In this article, we discuss the top 5 small-cap stocks to buy according to David Einhorn’s Greenlight Capital. If you want our detailed analysis of these stocks, go directly to 10 Small-Cap Stocks to Buy According to David Einhorn’s Greenlight Capital.
5. 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
Market Capitalization as of December 4: $1.541 billion
An American tech company manufacturing and marketing action cameras, video editing software, and mobile applications, GoPro, Inc. (NASDAQ:GPRO) is one of the top small-cap stocks in Einhorn’s portfolio for the third quarter. Greenlight Capital owns 3.66 million GoPro, Inc. (NASDAQ:GPRO) shares, worth $34.3 million, representing 2.3% of the firm’s total investments.
At the end of September, 31 hedge funds reported owning stakes in GoPro, Inc. (NASDAQ:GPRO), worth over $293 million. This is compared to 28 funds being bullish on GoPro, Inc. (NASDAQ:GPRO) in the preceding quarter, with total stakes amounting to $413.7 million. Michael Zimmerman’s Prentice Capital Management is the largest shareholder of the company, with a position worth approximately $64 million.
On November 4, GoPro, Inc. (NASDAQ:GPRO) reported its Q3 results, posting an EPS of $0.34, beating estimates by $0.14. The revenue equaled $316.67 million, up 12.89% from the prior-year quarter, outperforming estimates by $24.58 million.
JPMorgan analyst Paul Chung on November 18 upgraded GoPro, Inc. (NASDAQ:GPRO) to Overweight from Neutral with a price target of $15, up from $13, citing price increases, strong strategic execution, and a high subscriber count.
“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.”