Greenlight Capital's Q2 Investor Letter: Brexit, Central Bank's 'Failing Policies,' Top Stock Picks And More

David Einhorn's Greenlight Capital released its quarterly letter to investors and stakeholders on Tuesday. The firm's funds saw a 2.6 percent loss in the second quarter (net of fees and expenses), bringing its year-to-date net return to 0.4 percent.

Here are some of the notable highlights from the letter.

Brexit And Central Banks

Greenlight Capital's view is that the Brexit voting outcome by itself "will not be a significant economic event." The U.K. economy is "simply not big enough for even a devalued British pound to have a large direct impact on global trade."

On the other hand, the Brexit voting outcome was sufficient enough to force the U.S. Federal Reserve to put off an interest rate hike "for some time." Meanwhile, other central banks across the world have made promises to "double down on their failing policies as they deem appropriate."

Biggest Winners And Losers

Gold and gold related stocks were the largest winner in the fund's portfolio. In addition, CONSOL Energy Inc. CNX was a "significant winner" in the quarter as shares soared 43 percent.

An undisclosed oil fracking short was the fund's biggest loser, followed by a short position in Amazon.com, Inc. AMZN.

On the long side, Apple Inc. AAPL and Macy's, Inc. M were "material losers" and the fund sold its stake in Macy's at a loss in the quarter.

New Buys And Sells

The fund began buying shares of Chemours Co CC in the fourth quarter of last year on the belief that titanium dioxide prices were at or near the bottom. An un-identified short recommendation surfaced in June, which enabled the firm to complete purchasing its take at "attractive prices."

Closed Names

The firm also closed its position in:

  • American Capital Agency Corp. AGNC for a small gain.
  • Baxter International Inc BAX for a profit when the stock reached the fund's view of fair value.
  • Ingram Micro Inc. IM for a "good return" after the company agreed to be acquired by Tianjin Tianhai.
  • Oil States International, Inc. OIS was sold rather than waiting to see if a recovery in oil helps the stock recover.

Covered Shorts

The firm also covered shorts in the aftermath of the Brexit vote in the following names:

  • Intuitive Surgical, Inc. ISRG at a loss as the firm overestimated how quickly competition would enter the market.
  • Under Armour Inc UA at a "good profit."
  • United Rentals, Inc. URI which proved to be a "sizable winner over the last couple years."
Full ratings data available on Benzinga Pro.Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email feedback@benzinga.com with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!
date
ticker
name
Price Target
Upside/Downside
Recommendation
Firm
Posted In: Analyst ColorShort SellersShort IdeasEurozoneHedge FundsCommoditiesTop StoriesEconomicsFederal ReserveMarketsAnalyst RatingsTrading IdeasGeneralBrexitDavid EinhornFederal ReserveGoldGreenlight CapitalTianjin Tianhai
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!

Loading...