Greenlight Capital Bets on Henry Schein, Sees Room for Margin Expansion and Value Creation
Prominent investment firm Greenlight Capital outlined its latest market positions and performance in a recently published investor letter for the fourth quarter of 2025. The firm, led by David Einhorn, reported a net return of 9.0% for the full year 2025, trailing the S&P 500's 17.9% gain. However, it outperformed in Q4 with an 8.5% return versus the index's 2.7%. Since its 1996 inception, Greenlight has returned $6.1 billion to investors after fees.
The letter highlighted a new addition to its portfolio: Henry Schein, Inc. (NASDAQ: HSIC), a leading global distributor of healthcare products and services, primarily to dental practitioners. The stock closed at $74.34 on January 29, 2026, reflecting a challenging period with a one-month decline of 3.23% and a 52-week loss of 7.08%. The company holds a market capitalization of approximately $9 billion.
Greenlight's thesis appears to center on potential margin improvement and operational efficiency at Henry Schein. The firm noted that while 51 hedge funds held the stock at the end of Q3 2025—a slight increase from the previous quarter—it remains outside the hedge fund elite's most popular picks. Henry Schein reported Q3 2025 global sales of $3.3 billion, representing a 5.2% year-over-year growth.
Analysts suggest Greenlight's move is a classic value play, betting that the market has overlooked Henry Schein's ability to streamline costs and improve profitability in a stable, essential healthcare niche. The dental supply industry, while competitive, is seen as resilient to economic downturns. However, Greenlight tempered its endorsement, suggesting that certain AI-centric stocks might offer higher near-term upside with lower risk, a nod to the ongoing market fascination with artificial intelligence investments.
Investor Reactions:
"Finally, a sensible move," said Michael R. Thorne, a portfolio manager at a mid-sized value fund. "HSIC has been trading below its intrinsic value for months. The dental sector isn't going away, and Schein's distribution network is a formidable moat. This is a patient capital story with clear levers for margin expansion."
"Are we serious?" retorted Lisa Chen, a fintech analyst known for her blunt commentary. "Greenlight picks a stock that's down 7% in a year while the market soared, and we're supposed to see 'potential'? This feels like a desperate grab for a safe-haven yield play in a boring industry. The growth story here is anesthetic."
"It's a contrarian signal worth noting," added David P. Miller, an independent market strategist. "When a firm like Greenlight takes a position in a laggard, it's often a deep dive into the balance sheet. The question isn't about top-line fireworks but whether management can execute on cost controls and capital allocation to unlock value."
The broader context includes ongoing industry consolidation and pressure on supply chain margins. Henry Schein's performance will likely hinge on its ability to navigate these challenges better than the market expects. For investors, Greenlight's stake puts a spotlight on the often-overlooked healthcare distribution sector and the debate between steady value and high-growth tech bets.
Disclosure: This analysis is based on publicly available information from Greenlight Capital's investor letter and market data. It is for informational purposes only and does not constitute investment advice.