Billionaire David Einhorn, the head of Greenlight Capital, disclosed last week in his company's quarterly 13F report that he established 19 new positions during the fourth quarter of 2017. One of the most significant purchases that he made was in J.C. Penney (JCP), the retail giant which has become "moderately distressed," according to a report by Guru Focus.

At a time when many analysts showed interest in retail, Einhorn helped to solidify the trend. (See also: Hedge Fund Billionaires Bullish on FANG and Retail Stocks: 13F.)

Greenlight Capital acquired close to 6.4 million shares of J.C. Penney stock in the final three months of 2017. The average purchase price for the stock was $3.22.

All in all, the purchase is a modest one compared with the size of Einhorn's total portfolio. In fact, he increased his portfolio by just 0.37% with the JCP purchase.

J.C. Penney Will Close 8 Stores In 2018

J.C. Penney recently announced plans to close eight stores across the U.S. during the 2018 fiscal year. The stores will be closed in locations including St. Louis, Missouri, Paramus, New Jersey, Burlington, Washington, and Mt. Vernon, Ohio.

The reason for this, according to the Guru Focus report, is an effort to ensure that each location "offer[s] the best expression" of the company brand and that each store can function as a "seamless extension of [J.C. Penney's] omnichannel experience."

The retailer reported strong holiday sales for the end of 2017 as compared with the previous year. Nonetheless, it still maintains a debt-to-equity ratio of 4.17, as well as a debt-to-EBITDA ratio of 6.28, considered high by many metrics, according to data compiled by Investopedia. This high ratio suggests that the company has experienced increasing difficulty in paying off its debts. For comparison, rival retailer Macy's (M) current debt-to-equity ratio is 1.5, according to the data.

It seems that Einhorn is not deterred by the prospect of JCP's financial struggles. Along with this purchase, some of his other top buys in Q4 2017 were CONSOL Coal Resources (CCR), Twitter (TWTR), Time Warner Inc. (TWX), and Ensco PLC (ESV). The total value of Greenlight Capital's 13F portfolio is estimated to be more than $5 billion as of this writing. Relatively speaking, even if the fund's bet on JCP does not pay off, it's a very small portion of that total portfolio.

Everyday investors looking to Einhorn for recommendations or guidance should keep in mind that 13F reports do not reveal a hedge fund's full holdings. Besides that, the 13F looks backward to the previous quarter. Investors thus won't know whether Einhorn maintained his position in JCP into the new year or if he added to it or exited it entirely until after the end of Q1.