Michael Burry, the hedge fund manager, best known for his bet against the housing market bubble in 2008, has started buying up stocks again. It seems as if Burry has shifted from the pessimistic tone navigating the markets he took earlier this year, in a now-deleted tweet.
Namely, according to the latest 13F filing of Scion Asset Management, his hedge fund, Burry has made some strategic moves with options as well as bought heavily into four
4 companies that he believes are either undervalued at the current prices or are maybe poised for a solid 2022.
Booking Holdings Inc. (NASDAQ: BKNG)
Presently, this stock holding is the second largest in Scion’s portfolio right after put options on Apple (NASDAQ: AAPL). During the first quarter, Burry purchased 8,000 shares of BKNG, as the stock traded at a price-to-free cash flow ratio of 17. Possibly betting on a travel rebound and pent-up demand spending by consumers after being locked down during most of 2020 and 2021.
Meanwhile, shares are down over 22% year-to-date (YTD), touching the March support line at $1,800 in more recent sessions. Trading below all daily Simple Moving Averages (SMAs), the shares possibly offer the same or better entry position now that Scion utilized when they were buying the stock.
Further, analysts rate the shares a moderate buy, with the next 12 months’ average price prediction at $2,682.86, 41.48% higher than the current trading price of $1,896.24.
Discovery Inc (NGS: DISCK) (NASDAQ: WBD)
Traded on the Nasdaq Global Select DISCK shares represent a Series C shares, which do not have any voting rights and represent the shares of the new merged two content juggernauts of Discovery and Warner Media, which trade under the ticker symbol WBD on the NASDAQ.
Moreover, Scion purchased 750,000 shares of the company, while the stock down over 44% YTD. More recent trading sessions have seen increased trading volumes, but the shares are now trading well below all daily SMAs.
Meanwhile, analysts rate the shares a moderate buy, predicting that in the next 12 months, the average price could reach $31.38, 122.87% higher than the current trading price of $14.08.
Alphabet Inc (NASDAQ: GOOGL)
Despite tech stocks being out of favor for the better part of 2022 now, Burry still bet big on tech by buying 6,500 shares of Google and is possibly betting that digital advertising will bring in a lot of revenue for the firm.
A double bottom has been noted on the daily chart, which usually denotes a change in trend, while the shares are now above all daily SMAs and over 20% YTD.
Analysts are in agreement, rating the shares a strong buy, predicting that the average price in the next 12 months can reach $3,138.17, 35.46% higher than the current trading price of $2,316.67.
Cigna Corporation (NYSE: CI)
Burry’s bet on this insurance and healthcare services provider consists of 75,000 shares, while CI posted solid Q1 earnings, beating expectations and having a solid share performance YTD, rising over 14%.
Currently, shares are trading above all daily SMAs in a range between $239 and $273, with these two price levels possibly representing a support line and a resistance line, respectively.
Analysts rate the shares a moderate buy, predicting that shares could hit an average price of $297.65 in the next 12 months, 11.11% higher than the current trading price of $267.88.
Though cautious of the markets, the man who predicted the housing bubble sees an opportunity and invests accordingly.
The four companies that make up the bulk of Scion Capital’s purchases from their latest 13F could also provide value for investors looking to model their portfolio in line with the legendary investor Michael J. Burry.
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