In this article, we discuss the 3 stocks that Michael Burry is selling. If you want to read about Burry’s history, investment philosophy, and hedge fund performance, go directly to Michael Burry is Shorting Apple and Selling These 5 Stocks in 2022.
3. Fidelity National Financial, Inc. (NYSE:FNF)
Number of Hedge Fund Holders as of December 31: 40
Fidelity National Financial, Inc. (NYSE:FNF) is a Jacksonville, Florida-based provider of title insurance and settlement services to the real estate and mortgage industries. Scion Asset Management initiated a position in Fidelity National Financial, Inc. (NYSE:FNF) in Q4 2021 through 325,000 shares bought at an average quarterly price of $49.7 per share. The holding was entirely sold off in Q1 2022.
Fidelity National Financial, Inc. (NYSE:FNF) has been a deeply cyclical stock and is expected to remain so in the future. In April, Mark DeVries at Barclays reduced the price target on Fidelity National Financial, Inc. (NYSE:FNF) from $74 to $73. The analyst shared that the long refinance wave is likely to come to an abrupt end due to the rising mortgage rates. This would adversely impact the profitability and valuations of companies like Fidelity National Financial, Inc. (NYSE:FNF).
Overall, 40 hedge funds reported owning a stake in Fidelity National Financial, Inc. (NYSE:FNF), up from 32 in the previous quarter.
2. General Dynamics Corporation (NYSE:GD)
Number of Hedge Fund Holders as of December 31: 48
General Dynamics Corporation (NYSE:GD) is a Reston, Virginia-based aerospace and defense company. Scion Asset Management first bought a stake in General Dynamics Corporation (NYSE:GD) through 80,000 shares at an average quarterly price of $201.93 per share. The holding was completely sold off in Q1 2022.
Although the companies operating in the defense sector have been in the limelight since the start of the Russia-Ukraine conflict, the highly profitable jet business of General Dynamics Corporation (NYSE:GD) is expected to face a headwind due to the sanctions placed on Russia. Gulfstream, General Dynamics Corporation’s (NYSE:GD) subsidiary, was the preferred choice of the premier jet brand amongst the wealthy Russians, and the sanctions are expected to hamper General Dynamics Corporation’s (NYSE:GD) growth momentum. Gulfstream is responsible for generating around 35% of the company’s operating profit.
Overall, 48 hedge funds held a stake in General Dynamics Corporation (NYSE:GD) at the end of Q4 2021, up from 36 in the preceding quarter.
1. The GEO Group, Inc. (NYSE:GEO)
Number of Hedge Fund Holders as of December 31: 16
The GEO Group, Inc. (NYSE:GEO) is involved in developing, managing, and operating prisons and mental health facilities across Australia, North America, South Africa, and the United Kingdom.
Michael Burry’s Scion Asset Management opened a position in The GEO Group, Inc. (NYSE:GEO) in Q4 2020 with over 845,000 shares. In the following quarter, Burry sold off the entire holding. A position was reinitiated in Q2 2021 with 2.5 million shares at an average quarterly share price of $6.3. Burry reduced his holding in The GEO Group, Inc. (NYSE:GEO) in Q3 and Q4 till he completely closed the position in Q1 2022.
The GEO Group, Inc. (NYSE:GEO) followed CoreCivic’s action of abandoning the real estate investment trust (REIT) structure in December 2021, which resulted in a drop in stock price. The company announced that it would stop its quarterly dividend payments to investors. The prison management industry is a labor-intensive and low-margin business that is heavily swayed by the change in political stance on crime prevention.
Israel Englander’s Millennium Management was the leading hedge fund investor in The GEO Group, Inc. (NYSE:GEO), with a stake valued at $21.37 million as of Q1 2022.
You can also take a peek at the 12 Best US Stocks to Buy Now and 10 European Defense Stocks to Buy Now.
