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A Look At David Einhorn's Recent Short Calls

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A Look At David Einhorn's Recent Short Calls

Greenlight Capital’s David Einhorn is at it again. The firm’s founder and managing partner is known for his short calls, and he added Core Laboratories N.V. (NYSE: CLB) to the ever-lengthening list.

"Core's earnings will disappoint over the next few years," Einhorn said Monday at the Sohn Investment Conference in New York. "Core's business is not a secular growth story."

Referencing the company’s offshore exposure and dependence on oil price recovery, Einhorn predicted a 45-percent downside in share price, from a price of $116 to a fair value of $62.

Investors immediately reacted, sending the stock plummeting 9.2 percent between Monday afternoon and Tuesday morning. But is he prescient enough to bet on?

A Closer Look

In the last decade, Einhorn has taken a number of short positions, including United States Steel Corporation (NYSE: X), Mallinckrodt PLC (NYSE: MNK), Lululemon Athletica inc. (NASDAQ: LULU), Chipotle Mexican Grill, Inc. (NYSE: CMG), Netflix, Inc. (NASDAQ: NFLX) and Under Armour Inc (NYSE: UAA). Outcomes are mixed.

Einhorn’s Shorts

In July 2007, he shorted Lehman Brothers Holdings Inc., which went on to declare bankruptcy 14 months later.

Then there was Keurig Green Mountain Inc (NASDAQ: GMCR), which he advised shorting in 2011 at the Value Investing Congress and again in October 2015. The first position was ultimately unsuccessful, but his latest thesis proved prophetic. While it initially secured a 49-percent gain, a late 2015 announcement of a JAB Holding takeover sent the stock soaring to $88.89, leaving Einhorn with a much smaller profit.

In November 2014, his third-quarter investor letter announced an Amazon.com, Inc. (NASDAQ: AMZN) short, which failed significantly as the company went on to be one of the top S&P 500 performers of 2015. Einhorn suffered similar losses with mid-2016 Amazon short.

His most recent short, Caterpillar Inc. (NYSE: CAT), isn’t doing well, either. Since the announcement in a January 2017 shareholder letter, Caterpillar has risen 5.2 percent. However, Einhorn suggested the stock wouldn’t “hit bottom” until 2018.

Related Links:

David Einhorn’s Letter To Greenlight Investors Reveals New Perrigo Position

Like He Did With Apple, David Einhorn Wants GM To Create 2 Share Classes

Posted-In: David EinhornAnalyst Color Short Ideas Hedge Funds Top Stories Analyst Ratings Trading Ideas General Best of Benzinga

 

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