Leading among the big names who were set to speak at the Value Investing Congress was David Einhorn, of Greenlight Capital Re, Ltd. (NASDAQ:GLRE). Einhorn’s address today was the most-anticipated as he was expected to elaborate on important investing ideas like, Lumber Liquidators Holdings Inc (NYSE:LL), Herbalife Ltd. (NYSE:HLF), Dick’s Sporting Goods, or Martin Marietta Materials, Inc. (NYSE:MLM).
Earlier this year, Herbalife went down as much as 19 percent, after Einhorn raised questions about the way company assorts customers and distributors. The sought-after value investor, who is known for shaking stocks and showing strong returns in his hedge fund, refrained from making any further comments on HLF. He advised the audience to do their own homework and not rely on investor ideas entirely. He also said that although he listens to what other investors are saying, he still makes up his own mind. Einhorn’s singular outlook on value investing is evident from his catch of Lehman Brothers, back in 2007. He was the first one to mark the vulnerability of Lehman, and he did it rightly. Einhorn is also not deterred by the most influential investor of our time, Warren Buffett. While Buffett openly and vehemently denies the value of Gold as a profitable asset, Einhorn fires back with equal wit and resilience.
Roubaix Composite February 2021 Net Return +7.87%; YTD Net Return +11.34%
The February 2021 monthly tearsheet for the Roubaix Fund Composite, a fundamental long/short equity strategy focused on small and mid cap U.S. stocks. Q4 2020 hedge fund letters, conferences and more Roubaix Composite Performance Roubaix generated a net return of +7.87% in February relative to the long-only benchmark Russell 2000 Index total return of +6.23% Read More
Among the four investment ideas that Einhorn discussed today were, Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR), General Motors Company (NYSE:GM), CIGNA Corporation (NYSE:CI), and Chipotle Mexican Grill, Inc. (NYSE:CMG).
The most severely affected by Einhorn’s legendary analysis so far is Chipotle Mexican Grill, Inc. (NYSE:CMG), the stock plummeted at about the same time as Einhorn announced it as a short. Trading began today at $319 and dove right down to $290, just minutes after Einhorn announced it as short. This is an 8 percent decline from the last closing price of $316. Einhorn dislikes it because of its inability to contest Taco Bell, a better favorite of customers surveyed in Greenlight’s research.
Einhorn’s has a well known short position on Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR), the stock earned Greenlight Capital its biggest gain in the second quarter of 2012, when it fell from $46.84 to $21.78. Einhorn’s thesis is super bearish on Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR), as evidenced, again, in his speech in VIC 2012. The pitfalls for the company include strong competition from Starbucks Corporation (NASDAQ:SBUX) Verismo coffee brewer and Kraft Foods Inc (NASDAQ:KFT), with its coffee brand Maxwell House. Moreover the company has the highest capex to sales ratio among all its competitors.
Einhorn also discussed his long view on General Motors Company (NYSE:GM). He sees big potential in the conglomerate, with new releases of Cadillac SUV and trucks. He estimates EPS at $6.00 (after taxes) for 2014. He is also long on CIGNA Corporation (NYSE:CI).