David Einhorn’s Greenlight Capital has
established a sizable position in Brighthouse Financial, making the MetLife
spinoff one of the hedge fund firm’s five largest
disclosed long positions. In its fourth-quarter letter sent to
investors and obtained by Institutional
Investor’s Alpha, Greenlight said it paid an
average price of $57.92 for the shares of the insurance and
annuities provider, which formerly comprised most of
MetLife’s U.S. retail business.
"BHF appears to be a traditional spinoff — an
underperforming and unloved part of a larger, more successful
company," Greenlight said in the letter. "The tone of the
spin-off road show was noticeably downbeat, with management
advancing a business plan that does not sound particularly
exciting for shareholders."
Analysts are "too pessimistic" about the
company’s prospects, Greenlight said in the
letter, drawing a contrast with many of its short positions
"that don’t appear to have any cushion built in
for a bear market."
Greenlight, which returned 1.6 percent last year, said it
added several other small positions in the fourth quarter. They
an operator of offshore rigs, media giant Time Warner, which it
previously had owned, and social media giant Twitter. It also
exited VanEck Vectors Gold Miners ETF and Hewlett Packard
Enterprise, an enterprise information technology company.
Shares of hedge fund favorite Merck jumped almost 6 percent
January 16 to close at $62.07 after the health-care giant announced promising results from a drug
trial for a new treatment for lung cancer. At the end of the
third quarter, Merck was the fifteenth most widely held stock
among hedge funds, with at least 147 of them reporting a
position in the company, according to research and analytics
Hertz Global Holdings, a favorite holding among hedge funds
and activists, plunged nearly 15 percent January 16 to
close at $20.93 after rival Avis issued pessimistic guidance
for 2018. Investors apparently fear Hertz will be similarly
impacted. Carl Icahn is by far the largest shareholder of
Hertz, with about 35 percent of the shares, while Glenview
Capital Management is the fourth largest shareholder with about
6 percent of the shares, according to regulatory filings.
Balyasny Asset Management owns 5 percent of