"Tracking David Einhorn’s Portfolio – Q2 2020 Update"
"David Einhorn's 13F stock portfolio value increased from $702M to $922M this quarter.Greenlight added Vaneck Gold Miners ETF and Atlas Air Worldwide while dropping Altice USA and Adient plc.The largest three positions are at ~54% of the portfolio. As of Q2 2020, the overall portfolio is 123% long and 68% short compared to 96% long and 69% short as of Q1 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 08/14/2020. Please visit our  series for an idea on his investment philosophy and our  for the fund’s moves during Q1 2020.Greenlight Capital’s 13F portfolio value stood at $922M this quarter. It is up ~31% compared to $702M as of last quarter. Einhorn’s Q2 2020 letter reported that the fund returned 1% for Q2 2020. This is compared to 20.5% 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 Q2 2020 letter drew comparisons to Germany’s Wirecard AG (WCAGY), a former high-flyer that lost 99% of its value after fraud was confirmed in June.New Stakes:Vaneck Gold Miners ETF (GDX): GDX is a top five 7.29% of the portfolio position purchased this quarter at prices between $23 and $37 and the stock currently trades at $40.65.Note: They expect inflation to pick up. Per their Q2 2020 commentary, their direct exposure to gold was reduced while adding this position. They also established a large macro position in 2-, 5- and 10-year inflation swaps (a TIPS derivative).Atlas Air Worldwide (AAWW): AAWW is a large top five 6.61% of the portfolio stake established this quarter at an average price of $36.28 per share. The stock currently trades well above that at $57.49.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).Teck Resources (TECK), Resideo Technologies (REZI), and Jack in the Box (JACK): TECK is a 2.71% of the portfolio position purchased this quarter at prices between $7 and $12.25 and the stock currently trades at $11.46. The buy thesis is on the idea that its business should benefit from base metal price increases. The 2.47% REZI stake was established at prices between $3.95 and $12.50 and it is now at $13.91. JACK is a 1.53% position purchased at prices between $32 and $73 and it currently goes for $83.36.SPDR Gold Trust (GLD), APi Group (APG), Tempur Sealy International (TPX), Echostar Corp (SATS), Whirlpool Corp (WHR), and PVH Corp (PVH): These are small (less than ~1% of the portfolio each) new positions purchased during the quarter.Stake Disposals:Altice USA (ATUS): ATUS was a ~5% portfolio stake established in Q3 2018 at a cost-basis of $18.38 and increased by ~40% in Q4 2018 at prices between $14.50 and $19. There was a ~23% selling in Q2 2019 at prices between $22 and $25. That was followed with a one-third reduction in Q4 2019 at prices between $25 and $31.50. Last quarter also saw a ~25% selling at prices between $17.20 and $29.50. The disposal this quarter was at prices between $22 and $26.50. The stock is currently at ~$26.65.Adient plc (ADNT): ADNT was a 2.40% portfolio stake that saw a ~300% increase in Q3 2017 at prices between $64 and $86. There was a roughly one-third selling in Q1 2018 at prices between $57.50 and $84. Next quarter saw another ~50% reduction at prices between $47.50 and $66. There was an about turn in Q3 2018: position almost doubled at prices between $38 and $51 and that was followed with a ~75% increase next quarter at prices between $15 and $38. Q2 & Q3 2019 had also seen a 27% stake increase at prices between $14.50 and $26. The pattern reversed again last quarter: ~25% selling at prices between $6.50 and $28.50. The stake was eliminated this quarter at prices between $7.35 and $22.30. The stock is now at $17.72.Note: The exit was prompted by COVID as they felt the turnaround was significantly impacted.Teekay LNG Partners (TGP): TGP was a very small 0.81% of the portfolio stake established in Q1 2019 at prices between $11 and $15.25. Next quarter saw a ~70% stake increase at prices between $13 and $15.25. The stock currently trades at $11.75. There was a roughly one-third reduction last quarter at prices between $7.50 and $15.50. The disposal this quarter was at prices between $9 and $13.Altria Group (MO), American Express (AXP), Berkshire Hathaway (BRK.B), Centene Corp (CNC), Danaher Corp (DHR), Walt Disney (DIS), Goldman Sachs (GS), and Paychex Inc. (PAYX): These small (less than ~1.5% of the portfolio each) positions established last quarter were disposed this quarter.Stake Increases:AerCap Holdings N.V. (AER): AER is a large (top three) ~12% 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 $30.77. There was a ~8% stake increase this quarter.Change Healthcare (CHNG): CHNG is large 6.51% of the portfolio position purchased at a cost-basis of $11.40. The stock currently trades at $13.12. 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. This quarter saw a marginal stake increase.Neubase Therapeutics (NBSE): NBSE is a small 1.81 % of the portfolio position established in Q3 2019 at prices between $3.15 and $6.60 and the stock currently trades at $8.37. This quarter saw a ~25% stake increase at prices between $6.70 and $11.51. Greenlight controls ~11% of NBSE.Gulfport Energy (GPOR): The minutely small 0.15% GPOR stake saw a substantial stake increase this quarter.Stake Decreases:Chemours (CC): CC is a large 5.65% of the portfolio position established in Q2 2019 at a cost-basis of $23.18. Last quarter saw a ~75% stake increase at prices between $12 and $23. The stock is currently at $20.56. Last two quarters have seen a ~50% selling at prices between $7.25 and $19.75.Note: Greenlight had a very successful (4x returns) previous roundtrip with Chemours in the two-year period that ended in Q1 2018.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 $0.43. The minutely small position was almost sold out this quarter.CNX Resources (CNX): CNX is a 2.85% 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. Last quarter saw another ~25% stake increase at prices between $5 and $9 while this quarter there was a ~60% selling at prices between $5.50 and $12.95. The stock currently trades at $11.42.Note: The prices quoted above are adjusted for the spinoff of Consol Energy (CEIX) in November 2017.Tesla (TSLA) Puts: The small short position in TSLA thru Puts was disposed during the quarter.Kept Steady:Green Brick Partners (GRBK): GRBK is currently the largest position at ~31% 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. The stock is up ~35% YTD.Brighthouse Financial (BHF): BHF is a large (top three) stake at ~11% 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 $31.03. There was a ~70% selling in Q4 2018 at prices between $29 and $46.50. Last quarter saw a marginal increase.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 2.43% 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 $3.74.Crown Holdings (CCK): The small 1.51% of the portfolio stake in CCK was kept steady this quarter.The spreadsheet below highlights changes to Greenlight’s 13F stock holdings in Q2 2020:Info from Q1 2020 Letter – 5/1/2020 – Performance – -21.5% in Q1 2020 vs -19.6% for S&P. ~12% annualized since 1996 inception (not in letter but thru Q4 2019 it was 12.6% annualized), Commentary – undervaluation thesis on BHF ($2B cash to holding company & $2.5B market cap), GRBK (single family homes should outperform going forward – hard assets, gold, inflation post-pandemic thesis), AER (no distress as they can raise ~70% planes unencumbered). TSLA melt-up result in moderate loss as the short position was structured as a put spread. Dialog Semi (Apple business loss etc. has created undervaluation) NEW POSITIONS: CHNG – can be called the “backbone of healthcare internet” – cost-basis $11.40 – McKesson had large ownership which reduced the float – now 3x that due to exchange offer. EXITS:GM – over 5-year holding period ~9% IRR – compares well to a loss for Ford during the period, TPX – exited near the top following earnings beat. Medicines Company large gain due to buy-out by Novartis. Lanxess – double-digit IRR over 6-year holding period. DXC Technology small loss over a short holding period. Scientific Games small loss. Echostar small gain. Most of the bubble-basket puts expired in January. Celltrion & Dexcom covered.   Exposure -96% long and 69% short , Largest Long Positions – AerCap, Brighthouse Financial, Change Healthcare, CNX Resources and Green Brick Partners.Regulatory filings thru 5/21/2020 – None."