CONSOL Energy Inc. (CNX), Hewlett Packard Enterprise Co (HPE), Micron Technology, Inc. (MU) and More: Some Key Takeaways From Greenlight Capital’s Q3 Letter

Greenlight Capital‘s Q3 letter is out, and Insider Monkey is here to cover it. For the quarter, Greenlight returned a net 6.2%, versus the S&P 500’s return of 4.5%, with the long portfolio generating a strong absolute return, while the short portfolio generating losses but positive alpha. For the year, Greenlight is up 3.3% in terms of net returns.

In the letter, David Einhorn‘s Greenlight notes that Amazon.com, Inc. (NASDAQ:AMZN) ‘revealed a much lower level of long-term structural profitability’ and yet Amazon.com, Inc. (NASDAQ:AMZN) fell less than one percent during the three months. For the market, apparently the fact that Amazon.com, Inc. can disrupt anyone in retail is good enough.

Similarly, although Tesla Inc (NASDAQ:TSLA) had ‘an awful quarter’, Greenlight notes the stock only fell 6% when it ‘deserved much worse’. Likewise, although competition ‘is heating up’, the market rewarded Netflix, Inc. (NASDAQ:NFLX) with a 21% advance for the period.

As for some other stocks, Greenlight continues to expect the separation between the coal and gas business for CONSOL Energy Inc. (NYSE:CNX) to be completed in 2017, and the fund is ‘surprised that the shares have not re-rated much in anticipation of the event’. Needless to say, Greenlight is pretty bullish on the energy name, particularly in the near term.

In terms of new additions, Greenlight added a new long position in Hewlett Packard Enterprise Co (NYSE:HPE) at an average of $13.29 per share. Greenlight believes Hewlett Packard Enterprise Co (NYSE:HPE) ‘has earnings power of $1.4-$1.70’ over the next few years.

Next, Greenlight re-entered Micron Technology, Inc. (NASDAQ:MU) at around $29.21 per share. Although ‘DRAM will always be cyclical’, Greenlight believes ‘investors are underappreciating the dynamics of the current cycle and the long-term structural improvements in the industry’.

Greenlight also added Tempur Sealy International Inc (NYSE:TPX) at $56.11 for the quarter, writing ‘ we believe the brand strength and customer loyalty.. will allow the company to recapture lost sales through other retailers and direct and online channels’. Greenlight believes Tempur Sealy International Inc (NYSE:TPX) could earn north of $6 per share by the 2019-2020 year.