Summary
- With a weight of 27.5%, Green Brick Partners is the guru’s largest position.
- Other cyclical consumer stocks he owns include Jack In The Box, Capri Holdings, and The ODP Corp.
Despite being known for his short positions in Tesla Inc. (TSLA, Financial) and Netflix Inc. (NFLX, Financial), Greenlight is a capital leader David Unicorn (Trades, Portfolio) sees a lot of value opportunities in the market.
The New York-based activist investor company, seeking long-term capital appreciation through an intrinsic value approach, invests in companies that have the potential to generate constant returns and secure capital regardless of market conditions.
At the end of the first quarter, consumer discretionary was the largest component of Einhorn’s $ 1.44 billion equity portfolio, with a weighting of 29.77%.
David Einhorn’s portfolio composition by sector.
GuruFocus.com
According to GuruFocus portfolio data, at the end of the three months ended March 31, the Guru’s four consumer staples holdings were Green Brick Partners Inc. (GRBK, Financial), Jack In the Box Inc. (JACK, Financial), Capri Holdings Ltd (CPRI, Finance ) and The ODP Corp. (ODP, finance).
Green Brick Partner
In the first quarter, the investor reduced its stake in Greenbrick Partners (GRBK, Financial) by 27.78% to 17.4 million shares. As his largest holding, the position accounts for 27.5% of the equity portfolio. GuruFocus estimates that Einhorn gained 170.37% of the investment during its lifetime.
Einhorn’s Green Brick Ownership History.
GuruFocus.com
The Plano, Texas-based residential construction company has a market capitalization of $ 1.15 billion; its shares were trading at $ 22.45 on Tuesday, with a price to earnings ratio of 9.33, a price to book ratio of 1.73 and a price to sales ratio of 1.16.
The GF Value Line suggests that the stock is currently significantly overvalued based on historical metrics, past performance and future earnings forecasts.
The GF Value Line for Green Brick Partners.
GuruFocus.com
GuruFocus rated Green Brick’s financial strength 5 out of 10. Although the company has raised approximately $ 97.4 million in new long-term debt over the past three years, the Altman Z-Score of 4.51 indicates that the company is in good standing. The return on invested capital also exceeds the weighted average cost of capital, suggesting that the company creates value as it grows.
The company’s profitability was rated 7 out of 10. While the operating margin is declining, Green Brick has strong returns on equity, asset and capital that outperform the majority of its competitors. It also has a moderate Piotroski F-Score of 5, indicating stable business conditions, as well as a profitability rank of one out of five. According to GuruFocus, companies with this rank achieve an average of 1.1% annually over a period of 10 years.
Of the gurus invested in Green Brick, Einhorn has by far the largest share with 34.34% of the outstanding shares. Diamond Hill Capital Hill (Trading, portfolio), Hotchkis & Wiley, Jim Simons (Trades, Portfolio) ‘Renaissance Technologies, Third Avenue management (Trading, portfolio), John Rogers (Trading, portfolio), Jeremy Grantham (Trades, portfolio) and Caxton employees (Trades, Portfolio) also own the share.
Jumping devil
Einhorn increased its stake in Jack In The Box (JACK, Financial) in the quarter by 48.6% to 179,800 shares, representing 1.37% of the stock portfolio. According to GuruFocus, he has gained an estimated 54.27% on the investment since the second quarter of 2020.
Einhorn’s Jack In The Box Ownership Story.
GuruFocus.com
The San Diego-based fast food restaurant chain has a market capitalization of $ 2.65 billion; its shares were trading at around $ 120.50 on Tuesday with a price to earnings ratio of 17.42 and a price to sales ratio of 2.51.
According to GF Value Line, the share is currently fairly valued.
GF Value Line for Jack In The Box.
GuruFocus.com
The financial strength of Jack In The Box was rated 3 out of 10 by GuruFocus. Despite the poor interest coverage, the Altman Z-Score of 3.02 indicates that the company is well positioned. The ROIC also dwarfs the WACC, which indicates good value creation.
The company’s profitability outperformed 7/10, driven by a growing operating margin, strong returns that beat the majority of industry peers, and a high Piotroski F-Score of 7, suggesting healthy business conditions. Jack In The Box also has a one-star predictability rank.
Simons’ company is the restaurant’s largest guru shareholder with a 1.3% stake. Einhorn holds the second largest stake with 0.81%. Pioneering investments (Trading, portfolio), Hotchkis & Wiley, Louis Moore Bacon (Trading, portfolio), Joel Greenblatt (Trades, portfolio) and Paul Tudor Jones (Trades, Portfolio) also have positions in the stock.
Capri Holdings
The guru took a position in Capri Holdings (CPRI, Financial) during the quarter and bought 191,000 shares. The participation was given 0.68% space in the stock portfolio. GuruFocus data shows that so far, Einhorn has gained an estimated 1.96% in the stock.
The New York-based fashion house, which owns luxury brands such as Michael Kors, Versace, and Jimmy Choo, has a market capitalization of $ 8.06 billion; its shares traded $ 53.74 on Tuesday at a price to book ratio of 3.74 and a price to sales ratio of 1.99.
Based on the GF Value Line, the stock currently appears to be significantly overvalued.
GF Value Line for Capri Holdings.
GuruFocus.com
GuruFocus rated Capri’s financial strength with 4 out of 10 points. Despite adequate interest coverage, the Altman Z-Score of 2.26 suggests the company is under pressure as assets grow faster than revenues.
The company’s profitability did better with a rating of 7 out of 10. Although the operating margin is declining, it outperforms more than half of the competition. Capri also has negative returns that are below average but supported by a moderate Piotroski F-score of 5. While sales per share have declined over the past five years, the fashion house still ranks one-star for predictability.
PRIMECAP administration (Trades, Portfolio) is Capri’s largest guru shareholder with a stake of 2.47%. Steven Cohen (Trading, portfolio), Ray Dalio (Trades, Portfolio), Bacon, Jones, Greenblatt, Lee Ainslie (Trades, Portfolio) and Grantham also own the stock.
ODP Corp.
Einhorn took a stake in ODP (ODP, Financial) with 71,932 shares in the last quarter and allocated 0.22% of the share portfolio to this position. GuruFocus says he has lost an estimated 7.62% of his investment to date.
Headquartered in Boca Raton, Fla., The company is an office supplies and business services retailer with a market capitalization of $ 2.59 billion; its shares were trading at around $ 47.42 on Tuesday, with a price-to-book ratio of 1.31 and a price-to-sell ratio of 0.27.
The GF Value Line indicates that the stock is currently significantly overvalued.
GF Value Line for ODP.
GuruFocus.com
Both the financial strength and profitability of ODP were rated 5 out of 10 by GuruFocus. While the company has adequate interest coverage, the Altman Z-Score of 1.9 suggests the company is under pressure as its Sloan Ratio indicates poor quality earnings.
The retailer also has a falling operating margin and negative returns that lag behind the majority of industry peers. ODP also has a moderate Piotroski F-score of 4, but the one-star predictability rank is on guard due to the decline in sales per share over the past five years.
Of the gurus invested in ODP, Hotchkis & Wiley has the largest share with 4.64% of the shares outstanding. Other top guru shareholders are Simons’ company, Chuck Royce (Trades, Portfolio), Greenblatt and Barrow, Hanley, Mewhinney & Strauss.
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Disclosure
I / we do not have any positions in the stocks mentioned and do not plan to open any positions within the next 72 hours.
source https://dailyhealthynews.ca/david-einhorns-favorite-consumer-cyclical-stocks/
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