The Morning Brief: Wednesday Spells Relief for Greenlight

Phew! That was the sound of relief coming out of the New York office of David Einhorn’s Greenlight Capital Wednesday after four of its largest long positions enjoyed a particularly strong day. The best performers were two stocks that have seen a recent round of cuts in their target prices by Wall Street investment banks. Renewable energy company SunEdison surged 6.74 percent to close at $14.25 while Consol Energy, a coal and natural gas company, jumped 5.58 percent to $14.20. In a note sent midday to clients, Deutsche Bank pointed out that SunEdison’s stock Wednesday initially sold off on heavy volume — without any additional news hitting the tape. It acknowledged that investors are concerned about China devaluing its currency and its impact on dividends. “We note that the dividends are hedged against FX (foreign exchange) and selloff was mostly driven by heavy short-selling activity," Deutsche assured clients. Also, shares of embattled chipmaker Micron Technology rose nearly 2 percent to $18.20. On Wednesday Credit Suisse repeated its Outperform rating on the stock. And finally, the price of gold, another top Greenlight long, jumped 1.5 percent on Wednesday.
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Shares of Atlas Energy surged 17.5 percent after Omega Advisors’ Leon Cooperman disclosed an activist position in the natural gas and oil extraction company. Even after the move, the stock has just a $101 million market capitalization.
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Ray Dalio’s Bridgewater Associates reduced its U.S. equity portfolio by about 16 percent, to $10.8 billion at the end of June, from $12.8 billion the previous quarter. Three exchange-traded funds accounted for 85 percent of the assets, led by a Vanguard fund that tracks the FTSE emerging-markets index, another ETF that mirrors the MSCI emerging-markets index and the SPDR S&P 500 ETF Trust that tracks the Standard & Poor’s 500 index, a position Bridgewater cut by 36 percent from the prior quarter.
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Chris Hansen’s Valiant Capital Management established a new 725,200-share position in Kraft Heinz, making it the San Francisco hedge fund firm’s eighth-largest U.S. long position. Keep in mind that the Tiger Grandcub typically has a healthy portfolio of non-U.S. stocks.