"Tracking David Einhorn’s Portfolio – Q4 2019 Update"
"David Einhorn's 13F stock portfolio value decreased from $1.39B to $1.35B this quarter.Greenlight added DXC Technology while dropping Dillard’s and Voya Financial.The largest three positions are at ~52% of the portfolio. As of Q4 2019, the overall portfolio is 127% long and 63% short.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 02/14/2020. Please visit our  series for an idea on his investment philosophy and our  for the fund’s moves during Q3 2019.Greenlight Capital’s 13F portfolio value stood at $1.35B this quarter. It is down ~3% compared to $1.39B as of last quarter. Einhorn’s Q4 2019 letter reported that the fund returned 13.8% for 2019. This is compared to 31.5% 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. Short stakes currently held include Assured Guaranty (AGO), Tesla (TSLA) and Netflix (NFLX). Also, their Q4 2019 letter talked about closing a short position in Lam Research (LRCX) at a loss.New Stakes:DXC Technology (DXC): DXC is a medium-sized 2.27% of the portfolio stake established this quarter at a cost-basis of $36.54. The stock currently trades at $29.78. The buy thesis is on the idea that 7x implied earnings will turn out to be very cheap as the new CEO addresses the self-inflicted challenges.Stake Disposals:Dillard’s Inc. (DDS): The 1.41% DDS stake was purchased in Q2 2019 at $59.20 compared to current price of $63.22. Last quarter saw a ~25% selling at prices between $55 and $79.50 and the disposal this quarter was at prices between $66 and $78.Note: Dillard’s has seen previous roundtrips in the portfolio.Voya Financial (VOYA) previously ING US: The 1.24% VOYA position was established in Q2 2013 at a cost-basis of $20.29. 2017 saw a ~60% combined increase at prices between $24 and $41. 2018 had seen a ~80% selling at prices between $37 and $55 and that was followed with another ~70% reduction in H1 2019 at prices between $39.50 and $56. The elimination this quarter was at prices between $50.50 and $62. The stock currently trades at $62.13. Greenlight harvested gains.Note: Overall, the position had a 21.7% annualized return over 6.5 years of ownership. Exit was primarily based on valuation (it is currently trading near book value).Stake Increases:Chemours (CC): CC is a large ~9% 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 $18.56. This quarter also saw a ~5% stake increase. For investors attempting to follow, CC is a good option to consider for further research.Note 1: The main businesses of Chemours are Titanium Dioxide and Refrigerants both of which are under pressure. Despite that, as of last September, Greenlight believed CC had $8.50 earnings power for 2021. This is compared to Wall Street estimates of $3.20 and $3.99 for 2020 and 2021 respectively. Also, Greenlight believes the PFOA liability concerns are overrated - PFOS liability is more of a risk factor and Chemours has minimal exposure there.Note 2: Greenlight had a very successful (4x returns) previous roundtrip with Chemours in the two-year period that ended in Q1 2018.Echostar (SATS): The 2.18% SATS position was purchased in Q4 2018 at prices between $34 and $46 and it is now at $40.64. This quarter saw a ~14% stake increase at prices between $35.50 and $44.75.Stake Decreases:AerCap Holdings N.V. (AER): AER is a large (top three) ~15% 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 $62. Last two quarters have also seen a ~20% selling.Altice USA (ATUS): ATUS is a 4.38% 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 this quarter at prices between $25 and $31.50. The stock is currently at ~$29.Scientific Games (SGMS): The 2.24% SGMS position was purchased in Q2 2019 at prices between $18 and $24 and the stock currently trades at $29.39. This quarter saw a ~25% selling at prices between $19.50 and $31.75.Note: Greenlight’s buy thesis was on the belief that after the spinoff of the online social gaming business SciPlay (SCPL), the remaining gaming equipment business (slot machines and instant lottery) was trading at a discounted valuation of ~5x cashflow.Tempur Sealy International (TPX): A very small 0.34% of the portfolio stake in TPX was purchased in Q2 2017. The following quarter saw a whopping 600% increase to a fairly large position at a cost-basis of $56.11. The position has wavered. Recent activity follows: Last four quarters saw a ~80% selling at prices between $42 and $89. The stock is now at $94.61 and the stake at 1.73% of the portfolio.Medicines Company (MDCO): The ~2% MDCO stake saw a ~23% selling in Q2 2019 at prices between $27.50 and $37.50. This quarter saw another ~70% reduction at prices between $49 and $85. Last November, Novartis (NVS) agreed to acquire MDCO for $85 per share cash and that transaction closed last month.Consol Energy (CEIX): CEIX is a small 0.66% of the portfolio stake purchased in Q4 2018 at prices between $29.50 and $41.50 and increased by ~140% next quarter at prices between $31.50 and $38.50. Q2 2019 saw another stake doubling at prices between $25 and $34.50. The stock currently trades well below those ranges at $6.21. There was a ~10% trimming this quarter.Kept Steady:Green Brick Partners (GRBK): GRBK is currently the largest position at ~21% 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: Greenlight’s Q4 2019 letter discussed this position: The stock trades at a low PE of 9.5 based on 2020 estimates. Revenue has tripled since 2014 and the business (diversified homebuilding and land development) has industry-leading margins and low Debt/Capital.General Motors (GM): GM is Greenlight’s second-largest position at ~17% of the portfolio. The stake was established during the first three quarters of 2015 at prices between $28.50 and $39. The position was increased by around four-times during Q4 2016 & Q1 2017 at prices between $31 and $38.50. The next three quarters saw a ~65% reduction at prices between $32.50 and $46.50. 2018 saw another ~55% selling at prices between $30.50 and $45 and that was followed with a ~50% reduction in H1 2019 at prices between $32 and $40. There was a ~5% stake increase last quarter. The stock is now at $34.41.Note 1: In March 2017, Greenlight proposed GM shares be split into two classes (one with dividend & the other without) but management rejected the plan. In response, Greenlight nominated three members to the board but GM shareholders rejected the proposal and the nominations in June.Note 2: Greenlight had a previous successful roundtrip with GM: A ~10% stake was disposed in Q1 2014 at an average exit price of $35.76 compared to an average entry price of $23.87.Brighthouse Financial (BHF): BHF is a large (top five) stake at 10.40% 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 ~$47. There was a ~70% selling in Q4 2018 at prices between $29 and $46.50. Last quarter saw a ~9% stake increase.Note 1: Greenlight commented on this position on their Q4 2019 letter: The stock is cheap trading at 30% of BV (4 PE on 2020 estimates). Main business is variable annuities which means the business is sensitive to equity market performance – their assurances goes upside down in case of a market correction. However, the strong stock market performance since 2011 has resulted in separate account returns far exceeding projections, making it unlikely that many variable annuity policies are currently upside down. Greenlight thinks the business should trade closer to BV.Note 2: BHF is a spinoff of MetLife’s (MET) U.S. Retail business (annuities and life insurance) that started trading in July 2017.Adient plc (ADNT): ADNT is a ~4% 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. The stock is now at $27.86. Q2 & Q3 2019 had also seen a 27% stake increase at prices between $14.50 and $26.CNX Resources (CNX): CNX is a ~4% 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. The stock currently trades at $6.26.Note: The prices quoted above are adjusted for the spinoff of Consol Energy (CEIX) in November 2017.Consol Coal Resources LP (CCR): CCR is a 3.83% 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 $8.21.Teekay LNG Partners (TGP): TGP is a very small ~1% 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 $13.17.Neubase Therapeutics (NBSE): NBSE is a very small 0.82% of the portfolio position established last quarter at prices between $3.15 and $6.60 and the stock currently trades at $6.56. Greenlight controls ~9% of NBSE.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. Greenlight has a 5.3% ownership stake in Exela. The stock started trading at ~$10 and currently goes for $0.31. The 0.24% portfolio stake saw a ~4% trimming in Q1 2019.The spreadsheet below highlights changes to Greenlight’s 13F stock holdings in Q4 2019:Info from  -  10/31/2019 – Performance – Q3 2019 up 5.6% and YTD 24% compared to 20.6% for the S&P 500 index. Commentary – the long BHF stake was finally a winner this quarter – still very bullish. Short NFLX also a winner – still short as they think the content library carried in the books at $23B may not be worth much. TSLA – still shorts and says currently Musk is above the law as some of his activities, especially the SolarCity acquisition was a significant fraud. CC – lost money as the stock fell from $24 to $14.94. they believe the stock is extremely cheap despite the chatter about environment liabilities. There is also insider buying. CAT – short position exited at a loss. Nvidia Short closed at a solid Profit. Dialog Semi long closed at a good profit. Exposure: 116% long and 72% short. Largest Positions: AerCap, Altice USA, Brighthouse Financial, General Motors, and Green Brick Partners.Regulatory filings thru 11/15/2019: 13D/A – 8/29 – Consol Coal (CCR) – 5.49M shares – 19.9% of business."