BKI - Tracking David Einhorn's Greenlight Capital Portfolio - Q1 2023 Update

2023-06-12 07:48:17 ET

Summary

• Greenlight Capital's 13F portfolio value increased by around 27% to $1.84B in Q1 2023, with the fund reporting a negative 1.3% return for the quarter.
• New stakes were established in Black Knight Inc., First Citizens BancShares, and New York Community Bancorp, while Victoria's Secret stake was disposed of.
• Significant stake increases were made in Consol Energy, Teck Resources, Global Payments, Capri Holdings, LivaNova, and SPDR Gold Trust, among others.

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 13F Form filed on 5/15/2023. Please visit our Tracking David Einhorn's Greenlight Capital Holdings article series for an idea on his investment philosophy and our previous update for the fund's moves during Q4 2022.

Greenlight Capital's 13F portfolio value stood at $1.84B this quarter. It is up ~27% compared to $1.41B as of last quarter as they increased their net-long position. Einhorn's Q1 2023 letter reported that the fund returned negative 1.3% for Q1 2023 vs 7.5% for the S&P 500 Index. Since 1996 inception, Greenlight has returned ~12.6% annualized vs 9.1% annualized for 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 " Fooling Some of the People All of the Time, A Long Short (and Now Complete) Story ".

New Stakes:

Black Knight Inc. (BKI), First Citizens BancShares (FCNCA), and New York Community Bancorp (NYCB): BKI is a merger-arbitrage stake established this quarter at a cost-basis of $60.59. Intercontinental Exchange ( ICE ) is acquiring them for a $75 per share cash-and-stock deal. FTC has sued to block the merger. The stock currently trades at $56.12. FCNCA is a small 1.19% of the portfolio position purchased this quarter at prices between ~$509 and ~$973 and the stock currently trades well above that range at ~$1285. The 1.12% NYCB stake was established at prices between ~$6.40 and ~$10.40 and the stock is now above that range at $10.95.

Stake Disposals:

Victoria's Secret (VSCO): The ~1% stake in VSCO was built during Q4 2021 at prices between ~$47 and ~$59. There was a ~70% stake increase in Q2 2022 at prices between ~$28 and ~$51. Last quarter saw a ~40% reduction at prices between ~$29 and ~$48. The disposal this quarter was at prices between ~$30 and ~$46. The stock is now at ~$18.

Note: VSCO is a spinoff from Bath & Body Works (previously L Brands) that started trading in August 2021 at ~$46 per share. Greenlight's Q1 2023 letter had the following regarding this position: they exited with a small loss over an 18-month holding period.

Stake Increases:

Consol Energy (CEIX): CEIX is a large (top three) 8.60% of the portfolio position that came about as a result of the merger with Consol Coal Resources that closed in December 2020. Terms called for 0.73 shares of Consol Energy for each share of Consol Coal held. Greenlight had a position in Consol Coal for which they received these shares. There was a ~30% reduction in Q1 2021 at prices between ~$6.75 and ~$12.20. That was followed with a ~25% selling in Q2 2021 at prices between ~$8.75 and ~$18.70. The last three quarters saw a ~23% net increase at prices between ~$35.50 and ~$77.50. There was another ~50% increase this quarter at prices between ~$51 and ~$64. CEIX currently trades at ~$63.

Teck Resources (TECK): TECK is a large (top five) ~5% of the portfolio position purchased in Q2 2020 at prices between $7 and $12.25. The stock currently trades at $42.51. There was a ~40% stake increase in Q4 2020 at prices between ~$12.25 and ~$18.85 while next quarter there was a ~25% selling at prices between ~$18 and ~$23.75 The two quarters through Q3 2021 had seen a stake doubling at prices between ~$19.50 and ~$26.80. There was ~55% selling over the next three quarters at prices between ~$26 and ~$46. The last three quarters have seen a ~25% increase at prices between ~$26 and ~$44.

Global Payments (GPN): GPN is a now at 3.43% of the portfolio stake. It was established in Q4 2021 at prices between ~$118 and ~$161. Q3 2022 saw the stake sold down by ~47% at prices between ~$108 and ~$137. There was a ~120% stake increase in the last two quarters at prices between ~$93 and ~$125. The stock is now at ~$100.

Capri Holdings (CPRI): The 3.18% CPRI position was purchased in 2021 at prices between ~$40.50 and ~$67. Q1 2022 saw a ~12% trimming while next quarter there was a ~20% stake increase. That was followed by a one-third increase this quarter at prices between ~$41 and ~$68. The stock is now at ~$37.

Note: Greenlight's cost-basis is ~$56.

LivaNova plc (LIVN): The 2.45% of the portfolio stake in LIVN was built over the six quarters through Q3 2022 at prices between ~$44 and ~$92. The stock is now at $47.43. There was a ~23% stake increase this quarter at prices between ~$41 and ~$58.

SPDR Gold Trust (GLD): The 2.27% GLD stake was built in Q3 2020 at prices between $167 and $194. Q1 2021 saw a ~70% selling at prices between ~$158 and ~$183. H1 2022 had seen a ~140% stake increase at prices between ~$167 and ~$192. The last two quarters saw a ~24% reduction at prices between ~$151 and ~$170. It currently trades at ~$182. This quarter saw a ~9% increase.

Concentrix Corp (CNXC): The small 1.37% CNXC position saw a ~150% stake increase during Q3 2022 at prices between ~$110 and ~$137. That was followed with a ~115% increase this quarter at prices between ~$118 and ~$151. The stock currently trades at $83.44.

Tenet Healthcare ( THC ) and Gulfport Energy (GPOR): THC is a 2.23% of the portfolio position purchased last quarter at a cost-basis of $48.61. The stock currently trades at $72.81. There was a ~117% stake increase this quarter at prices between ~$49 and ~$62. GPOR is a 1.23% of the portfolio stake built in the last two quarters at prices between ~$61 and ~$97. It is now at ~$101.

Stake Decreases:

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. Q1 2021 saw a ~28% selling at ~$20.50 per share through an underwritten offering. The stock currently trades at $55.69. They own ~38% of the business. There was a minor ~2% trimming this quarter.

Note: Their Q1 2023 letter had the following regarding GRBK. It was their biggest winner this quarter. This followed significant underperformance last year.

Brighthouse Financial (BHF): BHF is a large (top three) stake at 7.49% 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. There was a ~70% selling in Q4 2018 at prices between $29 and $46.50. The stock is currently at $44.42. The last six quarters have seen minor trimming.

Note: BHF is a spinoff of MetLife's ( MET ) U.S. Retail business (annuities and life insurance) that started trading in July 2017.

Kyndryl Holdings (KD): KD is a large (top five) 6.82% of the portfolio position built over the last five quarters at prices between ~$8.25 and ~$41 and the stock is now at $12.43. There was a minor ~6% trimming this quarter.

The ODP Corp (ODP): ODP is a ~4% of the portfolio position primarily built over the three quarters through Q4 2021 at prices between ~$36 and ~$50. The stock currently trades at ~$43.80. There was a ~20% stake increase in Q2 2022 at prices between ~$29 and ~$46. The last two quarters saw minor trimming.

Note: Greenlight's cost-basis is ~$44.

Southwestern Energy (SWN): SWN is a 2.42% of the portfolio stake established in Q1 2022 at an average price of $6.58. The stock currently trades at $5.26. There was a ~48% stake increase during Q3 2022 at prices between ~$5.60 and ~$8.10. That was followed with a similar increase last quarter at prices between ~$5.50 and ~$7.25. This quarter saw marginal trimming.

Weatherford plc (WFRD): The 1.87% of the portfolio position in WFRD was purchased in Q1 2022 at an average price of $32.27 and it is now at $65.29. The last quarter saw a ~22% reduction at prices between ~$32 and ~$51. There was marginal trimming this quarter.

iShares Silver Trust (SLV): SLV is a 1.79% of the portfolio position established in Q3 2021 at prices between ~$20 and ~$24.50 and the stock currently trades at $22.27. There was a minor ~5% trimming in the last two quarters.

Civitas Resources (CIVI): The 1.70% CIVI stake saw a roughly two-thirds increase last quarter at prices between ~$56 and ~$71 and it is now at $71.24. There was marginal trimming this quarter.

GoPro Inc. (GPRO): The 0.70% GPRO stake was built over H1 2021 at prices between ~$7.50 and ~$13.50. There was a ~20% selling in Q4 2021 at prices between ~$8.50 and ~$11.60. The stock currently trades at $4.18. The last few quarters have seen minor trimming.

Resideo Technologies (REZI): The 0.65% REZI stake was established in Q2 2020 at prices between $3.95 and $12.50. H2 2020 saw a one-third increase at prices between ~$10 and ~$22.50 while next quarter saw a ~45% selling at prices between ~$21 and ~$31.50. That was followed with a ~15% trimming in Q4 2021. Next quarter saw a ~30% stake increase at prices between ~$23 and ~$27. There was a ~55% selling this quarter at prices between ~$16.75 and ~$20. The stock is now at $17.42.

Kept Steady:

Graphic Packaging Holding (GPK): The small 1.48% stake in GPK was kept steady this quarter.

The spreadsheet below highlights changes to Greenlight's 13F stock holdings in Q1 2023:

For further details see: