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Greenlight Capital is an investment management firm specializing in value-oriented strategies. The letter can be downloaded here. Greenlight Capital released its second-quarter 2026 investor letter, reporting a 4.3% decline for the Partnerships and a 1.9% year-to-date gain, net of fees and expenses, compared with gains of 15.2% and 10.2% for the S&P 500 Index. The funds entered the quarter conservatively, but costly trading decisions and macro positions, particularly in gold and U.S. interest rates, weighed on results. Long positions contributed roughly 9%, offset by similar losses from shorts. The letter also highlighted concerns over speculative market conditions, using SpaceX's $1.75 trillion IPO valuation and investment-grade rating as examples of excess. Looking ahead, Greenlight is more constructive on Fed Chairman Kevin Warsh's inflation stance and expects positions to recover if inflation moderates and rates remain unchanged. Additionally, reviewing the Strategy's top holdings could help identify its best ideas for 2026.

In its second-quarter 2026 investor letter, Greenlight Capital highlighted Fortune Brands Innovations, Inc. (NYSE:FBIN). Fortune Brands Innovations, Inc. (NYSE:FBIN) provides home, security, and digital products for residential home repair, remodeling, new construction, and security applications in the United States and internationally. On August 26, 2026, Fortune Brands Innovations, Inc. (NYSE:FBIN) closed at $46.31 per share. Over the past month, Fortune Brands Innovations, Inc. (NYSE:FBIN) returned -7.33%, while its shares have declined 22.57% in the last 52 weeks. Fortune Brands Innovations, Inc. (NYSE:FBIN) has a market capitalization of $5.44 billion, and its stock has traded within a 52-week range of $32.34 to $64.84.

Greenlight Capital stated the following regarding Fortune Brands Innovations, Inc. (NYSE:FBIN) in its Q2 2026 investor letter:

"Fortune Brands Innovations, Inc. (NYSE:FBIN) is a building products company whose brands include Moen, Therma-Tru and Master Lock. Over the past several years, both a challenging housing market and poor execution by prior management led to share losses and profit erosion. Despite these challenges, we believe the company's brands remain strong and its competitive position is intact. In March, an activist investor joined the board, and in June the company appointed a new CEO with an exceptional track record of value creation in the building products industry. Even without a recovery in housing, we believe new leadership can address the operational issues and grow earnings substantially. While significant share recapture (or a strong housing recovery) would provide additional upside, if FBIN simply achieves the low end of prior management's mid-cycle margin targets on current revenue, it should support approximately $5 of earnings per share. We acquired our position at an average price of $39.37, or approximately 8x those earnings, while peers trade for almost 20x. FBIN shares ended the quarter at $54.90."

Fortune Brands Innovations, Inc. (NYSE:FBIN) is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 43 hedge fund portfolios held Fortune Brands Innovations, Inc. (NYSE:FBIN) at the end of the second quarter which was 48 in the previous quarter. While we acknowledge the potential of Fortune Brands Innovations, Inc. (NYSE:FBIN) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Fortune Brands Innovations, Inc. (NYSE:FBIN) and shared a list of stocks that outperformed Wall Street earnings estimates. In addition, please check out our hedge fund investor letters Q2 2026 page for more investor letters from hedge funds and other leading investors.

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