps (highly liquid derivative of TIPS) when inflation expectation was at 0.1%, 0.8%,and 1.3% for 2-, 5-, and 10-year inflation swaps respectively. TECK – should benefit from base metal price increases. AAWW – added at average price of $36.28 (acquired at 0.5x Q1 2020 tangible book value) – as long-haul international passenger traffic wet down 90% YoY, there is a shortage of airfreight capacity. Also, DHL & Amazon contract tailwinds, given the growth in e-commerce. Germany’s Wirecard related commentary & comparisons to Elon Musk and Tesla – fraud (99% of value lost after a 25x increase over 7.5 years) – had a small short position. Also sudden unintended acceleration (SUA) mention. Also mentions accounting maneuvers to qualify for S&P inclusion – deferring employee compensation, depreciation expense on its new plant in China, R&D spending, and most notably the spike in sales of regulatory credits without a corresponding spike in counterparty expenses to buy these credits, specifically with Fiat Chrysler (FCAU). Expects TSLA parabolic rise to end around the speculated inclusion in S&P 500 index.  EXITS: Adient – turnaround impacted by COVID and that prompted the exit. . Exposure - 123% long and 68% short , Largest Long Positions – AerCap, Atlas Air Worldwide, Brighthouse Financial, Green Brick Partners, and VanEck Vectors Gold Miners ETF.Regulatory filings thru 8/24/2020 – None."