In this article, we discuss the 10 stocks under $30 to buy according to David Einhorn’s Greenlight Capital.
David Einhorn, an American hedge fund manager and notable investor, founded Greenlight Capital in 1996, with $900,000 startup capital. The long-short value oriented hedge fund has a portfolio valued at $1.49 billion as of the third quarter of 2021, with a top ten holdings concentration of 73.81%.
Einhorn graduated from Cornell University in 1991 with a Bachelor’s degree, and shortly thereafter founded his own hedge fund. In its initial days, Greenlight Capital’s strategy was to identify weak companies for short selling, and the fund consequently made significant profits by shorting financial firms like Conseco, CompuCredit, Sirrom Capital, and Resource America. Via its affiliates, Greenlight Capital now manages a fund of funds, a private equity fund, and works in the property and casualty reinsurance field.
The third quarter portfolio of David Einhorn’s Greenlight Capital is concentrated in the transports, materials, information technology, finance, and consumer discretionary sectors. The largest holding in Einhorn’s portfolio as of September 2021 is Green Brick Partners, Inc. (NYSE:GRBK), which is a home building and land development company. Einhorn has gone on record to say that holding a significant stake in Green Brick Partners, Inc. (NYSE:GRBK) is a strategic hedge against rising inflation.
David Einhorn, via Greenlight Capital, purchased 9 new stocks in the third quarter, sold out of 22 securities, made additional purchases in 12 companies, and reduced holdings in 13 equities. His top buys for Q3 included iShares Silver Trust (NYSE:SLV), Brighthouse Financial, Inc. (NASDAQ:BHF), and LivaNova PLC (NASDAQ:LIVN), whereas, he reduced holdings in Concentrix Corporation (NASDAQ:CNXC), Joby Aviation, Inc. (NYSE:JOBY), and SPDR S&P 500 ETF Trust (NYSE:SPY), among others.
David Einhorn of Greenlight Capital
The most notable stocks in David Einhorn’s Q3 portfolio include GoPro, Inc. (NASDAQ:GPRO), Twitter, Inc. (NYSE:TWTR), PLBY Group, Inc. (NASDAQ:PLBY), and Victoria’s Secret & Co. (NYSE:VSCO).
Our Methodology
We used the Q3 portfolio of David Einhorn’s Greenlight Capital to select his top 10 stock picks under $30, ranking the stocks according to Einhorn’s stake value in each holding.
Stocks Under $30 to Buy According to David Einhorn’s Greenlight Capital
10. Sonos, Inc. (NASDAQ:SONO)
Greenlight Capital’s Stake Value: $11,769,000
Percentage of Greenlight Capital’s 13F Portfolio: 0.78%
Number of Hedge Fund Holders: 49
Share Price as of December 15: $29.09
Sonos, Inc. (NASDAQ:SONO), an American consumer electronics company known for its multi-room audio products, is one of the top stock picks of David Einhorn priced under $30. David Einhorn, via Greenlight Capital, owns 363,680 shares of Sonos, Inc., worth $11.76 million, representing 0.78% of the hedge fund’s total Q3 investments. David Einhorn increased his stake in Sonos, Inc. by 55% in the third quarter.
In the Q3 earnings published on November 17, Sonos, Inc. posted an EPS of $0.08, missing estimates by $0.02. The revenue increased 5.80% year-over-year to $359.54 million, but missed estimates by $695,390.
Morgan Stanley analyst Katy Huberty on November 18 raised the price target on Sonos, Inc. to $53 from $51 and kept an Overweight rating on the shares, stating that the company’s FY22 revenue growth guidance being 6 points ahead of consensus reinforces Sonos, Inc. as the key consumer hardware idea for 2022.
The largest Sonos, Inc. stakeholder, D E Shaw, increased its position in the company by 20% in Q3 2021, holding 2.30 million shares worth $74.5 million. Overall, 49 hedge funds tracked by Insider Monkey were bullish on Sonos, Inc. at the end of September, up from 47 funds in the preceding quarter.
In addition to GoPro, Inc., Twitter, Inc., PLBY Group, Inc., and Victoria’s Secret & Co., Sonos, Inc. is a notable stock from David Einhorn’s Q3 portfolio.
Here is what Canterbury Tollgate has to say about Sonos, Inc. in its Q3 2021 investor letter:
“The CEO of Sonos says this is the most difficult time he’s seen in the semiconductor space because of the supply chain and port difficulties.xi Considering Sonos is selling more in-home audio equipment than ever, his words aren’t any type of excuse. Ships are anchored out at sea waiting to get into ports, largely due to slow turnaround times because the ports have been operating at 50-70 percent of the labor they need. This should improve in the coming months with more and more people suddenly and simultaneously looking for work.”
9. Graphic Packaging Holding Company (NYSE:GPK)
Greenlight Capital’s Stake Value: $15,846,000
Percentage of Greenlight Capital’s 13F Portfolio: 1.06%
Number of Hedge Fund Holders: 28
Share Price as of December 15: $19.81
Graphic Packaging Holding Company (NYSE:GPK) is a Georgia-based packaging company, offering paperboard and folding cartons for the consumer goods sector, particularly for beverage and food companies. David Einhorn owns 832,270 shares of Graphic Packaging Holding Company as of Q3 2021, worth $15.8 million, representing 1.06% of his total portfolio.
Graphic Packaging Holding Company announced on November 18 a quarterly dividend payable on January 15, valued at $0.075 per share, for shareholders of record on December 15.
In the third quarter earnings report, published on October 26, Graphic Packaging Holding Company posted an EPS of $0.34, beating estimates by $0.03. The quarterly revenue of $1.78 billion missed estimates by $42.49 million.
On November 24, Raymond James analyst Joshua Wilson initiated coverage of Graphic Packaging Holding Company with a Strong Buy rating and a $24.50 price target.
Of the 28 hedge funds that were bullish on Graphic Packaging Holding Company in Q3 2021, Impax Asset Management is the largest stakeholder of the company, with 8.86 million shares worth $167.75 million.
Here is what L1 Capital has to say about Graphic Packaging Holding Company in its Q3 2021 investor letter:
“We reinvested the proceeds from the partial sale of Eagle Materials by increasing the Fund’s position in Graphic Packaging. We expect the company to deliver strong earnings and cash flow over coming years, and the company remains undervalued at its current share price.”
8. EchoStar Corporation (NASDAQ:SATS)
Greenlight Capital’s Stake Value: $26,202,000
Percentage of Greenlight Capital’s 13F Portfolio: 1.75%
Number of Hedge Fund Holders: 25
Share Price as of December 15: $25.83
David Einhorn owns more than 1 million shares of EchoStar Corporation (NASDAQ:SATS), a Colorado-based satellite communication and internet services provider, worth $26.2 million, representing 1.75% of his total Q3 securities.
EchoStar Corporation posted its Q3 results on November 9. The company reported earnings per share of $0.40, surpassing estimates by $0.04. The revenue increased 6.58% year-over-year, totaling $504.66 million, beating estimates by $10.81 million.
At the end of September, 25 hedge funds in the database of Insider Monkey reported owning stakes in EchoStar Corporation, worth $241.6 million. This is compared to 26 funds being bullish on the stock in Q2, with stakes amounting to $246.5 million.
Jim Simons’ Renaissance Technologies is the biggest EchoStar Corporation stakeholder as of the third quarter, holding 2.20 million shares worth $56.2 million.
Priced at $25.83 on December 15, EchoStar Corporation is one of the best stocks under $30 to buy according to David Einhorn’s Greenlight Capital.
7. Resideo Technologies, Inc. (NYSE:REZI)
Greenlight Capital’s Stake Value: $33,840,000
Percentage of Greenlight Capital’s 13F Portfolio: 2.26%
Number of Hedge Fund Holders: 28
Share Price as of December 15: $24.72
Resideo Technologies, Inc. (NYSE:REZI) is a company offering home security and residential thermal products including temperature and humidity control, thermal water and air solutions, security panels, sensors, video cameras, awareness solutions, cloud infrastructure, and related software.
David Einhorn’s Greenlight Capital owns 1.36 million Resideo Technologies, Inc. shares, worth $33.84 million in the third quarter, representing 2.26% of the firm’s total investments.
In the third quarter earnings report, announced on November 4, Resideo Technologies, Inc. posted an EPS of $0.46, exceeding estimates by $0.02. The $1.50 billion revenue for Q3 missed estimates by $26.40 million.
Morgan Stanley analyst Erik Woodring on October 6 lowered the price target on Resideo Technologies, Inc. to $31 from $33 and kept an Equal Weight rating on the shares, as part of the firm’s downgrade of their IT hardware industry view to Cautious.
28 hedge funds in the Q3 database of 867 elite funds tracked by Insider Monkey were long Resideo Technologies, Inc., with total stakes worth $525.8 million. The largest stakeholder of Resideo Technologies, Inc. is Praesidium Investment Management Company, with 7.36 million shares worth $182.5 million.
In addition to GoPro, Inc., Twitter, Inc., PLBY Group, Inc., and Victoria’s Secret & Co., Resideo Technologies, Inc. is a notable stock from David Einhorn’s Q3 portfolio.
6. GoPro, Inc. (NASDAQ:GPRO)
Greenlight Capital’s Stake Value: $34,303,000
Percentage of Greenlight Capital’s 13F Portfolio: 2.30%
Number of Hedge Fund Holders: 31
Share Price as of December 15: $10.62
An American technology company with a product portfolio including action cameras, mobile applications, and video-editing software, GoPro, Inc. is one of the best stocks under $30 to buy according to David Einhorn’s Greenlight Capital, priced at $10.62 as of December 15.
Greenlight Capital owns 3.66 million GoPro, Inc. shares as of September this year, valued at $34.3 million, accounting for 2.30% of the firm’s total investments.
Publishing its third quarter earnings on November 4, GoPro, Inc. posted an EPS of $0.34, beating estimates by $0.14. The $316.67 million revenue jumped 12.89% year-over-year, outperforming estimates by $24.58 million.
Wedbush analyst Alicia Reese upgraded GoPro, Inc. on December 13 to Outperform from Neutral with a price target of $13.50, up from $11, as she believes multiple drivers are firmly in place for GoPro, Inc. to drive margin growth in the coming quarters.
Out of the 867 hedge funds monitored by Insider Monkey in the third quarter, 31 funds were long GoPro, Inc., up from 28 funds in the prior quarter. Michael Zimmerman’s Prentice Capital Management is the largest GoPro, Inc. shareholder from Q3, increasing its stake in the company by 8%, holding 6.82 million shares worth $63.8 million.
Here is what Roubaix Capital has to say about GoPro, Inc. in their Q4 2020 investor letter:
“Companies like GoPro (GPRO) should benefit from the consumer rebound, but also have their own unique drivers of value over the next 2+ years. In the case of GPRO, the company launched its newest action camera, the GoPro9, under the umbrella of a new business model. The company offers a discount on the camera when customers purchase a subscription agreement that comes with additional services and benefits. The uptake of the subscription has been strong to date and offers the company a line of sight to a higher margin and more predictable revenue stream. The stock’s low double digit earnings multiple remains undemanding. We have seen this type of transformation play out in numerous situations in software, hardware and even retail companies such as RH. We see GPRO following suit and expect a return to travel later this year to be another reason for consumers to buy a new camera as they head back out on vacation.”
5. Danimer Scientific, Inc. (NYSE:DNMR)
Greenlight Capital’s Stake Value: $38,532,000
Percentage of Greenlight Capital’s 13F Portfolio: 2.58%
Number of Hedge Fund Holders: 21
Share Price as of December 15: $10.89
Danimer Scientific, Inc. (NYSE:DNMR), a Georgia-based biopolymer manufacturer, is one of the best stocks under $30 to invest in according to Greenlight Capital’s David Einhorn. Einhorn, as of Q3 2021, holds 2.35 million Danimer Scientific, Inc. shares, worth $38.5 million. The stock accounts for 2.58% of David Einhorn’s total investments in the third quarter.
On November 15, Danimer Scientific, Inc. announced its Q3 results, reporting a loss per share of $0.15, missing estimates by $0.06. The quarterly revenue totaled $13.37 million, missing estimated revenue by $1.20 million.
As per the Q3 database of Insider Monkey, 21 hedge funds were bullish on Danimer Scientific, Inc., with stakes equaling $153 million. This is compared to 30 funds holding stakes worth $309.5 million in Danimer Scientific, Inc. in the preceding quarter.
Here is what Nelson Capital Management has to say about Danimer Scientific, Inc. in its Q1 2021 investor letter:
“In the materials sector, we bought Danimer Scientific (tkr: DNMR), a next-generation bioplastics company offering completely biodegradable plastics that break down in virtually any environment.
While essential to modern life, plastic products are an ongoing environmental concern due to their longevity and therefore the pollution that results. Despite nationwide efforts to recycle plastics, only 8.5% of plastics waste in t he U .S. is being recycled, according to a study by the U.S. Environmental Protection Agency. Danimer Scientific (t k r: DNMR) has developed a method to make plastic products that are 100% biodegradable and compostable without compromising on functionality. The company sells its PHA- based plastics under the brand name Nodax and is currently the only viable commercial-scale offering.
Danimer uses canola oil to create 100% biodegradable and compostable biopolymer, PHA, through a completely waste-free process. PH A biodegrades in both anaerobic (without oxygen) and aerobic (with oxygen) environments, and unlike other biodegradable plastics, it does not need heat, moisture, or an industrial composting plant to break down. PHA-based plastics can effectively biodegrade in a waste treatment facility, the ocean, or even in home compost piles within 12-18 weeks after the product is discarded.
PHA plastics are versatile, adaptable and heat and UV-resistant. They have been FDA approved for food contact and are comparable in functionality to many products produced using petrochemicals. The formula can be customized to create many types of plastic resins for a multitude of purposes. The range of applications for products made with PH A is enormous and includes straws, cups, lids, bottles, produce bags, shopping bags, utensils, diaper linings, plates, wipes, toys, trash bags, seals, labels, glues and much more.
Danimer went public in late 2020 via Special Purpose Acquisition Company (SPAC). As a newly public company, Danimer’s stock price tends to be rather volatile, but we bought a small position for the long-term opportunities it offers. Dem and for PHA plastics is likely to accelerate over the next several years as corporations and the public become increasingly concerned about the environmental impact of wrappers from consumer- packaged goods. More government regulation of single- use plastics has pressured large corporations to adapt. Additionally, the Biden administration has a strong emphasis on climate change and sustainability which will provide a near- to-mid-term tailwind for Danimer. As the leading PHA innovator with over 125 patents across 20 countries, Danimer is well-positioned to benefit from these trends.”
4. CONSOL Energy Inc. (NYSE:CEIX)
Greenlight Capital’s Stake Value: $55,137,000
Percentage of Greenlight Capital’s 13F Portfolio: 3.69%
Number of Hedge Fund Holders: 15
Share Price as of December 15: $20.67
CONSOL Energy Inc. (NYSE:CEIX) is an American energy company from Pennsylvania that is primarily focused on coal mining and natural gas, via its subsidiaries. B. Riley analyst Lucas Pipes on October 4 raised the price target on CONSOL Energy Inc. to $35 from $24 and kept a Buy rating on the shares, citing rising natural gas prices in North America.
David Einhorn, via Greenlight Capital, owns 2.11 million shares of CONSOL Energy Inc. as of the third quarter, worth $55.1 million, representing 3.69% of the firm’s total investments.
CONSOL Energy Inc., on November 2, published its Q3 earnings. The company reported a loss per share of $0.14, missing estimates by $0.78.
Encompass Capital Advisors is one of the leading CONSOL Energy Inc. stakeholders from Q3, with 568,581 shares worth $14.79 million. CONSOL Energy Inc. is a new addition in the firm’s third quarter portfolio. Overall, 15 hedge funds monitored by Insider Monkey were long CONSOL Energy Inc., up from 13 funds in the preceding quarter.
Here is what Greenlight Capital has to say about CONSOL Energy Inc. in its Q2 2021 investor letter:
“Thermal Coal and Natural Gas
ESG investing is inflationary, as green energy is simply more expensive than hydrocarbons. Hydrocarbon energy companies are starved for capital and are being told to change their ways. The result is less exploration and drilling. Even with benchmark oil prices surging over the last year, companies are loath to drill more. Normally, the cure for high prices is high prices. With ESG in the proverbial driver’s seat, we might need much higher prices still in order to increase investment to meet demand.
There is almost nothing less popular than thermal coal. From 2011 to 2020, U.S. coal production declined by 51%. U.S. demand has fallen as we’ve shifted to alternative sources of electricity. As unpopular as coal is though, it still makes up about 20% of U.S. electricity generation. Globally, coal demand is growing modestly as China and India add power generation capacity faster than the West is reducing it. Even so, reduced oil and gas drilling has caused natural gas prices to advance and coal prices are following. Seaborne thermal coal prices are up 140% year-over-year and at the highest levels since 2011, and Northern Appalachia thermal coal prices are catching up, rising 23% in the last month alone.
We own CONSOL Energy (CEIX), the lowest cost, most efficient miner in Appalachia, which is poised to benefit from rising coal prices. It trades at 12x consensus earnings estimates that look stale to us, as they do not reflect recent coal price gains.”
3. Change Healthcare Inc. (NASDAQ:CHNG)
Greenlight Capital’s Stake Value: $75,108,000
Percentage of Greenlight Capital’s 13F Portfolio: 5.03%
Number of Hedge Fund Holders: 50
Share Price as of December 15: $20.83
Greenlight Capital’s $75.1 million position in Change Healthcare Inc. (NASDAQ:CHNG) represents 5.03% of the hedge fund’s total investments from the third quarter. Change Healthcare Inc. is a company offering data analytics and data transfer between customers and service providers, to enable improved workflows, assist administrative and financial efficiencies, and refine clinical decisions.
Earnings for the quarter ending September were published by Change Healthcare Inc. on November 3. The company reported an EPS of $0.35, beating estimates by $0.35. The revenue jumped 9.37% from the prior year quarter to $826.76 million, but missed estimates by $6.33 million.
50 funds reported owning stakes in Change Healthcare Inc. in Q3 2021, down from 51 funds in the preceding quarter. Abrams Capital Management is the biggest Change Healthcare Inc. stakeholder, with 16.9 million shares worth $355.5 million.
2. Teck Resources Limited (NYSE:TECK)
Greenlight Capital’s Stake Value: $112,789,000
Percentage of Greenlight Capital’s 13F Portfolio: 7.56%
Number of Hedge Fund Holders: 41
Share Price as of December 15: $26.90
Teck Resources Limited (NYSE:TECK) is a Canadian company specializing in mineral development and mining, offering zinc, lead, silver, coal, gold, and copper, among other minerals and natural resources. Greenlight Capital holds an $112.78 million stake in Teck Resources Limited, which represents 7.56% of the hedge fund’s total Q3 investments.
In the third quarter, 41 hedge funds were long Teck Resources Limited, with total stakes equaling $1.31 billion. Jacob Mitchell’s Antipodes Partners is the biggest stakeholder of Teck Resources Limited from the third quarter, with 7.2 million shares worth $179.65 million.
Stifel analyst Alex Terentiew on December 13 initiated coverage of Teck Resources Limited with a Buy rating and a C$50 price target. Stating that Teck Resources Limited is an underappreciated stock, the analyst kept a long-term bullish outlook for copper, observing that Teck Resources Limited’s copper-focused growth profile and the current “exceptional price strength in coking coal” has created an ideal scenario for Teck Resources Limited.
Announcing on October 27 its Q3 results, Teck Resources Limited posted earnings per share of $1.52, beating estimates by $0.34. Revenue for the quarter came in at $3.21 billion, up 84.60% year-over-year, outperforming estimated revenue by $268.89 million.
1. Green Brick Partners, Inc. (NYSE:GRBK)
Greenlight Capital’s Stake Value: $357,431,000
Percentage of Greenlight Capital’s 13F Portfolio: 23.96%
Number of Hedge Fund Holders: 16
Share Price as of December 15: $29.59
Green Brick Partners, Inc. ranks first on our list of the best stocks under $30 to buy according to David Einhorn’s Greenlight Capital. Green Brick Partners, Inc. is a new arrival in David Einhorn’s Q3 portfolio, and is the largest holding of the hedge fund manager, which represents 23.96% of his total investments. Einhorn, via Greenlight Capital, holds a $357.4 million stake in Green Brick Partners, Inc., which is a Texas-based diversified land development and home building company.
The third quarter earnings were published on November 2 by Green Brick Partners, Inc.. The company reported earnings per share of $0.95, missing estimates by $0.10.
Keeping a constructive stance on the homebuilding sector, JPMorgan analyst Michael Rehaut downgraded Green Brick Partners, Inc. to Neutral from Overweight with a price target of $28, down from $32 on October 14.
16 hedge funds in the third quarter database of Insider Monkey were bullish on Green Brick Partners, Inc., up from 14 funds in the preceding quarter. Springbok Capital is a prominent stakeholder of Green Brick Partners, Inc. as of September this year, with 850,681 shares worth $17.45 million.
Here is what Diamond Hill Small Cap Fund has to say about Green Brick Partners, Inc. in its Q3 2021 investor letter:
“Homebuilder Green Brick Partners has benefited from strong housing demand leading to higher prices. However, rising interest rates, as we saw in Q3, tend to be an industry-wide headwind, just as supply chain challenges delayed home closings, pushing back revenue to later quarters. Longer term, our thesis on Green Brick remains unchanged. We believe it is one of the best positioned small-cap housing companies, with attractive real estate, a strong balance sheet and a strong, shareholder-aligned management team that has been a wise allocator of capital.”
You can also take a look at 10 High Dividend Stocks with Over 12% Yield and 10 Best Stocks to Buy for the Next 10 Years.
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This article is originally published at Insider Monkey.
