David Einhorn’s Greenlight Buys DXC and Boosts 2 Holdings in the 4th Quarter


<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "David Einhorn (crafts, Wallet), president of Greenlight Capital, revealed this week that his hedge fund had established a position in DXC Technology Co. (NYSE: DXC) and increased its stakes in The Chemours Co. (NYSE: CC) and EchoStar Corp. (NASDAQ: SATS). "data-reactid =" 11 "> David Einhorn (Trades, Portfolio), president of Greenlight Capital, revealed this week that his hedge fund had established a position in DXC Technology Co. (NYSE: DXC) and increased its holdings in The Chemours Co. (NYSE: CC) and EchoStar Corp. (NASDAQ: SATS).

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Short position gains reduce otherwise strong long position gains"data-reactid =" 18 ">Short position gains reduce otherwise strong long position gains

The Einhorn fund mentioned in its quarterly letter that it had posted a return of 13.80% in 2019, which is lower than the performance of the Standard & Poor's 500 index. 31.50%. While the long positions posted a return of 37.40%, outperforming the benchmark, the short positions posted a return of -20.10%, thereby cutting the significant gains from the long positions.

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<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Greenlight detailed in the letter its short position in Netflix Inc. (NASDAQ: NFLX), a company that skyrockets on January 21, pushed by a beat gains which overshadowed the slow growth in the national workforce. The fund said the story of the Los Gatos, California-based company's "open growth story" ends as several other subscription services enter the fray. "Data-reactid =" 33 "> Greenlight detailed in the letter its short position on Netflix Inc. (NASDAQ: NFLX), a company that soared on January 21, driven by a profit beat that overshadowed the weak growth in the national workforce, ending when several other subscription services enter the fray.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Portfolio overview"data-reactid =" 34 ">Portfolio overview

At the end of the quarter, Greenlight's $ 1.35 billion share portfolio contains 18 stocks, with sales of 3%. The three main sectors in terms of weight are cyclical consumption, industry and financial services, with weights of 45.20%, 14.60% and 10.40%.

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<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "New purchase: DXC"data-reactid =" 56 ">New purchase: DXC

Greenlight purchased 813,000 shares of DXC, giving the position a 2.27% weighting in the equity portfolio. Stocks averaged $ 32.83 during the quarter.

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The Tyson, Virginia-based company combines the business services segment of Hewlett Packard Enterprise Co. (NYSE: HPE) with Computer Sciences Corp. GuruFocus ranks DXC profitability 6 out of 10: Ebitda's three-year revenues and growth rates outperform 68% and 77% of global competitors, even if operating margins only outperform 55.68% of global IT service companies.

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Greenlight said in his letter that many of the challenges of DXC, which stemmed from a "difficult post-merger period" and resulted in lower earnings expectations for the next two years, can be resolved. The letter further indicates that field research indicates that "improvement is in progress" and that the price does not reflect improvements.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Chemours"data-reactid =" 100 ">Chemours

Greenlight bought 327,402 shares in Chemours, increasing the stake by 5.05% and the share portfolio by 0.44%. Stocks averaged $ 16.67 during the quarter.

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The Wilmington, Delaware company produces titanium dioxide, a white pigment used in paint. GuruFocus Ranks Company Profitability 7 Out Of 10: Even While Revenue Growth Rate Of 4.8% Over Three Years Underperform 55.88% Of Global Competitors, Chemours Has Operating Margin expanding and a return on equity that exceeds 96% of global chemical companies.

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The fund said in its letter that the titanium dioxide cycle "was becoming more favorable" and that Chemours was "on the verge of recovering the lost share".

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Greenlight purchased 84,900 shares of EchoStar, increasing the position by 14.34% and the equity portfolio by 0.27%. Stocks averaged $ 40.24 during the quarter.

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The Englewood, Colorado-based company provides broadband technologies and video streaming solutions for the home and office. GuruFocus ranks the company's profitability 6 out of 10: operating margins outperform more than 81% of global competitors despite returns below 70% of global communications equipment companies.

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Disclosure: No positions.

Learn more here:

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  • Andreas Halvorsen's top 5 purchases in the 4th quarter
  • Ray Dalio Bridgewater Buys Buffett Banks in 4th Quarter

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