Greenlight Capital, an investment management firm, published its first-quarter 2022 investor letter – a copy of which can be downloaded here. The Greenlight Capital funds (the “Partnerships”) returned 4.4%1 in the first quarter of 2022, compared to a 4.6% decline for the S&P 500 index. Try to spend some time taking a look at the fund’s top 5 holdings to be informed about their best picks for 2022.
In its Q1 2022 investor letter, Greenlight Capital mentioned Green Brick Partners, Inc. (NYSE:GRBK) and explained its insights for the company. Founded in 2006, Green Brick Partners, Inc. (NYSE:GRBK) is a Plano, Texas-based operative builders company with a $1.0 billion market capitalization. Green Brick Partners, Inc. (NYSE:GRBK) delivered a -32.77% return since the beginning of the year, while its 12-month returns are down by -16.09%. The stock closed at $20.39 per share on April 20, 2022.
Here is what Greenlight Capital has to say about Green Brick Partners, Inc. (NYSE:GRBK) in its Q1 2022 investor letter:
“For the quarter, our long portfolio lost 7%, which was almost completely offset by gains on our shorts and index hedges. Macro, led by inflation swaps and gold, generated slightly more than all the return. The long portfolio attribution bifurcated into Green Brick Partners (GRBK), which fell sharply and was responsible for much more than all the loss, and pretty much everything else, which did quite well..
..Despite the fact that there was nothing wrong with GRBK’s corporate performance, the shares fell from $30.33 to $19.76 during the quarter. Analysts reduced 2022 and 2023 EPS expectations by about 2%, leaving the shares at 4.7x and 4.3x those estimates. The problem was with the sector, as most homebuilders fell by similar percentages.
Homebuilding stocks de-rated as a consensus formed around a pending collapse in housing. The narrative is that house prices have risen, interest rates (and therefore mortgage rates) are rising, sales and housing starts are slowing, inventories are building, and cancellations are rising. Supposedly, this implies that house prices are about to collapse, leaving homebuilders in a precarious position. Everyone remembers what happened when the last housing bubble popped. The market appears to be saying that it is about to happen again and that the sector is now un-investable at pretty much any valuation… ” (Click here to see the full text)
Our calculations show that Green Brick Partners, Inc. (NYSE:GRBK) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Green Brick Partners, Inc. (NYSE:GRBK) was in 12 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 16 funds in the previous quarter. Green Brick Partners, Inc. (NYSE:GRBK) delivered a -14.58% return in the past 3 months.
In April 2022, we also shared another hedge fund’s views on Green Brick Partners, Inc. (NYSE:GRBK) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.
Disclosure: None. This article is originally published at Insider Monkey.