Greenlight Capital Investor Letter: Q2 Performance and Highlights

CONSOL Energy Inc. (NYSE:CNX) – Significant Winner in Greenlight’s Portfolio

– Shares owned by Greenlight Capital as of March 31: 29.61 Million

– Value of Greenlight Capital’s holding as of March 31: $334.29 Million

CONSOL Energy Inc. (NYSE:CNX) was the sixth-largest position in Greenlight Capital’s portfolio at the end of the March quarter, accounting for 5.7% of the entire value of the portfolio. CONSOL Energy was one of the hedge fund’s biggest winners in the second quarter, along with gold and gold stocks, with the stock gaining 43% during the three-month period. The diversified energy producer in the Appalachian Basin, producing both natural gas and high-BTU coal, has seen the value of its stock skyrocket by 132% since the beginning of the year, reflecting “a partial recovery in natural gas prices and continued strong well performance”. Although the aforementioned letter does not state whether Greenlight Capital reduced or increased its stake in CONSOL Energy during the second quarter, the CONSOL position was the third-largest long position in the firm’s portfolio. In early June, Mr. Einhorn’s firm reported the sale of exactly 7.0 million shares at $15.01 apiece, cutting its overall holding to 22.44 million shares. Mason Hawkins’ Southeastern Asset Management was the owner of 52.15 million shares of CONSOL Energy Inc. (NYSE:CNX) at the end of March.

Greenlight Reiterates Bullish Thesis on Chemours Co (NYSE:CC)

– Shares owned by Greenlight Capital as of March 31: 8.84 Million

– Value of Greenlight Capital’s holding as of March 31: $61.90 Million

The multi-billion-dollar asset manager upped its stake in Chemours Co (NYSE:CC) by 5.44 million shares during the March quarter to 8.84 million shares. The upped stake was valued at $61.90 million at the end of the quarter. In the freshly-revealed letter to investor, Greenlight Capital said chemicals company Chemours “should benefit from the continued recovery of TiO2 [titanium dioxide used in the food and cosmetic industries] prices” despite being attacked by short sellers. In June, prominent short-seller Andrew Left published a report saying that the company was “set up for bankruptcy” due to legal issues related to a discontinued product, putting pressure on stock performance that enabled Greenlight Capital to boost its stake in Chemours. Greenlight Capital rebuffed the short-seller’s analysis that Chemours was designed for bankruptcy, saying that the former parent company of the chemicals company remained the primary defendant in all the litigation related to the manufacturing of a chemical called C8 or PFOA. Chemours shares are up 73% so far in 2016 and could go higher as “investors refocus on the earnings power of the business”.