Is David Einhorn's Secret 'Fiscal Cliff' Bet Blowing Up?
Such forecasts could indicate continued pain for the short trade Einhorn disclosed in May. Since mid-May, Martin Marietta shares have risen over 30% from just above $75 a share to current levels of $98 a share, indicating steep losses for Einhorn -- that is, if he's still shorting the company.
Those share-price gains come amid expectations from the likes of Jefferies' Betts that Martin Marietta may be benefitting from a revival in the construction markets that drive the company's materials orders.
Betts expects "mid-cycle" earnings for the company in 2013. Such a scenario could also counter the logic underpinning Einhorn's short trade.
"Recent earnings benefited from one-time fiscal stimulus that is about to wind down," Einhorn said at the Ira Sohn conference in May. Those comments were also taken negatively for Vulcan Materials, given the prospect of a hostile or friendly merger and their similar earnings profiles.
Some analysts immediately took aversion to Einhorn's presentation and the valuation metrics he highlighted as supporting his short.
"We don't believe Mr. Einhorn's comments regarding valuation as measured by a P/E basis represent anything new," wrote Wells Fargo analyst Adam Rudiger in a May note to clients. While Einhorn focused on Martin Marietta's share valuation at a price of 35 times forward earnings as a key to his short position, Rudiger argued it was the wrong metric.
In the fourth quarter, Einhorn's Greenlight Capital portfolio fell over 3%, damping returns for 2012 to just 3.4%, underperforming the S&P 500 and Dow Jones Industrial Average .
Notably, stocks in Greenlight's short portfolio rose roughly 10% in the fourth quarter, significantly outperforming index gains and hitting the fund's overall performance.
"The losses in the short portfolio were broad-based; while the S&P 500 was down modestly in the quarter, our average short rose about 10%. Green Mountain Coffee Roasters was the worst offender, with a 74% advance that wiped out our 2012 profits on the position," Einhorn wrote in a Jan. 23 investor letter. He made no mention of short positions in Martin Marietta or Moody's, which Einhorn disclosed in 2012.
Still, as Einhorn hits airwaves and investor conferences to promote a long bet on Apple and other highly watched trades like a seemingly well-timed short position on Chipotle Mexican Grill (CMG) , it might be time for him to address recent trades like Martin Marietta.
Meanwhile, Einhorn may yet play a role in the debate over whether ratings agencies can be held liable for wrongheaded pre-crisis opinions .
Jonathan Gasthalter, a media spokesperson for Einhorn at public-relations firm Sard Verbinnen, declined to comment on whether Greenlight Capital continues to hold a short position in Martin Marietta.