David Einhorn's Hedge Fund Picks 3 Stocks He Is Bullish on for 2023

August 12, 2024

David Einhorn's hedge fund crushed the stock market last year, returning 37% compared to the S&P 500's loss of almost 20%.
Greenlight Capital found success in shorting speculative tech stocks and owning value-oriented companies last year.
These are three stocks Einhorn is bullish on as he seeks to continue his outperformance in 2023.

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After a multi-year stretch of underperformance, Greenlight Capital's David Einhorn bounced back with a vengeance in 2022.

Einhorn's $1.4 billion hedge fund delivered a return of nearly 37% last year, trouncing the S&P 500's loss of just under 20%.

In an interview with CNBC this week, Einhorn attributed his outperformance to shorting highly speculative and unprofitable tech stocks that were popular with retail investors during the COVID-induced stock market boom of 2020 and 2021, as well as owning a long portfolio of boring, value-oriented companies.

Some of the companies Einhorn owns represent deep discount buys, with many getting more disciplined about returning cash to shareholders.

These are the three stocks Einhorn owns and pitched as long positions in a recent CNBC interview, as he seeks to continue his trend of outperformance in 2023. The data is according to SEC filings and as of December 31, 2022.

1. Tenent Healthcare

ER Productions Limited/Getty Images

Ticker: THC
Percentage of portfolio: 2.3%
Change in shares last quarter: New position

Bullish thesis: "Tenent Healthcare is a hospital operator. They ran into some trouble last year with labor shortages. They missed earnings and so forth. We saw that the multiple is in the single digits, the business appears to be relatively stable and recession resistant. People go to the hospital and get sick either way. And you have a company that's now beginning to really return capital to shareholders. I think they have a $1 billion buyback against a $6 billion market cap. So when you see that kind of opportunity, we took a medium sized position," Einhorn said.

2. Consol Energy

A worker operates a JCB machine to load coal onto a goods train at the Amrapali coal mines in Peeparwar in India's Jharkhand state on April 30, 2022. AFP/Getty Images

Ticker: CEIX
Percentage of portfolio: 8.2%
Change in shares last quarter: +99,830 (+5%)

Bullish thesis: "Everybody hates coal, so here's the story. The company has no debt, it's worth about $2 billion, there's one analyst who covers the company. I think they're going to have about $800 or $900 million of free cash flow this year. Possibly the same amount again the following year. So pretty much the free cash flow is going to equal the whole value of the company between this year and next year. They have no debt, so we expect they're going to be buying back [stock] and returning that capital. So within a couple years we expect to get pretty much all of our money back. And they'll still have 30 years of reserves of coal in the ground," Einhorn said.

3. Teck Resources

FILE PHOTO: Visitors pass a logo of Teck Resources Ltd mining company during the PDAC convention in Toronto Reuters

Ticker: TECK
Percentage of portfolio: 5.9%
Change in shares last quarter: +72,320 (+3%)

Bullish thesis: "They're going to buy their [metallurgical] coal business from their metals business. And they did it through a spinoff in a really clever way, where most of the cash flows for the next number of years are still going to go to the metal business even though they're going to come from the met coal business, and I think if we're going to have all of this electrification, we're going to need a lot more copper. And that's really where the metals piece of the business is. It trades at a not exciting high single digit multiple of earnings, and I think that there's very little copper supply coming on in the intermediate term... If we're going to have all of these electric vehicles, we're going to need a lot more copper. So I'm really bullish on copper prices over the intermediate-term and I think Teck Resources will be a good beneficiary of that," Einhorn said.

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