David Einhorn’s hedge fund smashed the S&P 500 last year. These are 3 stocks he counts on to keep doing better.

  • David Einhorn’s hedge fund crashed the stock market last year, returning 37% of its gains compared to the S&P 500’s nearly 20% loss.
  • In the past year, Greenlight Capital has been successful in selling shares of speculative technology companies and acquiring value-added companies.
  • These are three stocks that Einhorn is bullish on as he looks to continue his gains in 2023.

After years of underperformance, David Einhorn of Greenlight Capital bounced back in 2022.

Einhorn’s $1.4 billion hedge fund returned almost 37% last year, beating the S&P 500’s loss of just under 20%.

In an interview with CNBC this week, Einhorn attributed his success to selling highly speculative and loss-making technology stocks that were popular with retail investors during the COVID-driven stock market boom of 2020 and 2021, and having a long portfolio of boring stocks. -oriented companies.

Some of the Einhorn-owned companies are heavily discounted purchases, and many have become more disciplined about returning cash to shareholders.

These are the three stocks Einhorn owns that were listed as longs in a recent CNBC interview as he looks to continue his outperforming trend into 2023. The data is provided in accordance with SEC documents and as of December 31, 2022.

1. Tenent Healthcare

ER Productions Limited / Getty Images

Ticker: THCPPortfolio Percentage: 2.3%Change in Shares Last Quarter: New Position

Bullish thesis: “Tenent Healthcare is the operator of the hospital. They ran into some problems last year due to a lack of manpower. They missed profits and so on. to the hospital and get sick anyway. And you have a company that is now starting to really return capital to shareholders. I think they have a $1 billion buyback against a $6 billion market cap. So when you see an opportunity like this, we took advantage of a mid-sized position,” Einhorn said.

2. Console Energy

A worker drives a JCB machine to load coal into a freight train at the Amrapali coal mines at Piparwar in the Indian state of Jharkhand April 30, 2022. AFP/Getty Images

Ticker: CEIXPortfolio percentage: 8.2%Last quarter stock change: +99,830 (+5%)

Bullish thesis: “Everyone hates coal, so here is the story. The company is debt-free, worth about $2 billion, and has one analyst covering the company. I think they will have about $800 or $900 million of free cash flow this year. Perhaps the same amount will be again next year. Thus, free cash flow will largely equal the full value of the company between this and next year. They don’t have debt so we expect them to buy back [stock] and return this capital. So in a couple of years we expect to get almost all of our money back. And they will still have 30 years of coal in the ground,” Einhorn said.

3. Resource check

PHOTO: Visitors walk past the logo of mining company Teck Resources Ltd during the PDAC convention in Toronto.

Ticker: TECKPortfolio percentage: 5.9%Last quarter stock change: +72,320 (+3%)

Bullish thesis: “They’re going to buy them [metallurgical] coal business from its steel business. And they did it in a very smart way through a spin-off where most of the cash flow over the next few years will still go to the steel business, even if it comes from the coal business, and I think if we’re going to spend all of this electrification, we will need a lot more copper. And that’s really where metals are part of the business. It’s trading at a not very high single multiple of earnings and I think there will be very little copper supply over the medium term… If we’re going to have all these electric cars, we’re going to need a lot more copper. So I’m optimistic about copper prices in the medium term and I think Teck Resources will benefit from that,” Einhorn said.

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