UNH - Tracking David Einhorn's Greenlight Capital Portfolio - Q3 2022 Update

Summary

• David Einhorn's 13F stock portfolio value increased from $1.29B to $1.41B this quarter.
• Greenlight increased Kyndryl Holdings, LivaNova PLC, and Southwestern Energy while dropping Chemours, International Seaways, and Warner Bros. Discovery.
• The largest three positions are at ~49% of the portfolio. As of Q3 2022, the overall portfolio is 94% long and 84% 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 13F Form filed on 11/14/2022. 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 Q2 2022.

Greenlight Capital's 13F portfolio value stood at $1.41B this quarter. It is up ~10% compared to $1.29B as of last quarter. Einhorn's Q3 2022 letter reported that the fund returned 17.7% for YTD through Q3 2022. This is compared to negative 23.87% 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 " Fooling Some of the People All of the Time, A Long Short (and Now Complete) Story ".

New Stakes:

Twitter Inc. : The large (top three) merger-arbitrage stake was established in August at a cost-basis of ~$37. The stake got disposed as the deal closed at $54.20 per share in October.

Intel Corp. ( INTC ): INTC is a 1.30% of the portfolio position purchased this quarter at prices between ~$26 and ~$41 and the stock currently trades at ~$26.

Stake Disposals:

Atlas Air Worldwide ( AAWW ): AAWW was a large (top three) 6.37% of the portfolio stake established in Q2 2020 at an average price of $36.28 per share. There was a ~45% selling in Q4 2021 at prices between ~$77.50 and ~$95. Last quarter saw a ~57% stake increase at prices between ~$59 and ~$73. The stock currently trades at ~$101. In August, an investor group led by Apollo agreed to acquire AAWW at $102.50 per share cash. The position was closed soon after at a ~80% IRR over the two-year holding period.

Chemours ( CC ): CC was a 1.74% 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 five quarters through Q1 2021 had seen a two-thirds reduction at prices between ~$7 and ~$28.75. That was followed with a ~25% selling in Q4 2021 at prices between ~$28 and ~$34. Next quarter saw a similar increase at prices between ~$23 and ~$36. There was a two-thirds reduction last quarter at prices between ~$29.40 and ~$45. The remainder stake was sold this quarter. The stock is currently at $29.63.

Note: The exit was at a 3-year mid-single-digit IRR. Greenlight had a highly successful (4x returns) previous roundtrip with Chemours in the two-year period that ended in Q1 2018.

International Seaways ( INSW ): INSW was a 0.74% stake established in Q1 2022 at an average price of $15.30 and it currently trades at $37.84. There was a ~55% selling last quarter at prices between ~$19.50 and ~$25. The disposal this quarter was at prices between ~$18 and ~$36.

Note: the position realized gains of ~40% in a six-month holding period.

Warner Bros. Discovery ( WBD ): WBD was a 1.72% of the portfolio position built over the last two quarters at prices between ~$22 and ~$31. It was sold this quarter at prices between ~$11.30 and ~$17.50. The stock is now at $9.23.

Note: the position realized losses of ~40% in a six-month holding period.

Stake Increases:

CONSOL Energy ( CEIX ): CEIX is a large (top five) 7.80% of the portfolio position that came about as a result of the merger with Consol Coal Resources that closed in December. 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 two quarters through Q1 2022 had seen another ~30% selling at prices between ~$20.50 and ~$40.50 while last quarter saw a ~11% increase. CEIX currently trades at ~$71. This quarter also saw a ~5% increase.

Note: Greenlight's Q3 2022 letter had the following regarding Consol Energy - still Expects them to generate $50 after-tax free cash flow by end of 2023. Also thinks 2024 could be another strong year.

Teck Resources ( TECK ): TECK is a 4.66% of the portfolio position purchased in Q2 2020 at prices between $7 and $12.25. The stock currently trades at ~$38. 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 last three quarters at prices between ~$26 and ~$46. This quarter saw a ~8% stake increase.

Kyndryl Holdings ( KD ): KD is a 4.25% of the portfolio position built over the last four quarters at prices between ~$8.25 and ~$41 and the stock is now at $11.36.

LivaNova PLC ( LIVN ): The 2.92% of the portfolio stake in LIVN was built over the last six quarters at prices between ~$44 and ~$92. The stock is now at ~$54.

Capri Holdings ( CPRI ): The 2.69% CPRI position was purchased last year at prices between ~$40.50 and ~$67. Q1 2022 saw a ~12% trimming while last quarter there was a ~20% stake increase. The stock is now at ~$56. There was a minor ~5% further increase this quarter.

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

Southwestern Energy ( SWN ): SWN is a 2.64% of the portfolio stake established in Q1 2022 at an average price of $6.58. The stock currently trades at $5.88. There was a ~48% stake increase this quarter at prices between ~$5.60 and ~$8.10.

Resideo Technologies ( REZI ): The 2.12% REZI stake was established in Q2 2020 at prices between $3.95 and $12.50. H2 2020 had seen 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. The stock is now at $16.26. There were minor increases in the last two quarters.

Concentrix Corp. ( CNXC ): The small 0.87% CNXC position saw a ~150% stake increase this quarter at prices between ~$110 and ~$137. The stock currently trades at ~$130.

Stake Decreases:

Green Brick Partners ( GRBK ): GRBK is currently the largest position at ~26% 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 $24.53. They own ~38% of the business. There was marginal trimming this quarter.

Brighthouse Financial ( BHF ): BHF is a large (top three) stake at ~10% 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 at ~$51. There was a ~70% selling in Q4 2018 at prices between $29 and $46.50. Last four 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.

SPDR Gold Trust ( GLD ): The 2.74% 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. Last two quarters had seen a ~140% stake increase at prices between ~$167 and ~$192. It currently trades at ~$167. There was a ~9% trimming this quarter.

Global Payments ( GPN ): GPN is a now a small ~2% of the portfolio stake. It was established in Q4 2021 at prices between ~$118 and ~$161. Greenlight's cost-basis is ~$126 per share. This quarter saw the stake sold down by ~47% at prices between ~$108 and ~$137. The stock is now at $94.55.

Change Healthcare: Change Healthcare was a 1.56% of the portfolio position purchased in Q1 2020 at a cost-basis of $11.40. There was a ~30% reduction in Q1 2021 at prices between ~$18.25 and ~$24. That was followed with a ~80% reduction in the last two quarters. UnitedHealth ( UNH ) bought Change Healthcare in a $25.75 all-cash deal that closed in October.

Victoria's Secret ( VSCO ): The 1.41% stake in VSCO was primarily built in Q4 2021 at prices between ~$47 and ~$59. There was a ~70% stake increase last quarter at prices between ~$28 and ~$51. The stock is now at $38.90. This quarter saw a ~8% trimming.

Note: VSCO is a spinoff from Bath & Body Works (previously L Brands) that started trading in August 2021 at ~$46 per share.

Kept Steady:

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 $45.26. There was a ~20% stake increase last quarter at prices between ~$29 and ~$46.

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

iShares Silver Trust ( SLV ): SLV is a 1.93% of the portfolio position established in Q3 2021 at prices between ~$20 and ~$24.50 and the stock currently trades at $21.69.

Weatherford International plc ( WFRD ): The 1.72% of the portfolio position in WFRD was purchased in Q1 2022 at an average price of $32.27 and it is now at $48.52. There was a ~7% stake increase last quarter.

GoPro Inc. ( GPRO ): The 0.94% 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 ~$5.

Galapagos NV ( GLPG ): The very small 0.44% of the portfolio stake in GLPG was reduced in the last two quarters. Greenlight's cost-basis was ~$53 per share and the stock currently trades at $42.27.

Civitas Resources ( CIVI ) and Graphic Packaging Holding ( GPK ): These small (less than ~1.20% of the portfolio each) stakes were kept steady this quarter.

The spreadsheet below highlights changes to Greenlight's 13F stock holdings in Q3 2022:

For further details see: