Greenlight Capital’s David Einhorn knows the value small-cap stocks can deliver; out of his top 20 holdings, 6 have market caps of $4 billion or less. The following is a list of his 5 top small-cap holdings.
1. Oil States International (OIS) was a position that was not added to or subtracted from in the last quarter, but a series of sales from other funds has made Greenlight the dominant shareholder in the company; it owns 2.75 million shares at $270 million.
2. CONN’s (CONN) is a consumer goods play and has reported a robust 33% store sales growth, although it has had some credit losses and reduced guidance. Wall Street punished the company, sending its stock down from $79 to $32 this year. Einhorn thinks the market overreacted in this sell-off and projects 15-20% growth for the company. Greenlight Capital owns 3.3 million shares at a value of $128 million.
3. Babcock & Wilcox (BWC) is a technical innovator in power generation. Greenlight owns 3.8 million shares with a value of $127 million, although the fund decreased its stake this year.
4. McDermott (MDR) is an engineering, construction and installation services provider for offshore oil and gas outfits. Greenlight is the largest shareholder, with 14.04 million shares worth $106 million. This company comprises 1.6% of Greenlight’s portfolio.
5. Take Two Interactive (TTWO) is the gaming company that created the hugely popular Grand Theft Auto series. Greenlight is the largest shareholder in TTWO with 4.8 million shares with a value of $105 million. Greenlight increased its position by 15% in the first quarter. Ken Griffin’s Citadel is also a dominant shareholder, and Citadel doubled its stake earlier in the year.