David Einhorn’s hedge fund, Greenlight Capital, made significant changes to its portfolio in the third quarter of this year, according to the fund’s 13-F filings. The New York-based fund reduced its stakes in its top two holdings, U.S. housebuilder Green Brick Partners and Pennsylvania coal miner Consol Energy. In a surprising move, Greenlight Capital shifted its focus to gold, investing millions in the popular SPDR Gold Trust ETF.
Greenlight Capital increased its investment in the SPDR Gold Trust by a staggering 89.22% during the third quarter. The fund allocated $34.9 million to the exchange-traded fund, which closely tracks the price of gold bullion. It’s worth noting that any gold investments made through futures contracts are not reflected in these regulatory filings.
The decision to invest in gold comes as no surprise, considering the ongoing economic uncertainty caused by the COVID-19 pandemic. Investors have flocked to gold as a reliable safe haven asset during volatile times. Greenlight Capital initially entered the gold market during the second quarter of 2020, capitalizing on the upward trend in gold prices.
With this recent increase in investment, Greenlight Capital now holds a larger stake in the SPDR Gold Trust than ever before. As gold prices continue to rally in recent months, this strategic shift could prove to be advantageous for the hedge fund.
Investments in gold have long been renowned for offering stability when faced with unstable markets and high inflation rates. These factors contribute to a rise in gold prices during periods of uncertainty. Greenlight Capital recognized these benefits and seized the opportunity to capitalize on this lucrative investment option.
While focusing on gold, Greenlight Capital simultaneously reduced its holdings in Green Brick Partners and Consol Energy. These two stocks previously accounted for over two-fifths of the fund’s portfolio. As Greenlight Capital reshapes its investment strategy, it will be interesting to see how these changes impact its overall performance moving forward.
Greenlight Fund’s Portfolio Adjustments
The New York-based Greenlight fund recently made significant adjustments to its investment portfolio. These changes included reducing its stake in property developer Green Brick Partners by 25.65% in the third quarter. Greenlight currently controls $1.76 billion in assets and now holds fewer shares in Green Brick than ever before, since its initial purchase back in 2014.
Despite the decrease, Greenlight’s position in Green Brick remains its largest holding, making up 29.1% of its overall portfolio. This highlights the fund’s continued confidence in the U.S. housebuilder.
In addition to the Green Brick divestment, the fund also decreased its stake in coal miner Consol Energy by 15.52%. This decision came after Consol Energy experienced a surge in stock prices, reaching record highs in October. The fund’s stake in Consol Energy now accounts for 14.33% of its total portfolio, valued at over $250 million.
Notably, Greenlight also increased its investments in various sectors, including energy, technology, and healthcare. The fund allocated millions to companies like natural gas producer Southwestern Energy, IBM spin-off company Kyndryl Holdings, oil and gas services provider Seadrill, camera manufacturer GoPro, electricity generator Net Power, and Canadian mining firm Teck Resources. It’s worth mentioning that Teck Resources recently made headlines for agreeing to sell its metallurgic coal mining operations to Glencore.
These recent portfolio adjustments demonstrate Greenlight’s commitment to managing its investments strategically with a focus on diverse sectors and opportunities for growth.
