One of the newest stock picks from David Einhorn’s DME Capital Management hedge fund in the second quarter was bottled water company Primo Brands Corp (NYSE:PRMB). Former hedge fund manager Whitney Tilson shared his thoughts on Einhorn’s new pick recently.
• Where is PRMB stock headed?
Whitney Tilson on Primo Brands
In recent weeks, a daily newsletter from former hedge fund manager Whitney Tilson has been warning investors of signs of the AI bubble popping. Tilson took a break from the bearish sentiment to share his thoughts on some of the new stock picks from Einhorn.
"When I took a quick glance at the stock, I noted that it has had many ups and downs since its 1992 IPO," Tilson wrote.
The former hedge fund manager notes that the stock ran up to $35 last year before pulling back to $22 recently.
Tilson notes that the company is the result of a merger between BlueTriton and Primo Water in 2024, leaving limited financial results. Since 2021, the company’s revenues have doubled and operating income went from nearly nothing to more than $700 million annually.
Dividends and share buybacks are also highlighted by Tilson in the write-up.
"Overall, this is a solid financial picture. It’s a good — though not great — business, and all of the key metrics are trending in the right direction."
Tilson says the stock trades at around 16.5x this year’s expected earnings per share and 14.5x next year’s expected earnings per share, making the stock modestly cheap.
The investor shared a bullish case on Primo Brands from a user who pointed out bottled water is an attractive investment area. The user also shared that Primo Brands has strong retail market share for bottled water and the direct delivery market.
Tilson highlights another user sharing the bear case of Primo having "worsening unit economics" with slower growth coming. Problems include higher diesel prices and more tap water solutions available to consumers now than before.
Ultimately with the bull and bear case, Tilson looks to remain on the sidelines.
"Forced to go long or short this stock, I’d go long — but not with much conviction. In light of the number of current and potential headwinds, the stock isn’t cheap enough to be attractive," Tilson said.
Tilson said Primo Brands will remain on his watchlist given Einhorn’s investment.
David Einhorn on Primo Brands
Primo Brands is one of seven new stocks added to the DME Capital Management hedge fund in the second quarter.
Einhorn disclosed buying 2,823,660 shares in the quarter, which were valued at $69.0 million at the end of June. This made the stock represent around 1.8% of assets in the hedge fund.
The hedge fund manager told investors they bought shares at an average price of $20.20 in the second quarter and believe the stock has been hurt by integration challenges of the merger.
"We believe these issues are temporary and that the merger will create synergies over time."
See More: Top Value Stocks
Primo Brands Stock Price Action
Primo Brands stock trades at $20.39 on Friday versus a 52-week trading range of $14.36 to $26.21. The stock is down 2.8% over the last six months, while shares remain up 26% year-to-date in 2026.
Photo: Courtesy Primo Brands
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