5 Stocks Big Short Michael Burry Is Buying and Selling

In this article, we discuss 5 stocks that Michael Burry is buying and selling. If you want to see more stocks in this selection, check out 13 Stocks Big Short Michael Burry Is Buying and Selling. 

5. JD.com, Inc. (NASDAQ:JD)

Number of Hedge Fund Holders: 67

Scion Asset Management’s Stake Value: $4,209,750

JD.com, Inc. (NASDAQ:JD) is a Beijing-based provider of supply chain-based technologies, computers, communication, and consumer electronics products. Securities filings for the fourth quarter of 2022 reveal that Michael Burry acquired 75,000 shares of JD.com, Inc. (NASDAQ:JD), worth $4.20 million and representing 9.04% of the total securities. 

On February 7, James Lee, an analyst at Mizuho, increased the price target on JD.com, Inc. (NASDAQ:JD) from $82 to $85 and maintained a Buy rating on the company’s shares. According to the analyst, JD.com, Inc. (NASDAQ:JD) remains a top pick in the China Internet sector. The analyst is optimistic about the company’s prospects for 2023, citing factors such as ongoing recovery, strong performance, efficient fulfillment due to vertical logistics integration, and the potential for further margin expansion.

According to Insider Monkey’s data, 67 hedge funds were long JD.com, Inc. (NASDAQ:JD) at the end of Q3 2022, compared to 62 funds in the last quarter. Chase Coleman’s Tiger Global Management is the biggest stakeholder of the company, with 29.8 million shares worth $1.5 billion. 

Here is what Argosy Investors has to say about JD.com, Inc. (NASDAQ:JD) in its Q3 2021 investor letter:

“We sold JD as a result of the furor over Chinese stocks during the quarter. We had been concerned about China’s lack of respect for investor rights for some time, and Beijing has become significantly more aggressive in asserting itself of late. In addition, the legal structure Chinese companies use to come public in the U.S., a Cayman Islands shell corporation leaves American investors with an unsure path to recovering value should these companies cease to trade on U.S. exchanges. Because of the uncertainty, we exited our position in JD completely. We still love JD’s long-term prospects, but we cannot estimate the legal/regulatory risk associated with these companies anymore. More broadly, we are freeing up cash for some other positions we already own which have declined in this market, and after additional review, remain attractive.”

4. Alibaba Group Holding Limited (NYSE:BABA)

Number of Hedge Fund Holders: 105

Scion Asset Management’s Stake Value: $4,404,500

Alibaba Group Holding Limited (NYSE:BABA) made its way onto Michael Burry’s portfolio in Q4 2022, when he acquired 50,000 shares of the company valued at $4.40 million. 

On January 11, Barclays analyst Jiong Shao raised the firm’s price target on Alibaba Group Holding Limited (NYSE:BABA) to $141 from $114 and maintained an Overweight rating on the shares. The analyst anticipates that Alibaba Group Holding Limited (NYSE:BABA)’s revenue for the December quarter will be similar to expectations, but with improved margins. More importantly, the analyst noted that Alibaba is expected to experience growth in gross merchandise volume in the March quarter, marking the first growth in this area in 12 months.

According to Insider Monkey’s data, 105 hedge funds were bullish on Alibaba Group Holding Limited (NYSE:BABA) at the end of Q3 2022, compared to 106 funds in the prior quarter. David Blood and Al Gore’s Generation Investment Management is the biggest stakeholder of the company, with 4.50 million shares worth $360.7 million. 

Polen Capital made the following comment about Alibaba Group Holding Limited (NYSE:BABA) in its October investor letter:

“Alibaba Group Holding Limited (NYSE:BABA) is the leading e-commerce company in China. The stock was weak over the quarter as they reported a quarterly revenue decline. The company has been heavily impacted by the continued covid-19 lockdowns throughout China and the aggressive rate increases and deteriorating outlook for China’s economy have weighed heavily on the stock. The share price has also been under pressure due to the U.S. Securities and Exchange Commission’s plans to delist Chinese tech stocks in 2024 if they do not provide access to audit files.”

3. Coherent Corp. (NASDAQ:COHR)

Number of Hedge Fund Holders: 36

Scion Asset Management’s Stake Value: $5,265,000

Coherent Corp. (NASDAQ:COHR) is a Pennsylvania-based company that develops, manufactures, and sells engineered materials, optoelectronic components, and devices worldwide. It operates in two segments, Compound Semiconductors and Photonic Solutions. Michael Burry added Coherent Corp. (NASDAQ:COHR) to his Q4 portfolio by purchasing 150,000 shares worth $5.2 million, representing 11.31% of the total securities. 

On February 9, Cowen analyst Paul Silverstein reiterated an Outperform rating on Coherent Corp. (NASDAQ:COHR) but lowered the firm’s price target on the shares to $87 from $95. The analyst stated that Coherent Corp. (NASDAQ:COHR)’s long-term perspective has not changed, as they believe that there are strong ongoing demand trends in the company’s end markets, as well as effective company-specific execution. Furthermore, the analyst believes that investors are currently not fully recognizing the company’s strategic vision and operational expertise.

According to Insider Monkey’s Q3 data, 36 hedge funds were long Coherent Corp. (NASDAQ:COHR), compared to 33 funds in the preceding quarter. 

Giverny Capital made the following comment about Coherent Corp. (NASDAQ:COHR) in its Q4 2022 investor letter:

“Coherent Corp. (NASDAQ:COHR)’s stock price plunged last year in response to the merger of predecessor company II-VI and the laser systems manufacturer Coherent. The combined company is a leading designer and manufacturer of compound semiconductors, opto-electronic components and laser systems used in optical communications, manufacturing, life sciences and defense applications. Coherent generally is a number one or number two supplier to customers in structurally growing markets. The bad news is that the old II-VI borrowed a lot of money to buy Coherent, and the new company could be at risk in a recession if demand sinks below levels required to service the debt.

II-VI’s stock price was $90 when it agreed to buy Coherent. We bought the stock at around $60 as the market digested the news. And as I write this, the new company, which kept the Coherent name but is run by II-VI management, trades for about $40. That is roughly 10x expected earnings for 2023 of about $4 per share. Given the deep moats around its intellectual property and strong demand from customers, I believe Coherent needs to make progress on paying down acquisition debt over the next year or two to unlock significant equity value. Coherent finished the year as our smallest position at about 1.5%. We added to the position in January.”

2. Black Knight, Inc. (NYSE:BKI)

Number of Hedge Fund Holders: 47

Scion Asset Management’s Stake Value: $9,262,500

Black Knight, Inc. (NYSE:BKI) is a Florida-based provider of integrated software, data, and analytics solutions worldwide. Black Knight, Inc. (NYSE:BKI) is one of the largest holdings of Michael Burry. He purchased 150,000 shares of the company in the fourth quarter of 2022, worth $9.2 million and representing nearly 20% of the total 13F securities. 

On December 2, Barclays analyst Manav Patnaik downgraded Black Knight, Inc. (NYSE:BKI) to Equal Weight from Overweight with an unchanged price target of $65. The analyst said he is currently waiting for more information on the outlook for U.S. business and information services stocks in 2023, and suggested that investors reduce their exposure to such stocks and wait for guidance from companies. The analyst preferred companies that provide conservative guidance.

According to Insider Monkey’s third quarter database, 47 hedge funds were long Black Knight, Inc. (NYSE:BKI), compared to 46 funds in the prior quarter. Simon Davies’ Sand Grove Capital Partners held the largest stake in the company, comprising 1.4 million shares worth $93 million. 

Madison Funds made the following comment about Black Knight, Inc. (NYSE:BKI) in its fourth-quarter 2022 investor letter:

“Our largest individual detractors were Brookfield Corporation, Alphabet, Amazon, Black Knight, Inc. (NYSE:BKI), and Dollar Tree. Alphabet’s price-to-earnings multiple continues to contract due to concerns about the potential for revenue to be more economically sensitive than it has been historically, given the vast size of the business today. At Amazon, cost pressures and slowing AWS growth weighed on its share price. The regulatory status of Intercontinental Exchange’s pending acquisition offer for Black Knight remains a concern, while in the interim, business conditions have deteriorated given the slowdown in the mortgage market.”

1. The GEO Group, Inc. (NYSE:GEO)

Number of Hedge Fund Holders: 20

Scion Asset Management’s Stake Value: $11,641,241  (After a 48% Decline in Stake)

The GEO Group, Inc. (NYSE:GEO) is a prominent government service provider that offers a range of services including planning, funding, construction, and operational support for prisons, secure facilities, processing centers, and community re-entry centers in multiple countries such as the United States, Australia, South Africa, and the United Kingdom. Although it is the largest holding in Burry’s Q4 portfolio, he trimmed his stake in The GEO Group, Inc. (NYSE:GEO) by 48% during the quarter, holding 1.06 million shares worth $11.6 million.

According to Insider Monkey’s third quarter database, 20 hedge funds were bullish on The GEO Group, Inc. (NYSE:GEO), compared to 17 funds in the last quarter. Kenneth Mario Garschina’s Mason Capital Management is the biggest stakeholder of the company, with 5.2 million shares worth $40.3 million.

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