All You Need To Know From David Einhorn's Q1 Letter To Greenlight Investors

Noted fund manager David Einhorn released his first-quarter 2016 letter to Greenlight Capital investors Monday. Greenlight returned 3 percent net of fees and expenses during the quarter, the letter showed. Among several other highlights including what he termed as "winners" in Michael Kors Holdings Ltd KORS and CONSOL Energy Inc. CNX, Einhorn announced a new position in Yelp Inc. YELP, something which has investors in the after-hours session excited.

A New Stake In Yelp

The letter showed Einhorn purchased Yelp shares at an average price of $21.16. He highlighted expectations for Yelp to double sales and earn some $300 million of EBITDA on margin of 35 percent by 2019 if the company's current plan is executed. "We rate [Yelp] five stars," Einhorn concluded.

A New Macro Position: Nat Gas

To gain some exposure to nat gas, Einhorn disclosed the purchase of 2017 and 2018 calendar strips at an average price of $2.71 and $2.84 per MMBtu, respectively. "Natural gas prices are not high enough to justify drilling in all but the very best locations. The industry has responded by dramatically reducing drilling activity. As existing wells deplete, supplies should fall. The high cost of liquefying and transporting natural gas limits competition to North American sources. Current inventories are high following a period of over-drilling and a record warm winter," the Greenlight letter showed.

An Update On Pioneer Natural Resources

Pioneer Natural Resources PXD was described as "a company where management's investor presentations are so disconnected from the company's SEC filings." The categorization was made after the Greenlight team dug through Pioneer's recent Form 10-K filing. "We are amazed at how little conversation it has provoked," the Einhorn told Greenlight investors.

Other Highlights

• SunEdison Inc SUNE and the Japanese-traded Resona Holdings were viewed as losers during the quarter.
• American Capital Agency Corp. AGNC and Hatteras Financial Corp. HTS positions were re-initiated.
• PVH Corp. PVH position initiated at average price of $75.65. Einhorn sees PVH with "substantial margin opportunities in its three key business segments."
• Chicago Bridge & Iron Company N.V. CBI and SNC-Lavalin Group Inc (ticker "SNC" on the Toronto exchange) positions closed.
• ON Semiconductor Corp ON position closed at a small gain.