Greenlight's David Einhorn pitches 'boring essential-chemicals business' Solvay

By Joseph Adinolfi

True to form, David Einhorn delivered another value-stock pick at this year's Sohn Investment Conference in Manhattan on Wednesday.

During a headlining appearance, Einhorn, the founder of hedge fund Greenlight Capital, said his firm had bought a stake in Solvay SA (BE:SOLB), a 160-year old "boring essential-chemicals business" based in Belgium.

Solvay, a major producer of soda ash and other inorganic compounds, saw its U.S.-traded American depository receipts (SLVYY) rise by nearly 14% on Wednesday to $3.13 a share following Einhorn's endorsement, according to FactSet data.

The business has higher margins than typical commodities producers, while the stock trades at just seven times expected 2024 earnings, Einhorn noted. By comparison, the S&P 500 SPX trades at more than 20 times forward earnings.

Einhorn kicked off his presentation by lamenting the death of the value-investing industry. Many of the thousands of analysts who once spent their days combing through corporate filings searching for undervalued companies have been laid off as investors have increasingly favored passive index-tracking funds over active managers, he said.

Back in February, Einhorn lamented that the growing popularity of passive investing had left markets "fundamentally broken."

See: Markets are 'fundamentally broken' due to passive investing, says David Einhorn

Despite this, now is "actually a great time to be a value investor," according to Einhorn. There is less competition, and still plenty of "cheap stocks that are cheaper than they otherwise would be" if there were more analysts around to sniff them out.

Einhorn developed a reputation as a skilled hedge-fund manager after he recommended that investors short Lehman Brothers during an appearance at the 2008 Sohn Conference.

Last year, Einhorn pitched another European company, Germany's Vitesco Technologies Group AG (XE:VTSC), which develops and manufactures components for hybrid and electric vehicles.

According to a quarterly filing released in February, Greenlight acquired a roughly $12 million stake in Kenvue Inc. (KVUE) in the fourth quarter, while also adding a nearly $2.7 million exposure to Israeli generic-drug giant Teva Pharmaceutical Industries Ltd. (TEVA)

See: David Einhorn's Greenlight Capital adds Kenvue, ETFs and exits Southwestern Energy

-Joseph Adinolfi

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04-03-24 1717ET

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