Burry successfully foresaw the subprime mortgage crisis, a pivotal event that precipitated the Great Financial Crisis of 2007-2009. His prescience not only spared his investments but also yielded a staggering personal profit of $100 million while generating an astonishing $700 million for his investors by shorting the mortgage bond market.
Today, we delve into Burry’s recent portfolio disclosures, specifically focusing on one of the dozens of stocks he holds. Amid the well-known names, we scrutinize the stock that we believe has the potential to deliver strong returns to investors in the coming years.
Stellantis NV (NYSE: STLA)
Stellantis is a renowned Dutch auto manufacturer that owns 16 globally known carmaker brands, including Alfa Romeo, Dodge, Maserati, Chrysler, and Peugeot, among others. As of 2022, Stellantis is the biggest car producer by units sold, and the 7th largest all-electric vehicle (EV) maker.
According to the last available regulatory filings, Burry’s hedge fund held roughly $5.7 million worth of STLA stock, or 325,000 shares.
First, let’s look at the company’s fundamentals.
In the first half of 2023, Stellantis’s shipments grew by 10%, while its revenues and operating income increased by 12% and 31%, respectively. During that period, the carmaker delivered €13.5 billion ($14.15bn) of operating income and €10.9 billion of net income, respectively.
With its current market cap of $57.5 billion, Stellantis is valued at a price-to-earnings (PE) ratio of 2.81, Yahoo Finance data shows. In other words, for every dollar of earnings the company generates, its stock is currently trading at a price of $2.81. Considering the company’s long track record, brand lineup, and financial health, this suggests that STLA may be significantly undervalued.
The appeal of the STLA stock is reflected in analysts’ bullish predictions.
Notably, the average 1-year price forecast for Stellantis shares stands at $24.23, based on the 24 analysts’ predictions. This is more than 30% higher than its current share price.
In addition, the 25 analysts that commented on the stock in the past 3 months gave it a consensus rating of a ‘Strong Buy,’ according to TradingView. Out of those, 19 strategists see STLA as a ‘Strong Buy,’ 2 suggest a ‘Buy,’ while just 4 believe it’s a ‘Hold.’
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