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TheStreet Open House

Greenlight's Chipotle Short Worst Performer in Solid Quarter

Stocks in this article: AAPLCMG

NEW YORK (TheStreet) - Greenlight Capital's David Einhorn said on Wednesday that the fund generated alpha across its long, short and macro-economic investment positions in the fourth quarter of 2013, but one name hurt the fund during the quarter: Chipotle Mexican Grill (CMG).

Einhorn said on a conference call for Greenlight Re (GLRE), a reinsurer that the hedge funder chairs, that the firm's best longs in the fourth quarter included Apple (AAPL), Marvel Technology  (MRVL) and Micron Technology (MU) Chipotle Mexican Grill (CMG) and U.S. Steel (X) proved to be the firm's worst shorts in the quarter.

Einhorn, in his conference call, didn't make many big statements about his views on the global economy, other than to say that Greenlight Capital's goal in 2013 was "to protect capital in an uncertain environment." He did say that Greenlight's short portfolio benefited from the firm's avoidance of the most speculative stocks in current markets, and said many of those stocks appear disconnected from reasonable valuation metrics.

Overall, Greenlight's longs outperformed the market in the fourth quarter, Einhorn said, while shorts positions went up less than the broader market. Macroeconomic positions, particularly in the Japanese Yen, also contributed to Greenlight's fourth quarter performance.

On Tuesday evening, Greenlight Re reported fourth quarter earnings of $83.9 million and full-year net income of $2.22 a share, which disappointed investors. The re-insurer also reported a net investment gain of 6.6% on Greenlight Re's investment portfolio managed by DME Advisors.

For the full-year, Greenlight Re reported net investment income of $218.1 million, representing a return of 19.6%. That compares to net investment income of $78.9 million during 2012 when Greenlight Re reported a 7.1% return. Book value for the reinsurer improved by over 26% in 2013.

"2013 was a solid year for Greenlight Re that showed the strength of our dual-engine strategy," David Einhorn, Chairman of of Greenlight Re, said in a press release. "The results of both our underwriting and investment portfolio were good and created value for Greenlight Re shareholders."

Shares in Greenlight Re were falling by more than 1% in Wednesday trading to $32.04 a share. The reinsurer's stock has gained over 30% in the past 12-months.

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