David Einhorn’s Greenlight Capital Portfolio: Top 5 Stock Picks

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In this article, we discuss the top 5 stock picks of David Einhorn’s Greenlight Capital. If you want to see more of the billionaire’s favorite stocks, click David Einhorn’s Greenlight Capital Portfolio: Top 10 Stock Picks. 

5. Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW)

Greenlight Capital’s Stake Value: $76,708,000

Percentage of Greenlight Capital’s 13F Portfolio: 4.38%

Number of Hedge Fund Holders: 35

Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW) is a New York-based company that provides aircraft and aviation services via its subsidiaries. In Q4 2021, Greenlight Capital owned 815,000 shares of Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW), worth $76.70 million, accounting for 4.38% of the hedge fund’s total 13F portfolio. 

On February 17, Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW) reported earnings for the fourth quarter of 2021. The company posted an EPS of $7.05, beating analysts’ consensus estimates by $0.82. Revenue over the period jumped approximately 25% year-over-year to $1.16 billion, outperforming market forecasts by $59.49 million. 

Wolfe Research analyst Scott Group on April 5 downgraded Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW) to Underperform from Peer Perform.

Among the hedge funds tracked by Insider Monkey, 35 funds were bullish on Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW), up from 27 funds in the preceding quarter. Herbert Frazier’s Hill City Capital owns the biggest stake in the company, with 1.4 million shares worth approximately $135 million. 

Here is what Greenlight Capital has to say about Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW) in its Q2 2021 investor letter:

“Air Freight

COVID caused a dramatic reduction in passenger aviation. Passenger planes often carry freight in their bellies. With planes grounded, capacity came out of the industry. At the same time, freight demand expanded both due to the recovering economy and growing ecommerce, which often emphasizes air shipments. While there has been some recovery in passenger aviation, airlines are emphasizing narrow-body planes, which carry less freight than wide-body planes. Compared to 2019, current air freight demand is about 10% higher and capacity is about 10% lower. The result is that cargo rates have exploded.

Supply will be slow to come on-line. Some passenger planes are being converted to freighters, but conversion capacity for wide-bodies is limited and the aggregate impact of this will be modest. Meanwhile, air freight companies trade at tiny multiples of what investors assume to be peak profits. The implied cost of equity is quite high, which makes it difficult to justify adding assets. As a result, air freight companies are in no rush to order new planes, and in any case, new orders would take several years to build. The result is rates and profits are likely to be higher than expected for quite some time.

We own Atlas Air Worldwide (AAWW), which is poised to benefit. It trades at around 5x this year’s consensus earnings estimates.”

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