In this article, we discuss the 4 stocks Michael Burry is loading up on. If you want to read our detailed analysis of these stocks, go directly to Michael Burry is Loading Up on These 9 Stocks.
4. CVS Health Corporation (NYSE: CVS) CALL
Number of Hedge Fund Holders: 67
Percentage Increase in Stake During Q2: 32%
CVS Health Corporation (NYSE: CVS) is ranked fourth on our list of 9 stocks Michael Burry is loading up on. The company provides healthcare services and operates from Rhode Island. Regulatory filings reveal that Scion Asset Management owned CALL options on 525,300 shares in the firm at the end of the second quarter of 2021 worth $43.8 million, representing 2.1% of the portfolio.
On August 5, investment advisory Deutsche Bank maintained a Buy rating on CVS Health Corporation (NYSE: CVS) stock and raised the price target to $101 from $95. George Hill, an analyst at the firm, issued the ratings update.
Out of the hedge funds being tracked by Insider Monkey, Chicago-based firm Harris Associates is a leading shareholder in CVS Health Corporation (NYSE: CVS) with 8.5 million shares worth more than $713 million.
In its Q1 2021 investor letter, Vulcan Value Partners, an asset management firm, highlighted a few stocks and CVS Health Corporation (NYSE: CVS) was one of them. Here is what the fund said:
“We sold our position in CVS Health Corp. to allocate capital to companies with larger margins of safety. During the five years that we owned CVS Health Corp., the company acquired Aetna. At the time, we also owned Aetna, and we believed the combination of the two companies would create additional value. After the acquisition, its business performance has been disappointing. We reevaluated our assumptions and determined its value has not grown.”
3. The Kraft Heinz Company (NASDAQ: KHC) CALL
Number of Hedge Fund Holders: 33
Percentage Increase in Stake During Q2: 22%
The Kraft Heinz Company (NASDAQ: KHC) is a Pennsylvania-based food and beverage firm. It is placed third on our list of 9 stocks Michael Burry is loading up on. 13F filings reveal that Scion Asset Management owned CALL options on more than 1.4 million shares in the firm at the end of June 2021 worth $58.1 million, representing 2.79% of the portfolio.
On August 20, investment advisory Piper Sandler maintained a Neutral rating on The Kraft Heinz Company (NASDAQ: KHC) stock and lowered the price target to $39 from $41, noting the ratings update reflected accounting for stranded costs and input cost inflation.
Out of the hedge funds being tracked by Insider Monkey, Nebraska-based investment firm Berkshire Hathaway is a leading shareholder in The Kraft Heinz Company (NASDAQ: KHC) with 325 million shares worth more than $13 billion.
In its Q4 2020 investor letter, Berkshire Hathaway highlighted a few stocks and The Kraft Heinz Company (NASDAQ: KHC) was one of them. Here is what the firm said:
“We exclude our Kraft Heinz holding — 325,442,152 shares — (In the list of 15 common stock investments that at yearend were our largest in market value) because Berkshire is part of a control group and therefore must account for that investment using the “equity” method. On its balance sheet, Berkshire carries the Kraft Heinz holding at a GAAP figure of $13.3 billion, an amount that represents Berkshire’s share of the audited net worth of Kraft Heinz on December 31, 2020.
Berkshire and its subsidiaries hold investments in certain businesses that are accounted for pursuant to the equity method. Currently, the most significant of these is our investment in the common stock of The Kraft Heinz Company (“Kraft Heinz”). Kraft Heinz is one of the world’s largest manufacturers and marketers of food and beverage products, including condiments and sauces, cheese and dairy, meals, meats, refreshment beverages, coffee and other grocery products. Berkshire currently owns 325,442,152 shares of Kraft Heinz common stock representing 26.6% of the outstanding shares.
We recorded equity method earnings from our investment in Kraft Heinz of $95 million in 2020, $493 million in 2019 and losses of approximately $2.7 billion in 2018. Equity method earnings (losses) included the effects of goodwill and identifiable intangible asset impairment charges recorded by Kraft Heinz. Our share of such charges was approximately $850 million in 2020, $450 million in 2019 and $3.7 billion in 2018. We received dividends from Kraft Heinz of $521 million in each of 2020 and 2019 and $814 million in 2018, which we recorded as reductions in our carrying value.
Shares of Kraft Heinz common stock are publicly-traded and the fair value of our investment was approximately $11.3 billion at December 31, 2020 and $10.5 billion at December 31, 2019. The carrying value of our investment was approximately $13.3 billion at December 31, 2020 and $13.8 billion at December 31, 2019. As of December 31, 2020, the carrying value of our investment exceeded the fair value based on the quoted market price by $2.0 billion (15% of carrying value). In light of this fact, we evaluated our investment in Kraft Heinz for impairment. We utilize no bright-line tests in such evaluations. Based on the available facts and information regarding the operating results of Kraft Heinz, our ability and intent to hold the investment until recovery, the relative amount of the decline and the length of time that fair value was less than carrying value, we concluded that recognition of an impairment loss in earnings was not required. However, we will continue to monitor this investment and it is possible that an impairment loss will be recorded in earnings in a future period based on changes in facts and circumstances or intentions.”
2. Alphabet Inc. (NASDAQ: GOOG) CALL
Number of Hedge Fund Holders: 155
Percentage Increase in Stake During Q2: 15%
Alphabet Inc. (NASDAQ: GOOG) is a California-based technology company. It is ranked second on our list of 9 stocks Michael Burry is loading up on. Latest data shows that Scion Asset Management owned CALL options on 91,900 shares in the company at the end of the second quarter of 2021 worth over $230 million, representing 11.06% of the portfolio.
On July 28, investment advisory Wedbush reiterated an Outperform rating on Alphabet Inc. (NASDAQ: GOOG) stock and raised the price target to $3,424 from $3,127, noting that the company had posted “another stellar quarter” with strong earnings beats.
Out of the hedge funds being tracked by Insider Monkey, London-based investment firm TCI Fund Management is a leading shareholder in the firm with 2.9 million shares worth more than $7.3 billion.
In its Q1 2021 investor letter, Artisan Partners, an asset management firm, highlighted a few stocks and Alphabet Inc. (NASDAQ: GOOG) was one of them. Here is what the fund said:
“Large-cap tech companies have been resilient through the pandemic—Alphabet among them. A top contributor, Alphabet’s Play Store and Google Cloud are in demand as businesses accelerate online activity which, along with strong YouTube user growth, is helping stabilize temporarily weaker search ad revenue trends. Through the lens of our disciplined bottom-up research process, we view Alphabet as one of the best businesses in the world, capable of expanding revenues at a rapid rate for years to come, with a bullet proof balance sheet and an average asking price. It’s a name we’ve owned since 2012 and for which we continue to have high hopes regarding future prospects.”
1. Facebook, Inc. (NASDAQ: FB) CALL
Number of Hedge Fund Holders: 266
Percentage Increase in Stake During Q2: 72%
Facebook, Inc. (NASDAQ: FB) is placed first on our list of 9 stocks Michael Burry is loading up on. The company owns and runs several social media platforms. It is headquartered in California. Latest filings show that Scion Asset Management owned CALL options on 941,200 shares in the company at the end of the second quarter of 2021 worth over $327 million, representing 15.71% of the portfolio.
On July 29, investment advisory Evercore maintained an Outperform rating on Facebook, Inc. (NASDAQ: FB) stock and raised the price target to $450 from $400, underlining that the firm was posting strong growth and the advisory was bullish on the long-term outlook.
At the end of the second quarter of 2021, 266 hedge funds in the database of Insider Monkey held stakes worth $42 billion in Facebook, Inc. (NASDAQ: FB), up from 257 in the preceding quarter worth $40 billion.
In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Facebook, Inc. (NASDAQ: FB) was one of them. Here is what the fund said:
“We continued to keep our learnings from 2020 in mind during the quarter as we sought to increase the up capture of the portfolio. We also made adjustments to the portfolio’s top 10 holdings to increase the participation of select stocks, including Facebook, while trimming our weighting to stable names, which now represent 47% of the portfolio. Our repositioning has been encouraging so far with the portfolio performing better on up days in the market while maintaining good down capture during more turbulent sessions.”
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