Greenlight Capital, by David Einhorn, is promoting a new stake in Brighthouse Financial Inc., a life and annuity insurance company that came out of MetLife Inc. in August, when the hedge fund tries to recover from a disappointing year.
Brighthouse, which has more than $ 220 billion in assets, is a more capital intensive operation than the companies MetLife maintained, and is closely tied to fluctuations in the financial markets. Analysts are "laser focused" on the company's downside risks from a bear market, making them "too pessimistic" about the company's stock, Greenlight wrote in a quarterly letter to investors on Tuesday seen by Bloomberg . The shares are traded at a discount of 40 to 50 percent to similar companies, wrote the money manager.
Einhorn hedge funds lagged behind markets last year, up 1.6 percent. The average hedge fund increased 6.5 percent, while the S & P 500 index returned almost 22 percent.
"This must be frustrating for you, our partners, and it's definitely frustrating for us," the firm wrote in the letter. He said the losses came from his "bubble basket" of technology shorts, including Amazon Inc., Athenahealth Inc., Netflix Inc. and Tesla Inc., and a bet against Caterpillar Inc.
Greenlight also said it took a Small position on Twitter Inc. With improvements in the user experience, the number of visitors and the time they spend on the site has grown, the company said.
"As a result, we believe that TWTR will have a launch for advertisers in 2018, which should lead to revenue growth," Greenlight wrote.
Here are more highlights of the January 16 note:
- It took a small position in Ensco Plc as the growth of the shale oil supply will probably not be able to meet global demand. leaving offshore drilling to fill the gap
- A stake in Time Warner Inc. was repurchased when stocks fell in response to the US government UU he opposed the sale to AT & T Inc. "We believe the Justice Department has a weak antitrust case and the merger is likely to happen," Greenlight wrote in th e letter.
- They left positions in Hewlett Packard Enterprise Co., Rite Aid Corp., VanEck Vectors Gold Miners ETF, ISS A / S and closed an unsuccessful short in Deere & Co.
- Said General Motors Co., The biggest winner of the year, remains significantly undervalued
- The longest runs revealed at the end of the year were AerCap Holdings NV, Bayer AG, Brighthouse, General Motors and gold
– With the assistance of Katherine Chiglinsky