We recently published an article titled Billionaire David Einhorn’s 10 Stock Picks with Huge Upside Potential. In this article, we are going to take a look at where Roivant Sciences Ltd. (NASDAQ:ROIV) stands against David Einhorn’s other stock picks with huge upside potential.
David Einhorn is a widely renowned hedge fund manager who co-founded Greenlight Capital in 1996. The billionaire graduated from Cornell University and gained experience in the hedge fund industry under the tutelage of Gary Siegler and Peter Collery at the SC Fundamental Value Fund. Einhorn rose to prominence in 2002, when he successfully questioned the accounting practices of Allied Capital, a private equity firm, and disclosed having a short position at the Sohn Investment Conference. The stock plummeted, sparking a heated exchange of claims between Allied and Einhorn. A five-year-long inquiry by the United States Securities and Exchange Commission (SEC) confirmed Einhorn’s claim, revealing that Allied did breach accounting rules related to securities laws.
Greenlight Capital focuses on value-oriented initiatives. The investment management firm’s primary concentration lies in long and short positions in listed equity securities. This strategy allows Einhorn to navigate both rising and falling markets, giving him flexibility during periods of uncertainty.
Greenlight Capital gained 8.2% in the first three months of 2025, boosted by a gold bet that it believes will pay out further as Trump administration policies continue to shake the economy. In a letter to clients, the firm stated that the precious metal was “by far the biggest winner” in their portfolio, increasing 19%. Gold is frequently used as an inflation hedge, and Greenlight believes the White House’s policies would only worsen inflation. “All current Administration policy roads lead to higher longer-term inflation.” the letter added. Greenlight reasoned that slower growth would push the US Federal Reserve to drop interest rates more than markets anticipate. As a countermeasure, the fund acquired a stake in SOFR futures (secured overnight financing rate), while also including tail protection in case the dollar falls significantly compared to the euro and yen.
Another aspect of the Greenlight letter was the assertion that the US equities market is in the early stages of a bear market. To that end, the firm was able to determine precisely when to opt out of its equity holdings. According to the firm’s letter:
“Bear markets do not go straight down. They are punctuated with ‘rip-your-face-off’ rallies based on big headlines, extreme investor sentiment, and experience that buying the dip usually pays off.”
Our Methodology
For this article, we examined Greenlight Capital’s Q4 2024 13F filings to list down billionaire David Einhorn’s stock picks with the highest upside potential. We ranked the companies in ascending order of their upside potential. These equities are also popular among elite hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A research scientist in a lab coat examining a sample of blood for sickle cell diseases.
Roivant Sciences Ltd. (NASDAQ:ROIV)
Greenlight Capital’s Q4 Stake: $62.3 million
Analyst Upside as of April 30: 291.59%
Number of Hedge Fund Holders: 44
Roivant Sciences Ltd. (NASDAQ:ROIV) is a commercial-stage biopharmaceutical company that is dedicated to developing and commercializing treatments for inflammation and immunology.
On April 22, H.C. Wainwright reaffirmed Roivant Sciences Ltd. (NASDAQ:ROIV)’s Buy rating and $18 price target. The company’s management structure recently experienced substantial changes, coinciding with Roivant’s decision to include Sjögren’s disease (SJD) and cutaneous lupus erythematosus (CLE) as the fifth and sixth indications for its investigative medication, IMVT-1402.
Roivant Sciences Ltd. (NASDAQ:ROIV) published earnings for the third quarter of 2024 on February 10, which came above analysts’ expectations. The company’s net income was $118.1 million, compared to $5.1 billion in the same period last year. The drop was primarily due to the absence of a gain on the sale of Telavant net assets, which contributed considerably to the previous year’s revenue. Revenue for the quarter was $9.0 million, a decrease from $15.6 million in the prior year. Operating expenses also rose to $283.4 million from $236.5 million, owing to increasing R&D and general and administrative costs.
Tourlite Capital Management, an investment management firm, released a Q4 2024 investor letter. Here is what the fund said:
“We continue to believe Roivant Sciences Ltd. (NASDAQ:ROIV) offers an attractive risk reward and multiple ways to win. Excluding Roivant’s cash balance and Immunovant (IMVT) stake, the remainder of Roivant (ROIV stub) is valued at less than $2 per share. We believe Roivant’s stake in Arbutus and its exposure to the LNP litigation could alone be worth up to $4. In addition to ROIV, we remain shareholders in Arbutus.”
Overall ROIV ranks 1st on our list of David Einhorn’s stock picks with huge upside potential. While we acknowledge the potential for ROIV as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than ROIV but trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks to Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.