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Here’s What Green Brick Partners (GRBK) Is Doing to Stay Ahead of Competition

Alex Smith

Greenlight Capital Fund recently released its Q1 2020 Investor Letter, a copy of which you can download below. The fund posted a return of -21.5% for the quarter, underperforming its benchmark, the S&P 500 Index which returned -19.60% in the same quarter. You should check out Greenlight Capital’s top 5 stock picks for investors to buy right now, which could be the biggest winners of the stock market crash. There weren’t a lot of funds who could deliver these kinds of returns without shorting the market or using aggressive put options.

In the said letter, Greenlight Capital highlighted a few stocks and Green Brick Partners Inc. (NASDAQ:GRBK) is one of them. Green Brick Partners operates as a homebuilding and land development company. Year-to-date, GRBK stock lost 10.4% and on May 15th it had a closing price of $9.34. Its market cap is of $515 million. Here is what Greenlight Capital said:

"GRBK: Last year, GRBK demonstrated strong earnings momentum and beat estimates, and analysts raised their forecasts for the next couple of years. GRBK fell from a February 20 high of $12.93 to $8.91 today. It trades at 86% of book value. While the decline in home sales due to the slowdown will impact earnings later this year, we believe that single family housing will emerge as a post-pandemic secular winner, as low interest rates support housing and people’s preferences are likely to shift toward detached homes over multifamily residences. GRBK has the ability to weather the short-term slowdown, as it operates with much less financial leverage than its peers."

In Q3 2019, the number of bullish hedge fund positions on GRBK stock increased by about 7% from the previous quarter (see the chart here), so a number of other hedge fund managers seem to agree with GRBK’s growth potential.

Disclosure: None. This article is originally published at Insider Monkey.