While the market continues to contend with stronger-than-expected economic data and concerns around potential interest rate increases as the third quarter prepares to come to a close in a few weeks, a handful of stocks in David Einhorn (Trades, Portfolio)’s equity portfolio have retreated near their 52-week lows.
In contrast, after returning -18.11% in 2022, the S&P 500 Index has gained around 17.14% so far this year.
The activist investor’s New York-based firm, Greenlight Capital, which strives to generate long-term capital appreciation by taking an approach rooted in emphasizing intrinsic value, invests in companies that have the potential to achieve consistent returns and safeguard capital regardless of market conditions. Einhorn is also known for his short positions, among the most famous of which is Tesla Inc. (TSLA, Financial).
The second-quarter 13F filing showed his equity portfolio consisted of 41 stocks, which was valued at $2.13 billion. Einhorn’s holdings have posted mostly strong performances so far in 2023, with only five of the top 20 positions declining.
As of Sept. 11, Einhorn’s stocks that have collapsed to near their lowest prices in a year are Advance Auto Parts Inc. (AAP, Financial), GoPro Inc. (GPRO, Financial), Galapagos NV (GLPG, Financial) and Nuvation Bio Inc. (NUVB, Financial).
Investors should be aware 13F filings do not give a complete picture of a firm’s holdings as the reports only include its positions in U.S. stocks and American depository receipts, but they can still provide valuable information. Further, the reports only reflect trades and holdings as of the most-recent portfolio filing date, which may or may not be held by the reporting firm today or even when this article was published.
Advance Auto Parts
Advance Auto Parts’ (AAP, Financial) shares have fallen around 65% over the past year and nearly 59% year to date. The stock is currently 0.41% above its annual low of $62.78.
During the second quarter, the guru invested in 37,570 shares of the company, which were allocated to 0.12% of his equity portfolio.
The Raleigh, North Carolina-based company, which manufactures aftermarket automotive parts, has a $3.73 billion market cap; its shares were trading around $62.79 on Monday with a price-earnings ratio of 10.86, a price-book ratio of 1.37 and a price-sales ratio of 0.34.
The GF Value Line suggests the stock is significantly undervalued currently based on its historical ratios, past financial performance and analysts’ future earnings estimates.
At 72 out of 100, the GF Score indicates the company is likely to have average performance going forward. While it received high ratings for profitability and growth, the financial strength and value ranks are more moderate and momentum is low.
The company also has a predictability rank of two out of five stars. GuruFocus research found companies with this rank return an average of 6% annually over a 10-year period.
Of the gurus invested in Advance Auto Parts, Jim Simons (Trades, Portfolio)’ Renaissance Technologies has the largest stake with 1.13% of its outstanding shares. Mario Gabelli (Trades, Portfolio), Paul Tudor Jones (Trades, Portfolio) and Keeley-Teton Advisors, LLC (Trades, Portfolio) also own the stock.
GoPro
Shares of GoPro (GPRO, Financial) have tumbled more than 40% over the past year. The stock is currently trading 0.70% above the annual low of $3.39.
The investor holds 2.59 million shares, which make up 0.50% of the equity portfolio.
The company headquartered in San Mateo, California, which manufactures action cameras and related software, has a market cap of $521.56 million; its shares were trading around $3.42 on Monday with a price-book ratio of 0.94 and a price-sales ratio of 0.55.
According to the GF Value Line, the stock, while undervalued, is a possible value trap. As such, potential investors should do thorough research before making a decision.
The GF Score of 67 also implies the company has poor performance potential on the back of a high value rank, middling marks for profitability, financial strength and momentum as well as a low growth rating.
It also has a one-star predictability rank. GuruFocus says companies with this rank return an average of 1.1% annually.
With a 1.70% stake, Einhorn is GoPro’s largest guru shareholder. The stock is also being held by Simons’ firm, Caxton Associates (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio) and Steven Cohen (Trades, Portfolio).
Galapagos
Galapagos’ (GLPG, Financial) shares have sunk 29.18% over the past year. They currently trade 1.73% above the yearly low of $36.16.
Einhorn has a 150,168-share holding, which occupies 0.29% of the equity portfolio.
The Belgian pharmaceutical company has a $2.43 billion market cap; its shares traded around $36.81 on Monday with a price-book ratio of 0.88 and a price-sales ratio of 4.01.
Based on the GF Value Line, the stock, though undervalued, appears to be a possible value trap. As such, potential investors should use caution.
The GF Score of 63 means the company has poor performance potential, driven by high ratings for financial strength and value, moderate profitability and growth ranks and low momentum.
Further, it has a one-star predictability rank.
The Vanguard Health Care Fund (Trades, Portfolio) is Galapagos’ largest guru shareholder with a 1.78% stake. Other guru investors are Cohen, PRIMECAP Management (Trades, Portfolio) and Simons’ firm.
Nuvation Bio
Shares of Nuvation Bio (NUVB, Financial) have retreated nearly 45% over the past 12 months. Currently, the stock is trading 2.63% above its annual low of $1.52.
The investor holds 34,995 shares of the company currently.
The San Francisco-based pharmaceutical company has a market cap of $338.20 million; its shares traded around $1.55 on Monday with a price-book ratio of 0.54.
There is currently not enough data to generate a GF Value Line. However, the stock has tumbled nearly 70% since its initial public offering.
Further, the GF Score of 22 warns the company has weak performance potential due to a low profitability rank and a high financial strength rating. It did not receive scores for the other three criteria, however, so its full prospects may not be reflected.
Holding a 1.74% stake, David Abrams (Trades, Portfolio) is currently Nuvation’s largest guru shareholder. Simons’ firm and Jeremy Grantham (Trades, Portfolio) also own the stock.
