Hedge fund manager David Einhorn discussed two positions his firm has taken, both relating to leasing in the transportation industry.
The Greenlight Capital founder and president said Monday at the 24th annual Sohn Investment Conference in New York that his fund has a long position on AerBus and a short on GATX. AerCap is involved in airplane leasing, while GATX is a leader in rail cars.
Speaking favorably of both industries, he said the airline sector has some advantages over rail that make AerCap the better choice over GATX, which he thinks could be overvalued.
“Neither has consumer-facing businesses, and both have terrible news. AerCap operates in a growing industry with a favorable outlook,” Einhorn said. “We think the market has it wrong.”
David Einhorn speaking at the SOHN conference in New York, May 6, 2019.
Heidi Gutman | CNBC
AerCap shares were off 0.4% in early afternoon trading and is up 30.6% in 2019, while GATX was off 1.3% and has gained 9.1% year to date.
Einhorn’s presentation focused on a “planes, trains and automobiles” theme, a take on the 1987 movie. His remarks began with a jab at nemesis and Tesla founder Elon Musk, showing a variety of slides with Musk quotes and calling them “a lot of horse s—.”
On his main stock picks, Einhorn noted that AerCap has a younger fleet of airplanes and GATX has rail cars, and that the air travel demands continue to grow consistently while rail is more tied to economic cycles.
Noting the backlog in airplaine order, he said, “If you want a new plane delivered anytime soon, you need to go to a leasing company that has a spot in lone on the order book.”
Einhorn is perhaps best known for his short position on Lehman Brothers, whose collapse triggered the worst of the financial crisis.