Legendary investor Michael Burry, commonly known as “The Big Short,” hedge fund Scion Asset Management bought 850,000 shares of New York Community Bancorp (NYSE: NYCB) in Q1 of this year.
His average reported purchase price is $9.04. The NYCB stock now trades at $13.61, a 50% gain in little over three months.
This investment represents 7.19% of Burry’s hedge fund portfolio, making it one of his top five holdings along with JD, Alibaba, Signet, and Zoom.
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What makes NYCB special?
New York Community Bancorp is the holding company for Flagstar Bank. The company’s bank operates about 395 branches across nine states where it engages in multi-family lending in rent-regulated, non-luxury apartment buildings, mortgages and servicing, as well as warehouse lending.
NYCB stock has a 5% dividend yield, which is considered a strong dividend payout. For comparison, Bank of America and JPMorgan pay around 3%.
Aside from Scion Asset Management, which holds around 0.12% of NYCB, the largest holders include BlackRock and Vanguard with more than 10% holding each.
Analysts like NYCB stock
Nine analysts maintained or upgraded the stock outlook with an average target price of $15.7 since July 28.
Recent analyst ratings. Source: Interactive Brokers Fundamentals Explorer
The reason why analysts are bullish on the stock is the acquisition of Signature Bank earlier this year as well as acquiring six banking teams from the former First Republic with $120 billion in assets.
NYCB’s Q2 earnings results from Friday, July 28, beat Wall Street expectations.
NYCB stock technical analysis
The stock has traded in a wide range between $6.50 and $12 since 2013. Typically, ranges present excellent trading opportunities as you can buy near a support level and sell near a resistance level.
Recently, however, NYCB broke out of this range. If the price manages to hold above $12.5 in the coming weeks, the next price target is $17.5, or a 28% gain from the current price of $13.6.
NYCB weekly price chart. Source: StockCharts.com
NYCB is up 63% year to date, outperforming the S&P 500’s 19%.
Any pullback to $12.5 could be a good buying opportunity if you like the stock.
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Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
