After the unexpected beating that investors and the stock market took in 2022, 2023 is turning out to be a relatively stable year. Last year was an absolute bloodbath that reminded many of the stock market crash in the aftermath of the outbreak of the coronavirus pandemic. Major stock market and high growth sectors crashed as investors rushed to the safety of bank deposits due to a high inflationary and interest rate environment.
Fast forward to 2023 and the general feeling in the market is to simply wait for a recession and get it over with. The Federal Reserve's fight against inflation which saw it rapidly increase interest rates is starting to make its impact. Inflation has broken a consistent upward trend and the labor market might be slowing down as well. On the latter, the unemployment rate which as consistently been dropping since 2021 has finally started to change this trend as well. The latest data from the Labor Department shows that for April 2023, the unemployment rate remained static at 3.4% showing that the labor market might finally be slowing down in the pain of interest rate hikes.
In this environment, it makes sense to take a look at what investment professionals are doing. Hedge funds recently disclosed their Q1'2023 holdings data. One such fund whose filings just hit the web is David Einhorn's Greenlight Capital. The hedge fund, set up in 1996, has a portfolio worth $1.8 billion as of the first quarter of this year. Like several other hedge fund managers, Mr. Einhorn set up the fund on his own and had significant help from his parents who lent him nearly half a million dollars for the startup capital. His fund was so successful that it did not post an annual loss for more than two decades since being set up. However, Mr. Einhorn, like many others, failed to foresee the 2008 financial crisis and ended up losing 23% during the year. Yet, he was quick to recover and ended up reversing these losses in just a year in 2009.
The hedge fund's see-saw with the financial markets has continued since then. As the markets crashed due to the pandemic, Greenlight ended up losing 21.5% in 2020. Yet, in 2022, as the broader markets tumbled, the hedge fund worked its magic and returned investors a whopping 36.6% at a time when nearly everyone else was bleeding. The returns highlighted his prudent stock picking approach, as he correctly read market sentiment and plowed into value stocks right when they were about to take off.
While Mr. Einhorn did set up a hedge fund without having any experience in the stock market, he nevertheless also had exposure to the financial world from an early age. This is because his father had set up his own venture capital fund and his brother also worked in the finance industry. Safe to say, the Einhorns is a financially astute family that knows the ins and outs of the industry.
Despite this, the hedge fund boss's career is not without mistakes. For instance, Einhorn sold his Apple stake in 2018 after worries about a Chinese retaliation in response to U.S. tariffs. However, as we know, Apple's shares have tripled in value since then, and Greenlight Capital has missed out on hundreds of millions of dollars in potential gains.
That's probably the worst sale of my entire career. If we just kept that Apple stock at that value — because we were literally talking about a $1 billion company or something like that, we probably owned a couple percent of it — that would have been really awesome if we had just kept that.
While he might have exited Apple, investors still trust him with billions of dollars in investment. Today, we'll look at some top stock picks of Greenlight Capital, out of which the top three picks are CONSOL Energy Inc. (NYSE:CEIX), Green Brick Partners, Inc. (NYSE:GRBK), and Brighthouse Financial, Inc. (NASDAQ:BHF).
David Einhorn's 2023 Portfolio: Top 15 Stock Picks
David Einhorn of Greenlight Capital
Our Methodology
To pick the top investments of David Einhorn's Greenlight Capital, we took a look at its portfolio for the first quarter of this year. The top fifteen investments in terms of their dollar value are listed below. As a side note, investments in exchange traded funds are excluded and only corporate stocks are included. However, you can take a look at them by studying Greenlight Capital's portfolio.
David Einhorn's 2023 Portfolio: Top 15 Stock Picks
Graphic Packaging Holding Company (NYSE:GPK) is an American company headquartered in Atlanta, Georgia. The firm makes and sells packaging services to a variety of industries such as food and beverage firms and other firms. The company has a global operations base with businesses in Spain, Italy, France, Germany, and other countries.
By the end of last year's fourth quarter, 41 of the 943 hedge funds profiled by Insider Monkey had bought a stake in Graphic Packaging Holding Company (NYSE:GPK). The firm's largest hedge fund investor is Ian Simm's Impax Asset Management since it owns 8.1 million shares that are worth $207 million.
Along with Green Brick Partners, Inc. (NYSE:GRBK), CONSOL Energy Inc. (NYSE:CEIX), and Brighthouse Financial, Inc. (NASDAQ:BHF), Graphic Packaging Holding Company (NYSE:GPK) is a top David Einhorn stock pick.
Weatherford International plc (NASDAQ:WFRD) is headquartered in Houston, Texas. It was set up in 1972 and provides a variety of services to the oil and gas industry such as drilling, well construction, production, drilling, and equipment management.
Insider Monkey's December quarter of 2022 survey of 943 hedge funds found out that 33 had bought the firm's shares. Weatherford International plc (NASDAQ:WFRD)'s largest investor is Donald Yacktman's Yacktman Asset Management with a $238 million stake.
Southwestern Energy Company (NYSE:SWN) explores and produces oil and natural gas in several American states. It was set up in 1929 and is headquartered in Spring, Texas.
Insider Monkey dug through 943 hedge fund holdings and found out that 44 had held a stake in Southwestern Energy Company (NYSE:SWN) in Q4 2022. Its largest hedge fund investor is D.E. Shaw's D E Shaw with a $155 million stake courtesy of 31 million shares.
LivaNova PLC (NASDAQ:LIVN) is a British healthcare firm that is headquartered in London, the United Kingdom. It makes and sells healthcare products such as lung machines, cannulae, and implants.
As of Q4 2022, 30 of the 943 hedge funds part of Insider Monkey's database had invested in the healthcare company. LivaNova PLC (NASDAQ:LIVN)'s largest shareholder is Israel Englander's Millennium Management since it owns a $63 million stake.
Black Knight, Inc. (NYSE:BKI) is a software company headquartered in Jacksonville, Florida. It provides data analytics and hosting products to a variety of industries.
Insider Monkey surveyed 943 hedge funds for their fourth quarter of 2022 portfolios and found out that 49 had bought Black Knight, Inc. (NYSE:BKI)'s shares. The firm's largest hedge fund investor is Paul Marshall and Ian Wace's Marshall Wace LLP since it owns a $71 million stake.
Capri Holdings Limited (NYSE:CPRI) is a British luxury goods firm based in London, United Kingdom. It sells apparel and footwear under a variety of high end brands.
As of December 2022, 53 of the 943 hedge funds part of Insider Monkey's database had held a stake in the firm. Capri Holdings Limited (NYSE:CPRI)'s largest hedge fund investor is Richard Mashaal's Rima Senvest Management with a $212 million investment.
Global Payments Inc. (NYSE:GPN) is a business service provider based in Atlanta, Georgia. As the name suggests, it provides a variety of digital payment products and solutions.
Insider Monkey profiled 943 hedge funds for last year's fourth quarter and discovered that 52 had invested in Global Payments Inc. (NYSE:GPN). The firm's largest investor is William B. Gray's Orbis Investment Management since it owns 6.5 million shares that are worth $688 million.
The ODP Corporation (NASDAQ:ODP) provides office equipment such as cleaning supplies. It also operates a digital marketplace.
After scouring through 943 hedge funds portfolios, Insider Monkey found that 34 had held a stake in the firm as of December 2022. The ODP Corporation (NASDAQ:ODP)'s largest investor as of March 2023 is Parag Vora's HG Vora Capital Management with a $134 million stake.
Tenet Healthcare Corporation (NYSE:THC) operates hospitals and provides services for the same industry. It is based in Dallas, Texas.
59 of the 943 hedge funds profiled by Insider Monkey had invested in Tenet Healthcare Corporation (NYSE:THC) during Q4 2022. Larry Robbins' Glenview Capital is the largest shareholder through a $431 million investment.
CONSOL Energy Inc. (NYSE:CEIX), Tenet Healthcare Corporation (NYSE:THC), Green Brick Partners, Inc. (NYSE:GRBK), and Brighthouse Financial, Inc. (NASDAQ:BHF) are some of Greenlight Capital's top stocks picks for Q1 2023.