In this article, we discuss the top 10 stock picks of Michael Burry’s Scion Asset Management as of Q2 2023. To skip the investment philosophy and details of Michael Burry’s Q2 bets, go directly to 5 Stocks To Buy According to Michael Burry.
Michael Burry is one of the most prominent investors in the world. He was one of the first few to predict the subprime mortgage crisis which led to the Great Financial Crisis of 2007-2009. He made a personal profit of $100 million and generated $700 million for his investors by shorting the mortgage bond market. Initially, Burry’s investors were quite pessimistic about his decision and wanted to withdraw their investments. However, Michael Burry defended himself in his third quarter 2005 investor letter by saying:
“Sometimes, markets err big time. Markets erred when they gave America Online the currency to buy Time Warner. They erred when they bet against George Soros and for the British Pound. And they are erring right now by continuing to float along as if the most significant credit bubble history has ever seen does not exist. Opportunities are rare, and large opportunities on which one can put nearly unlimited capital to work at tremendous potential returns are even more rare. Selectively shorting the most problematic mortgage-backed securities in history today amounts to just such an opportunity.”
Michael Burry closed his firm in 2008 after recording returns of 489.34% since its inception in 2000. Michael Burry reopened his firm by the name of Scion Asset Management in 2013. Since then, Burry has been making long-short value bets in the stock market.
As of the second quarter of 2023, Michael Burry is shorting the stock market again as he purchased $886.560 million and $739 million of SPDR S&P 500 ETF Trust and Invesco QQQ ETF puts, respectively. At the time of writing on the August 17 market close, SPDR S&P 500 ETF is down by almost 4% in the last month while Invesco QQQ ETF is down by over 7% in the last month. Analysts still have mixed sentiments regarding the S&P 500 (tracked by SPDR S&P 500 ETF). Goldman Sachs raised its end-of-year target for the S&P 500 from 4,000 to 4,500, which is 4,365 at the time of writing. On the other hand, a May 23 poll by Reuters shows that 43 Wall Street strategists expect a decline by the end of the year to 4,150.
Scion Asset Management Stock Bets in Q2
Apart from shorting the two ETFs, Michael Burry sold out 15 stocks, most of which were bank stocks, including First Republic Bank (NYSE:FRC), Western Alliance Bancorporation (NYSE:WAL), and Capital One Financial Corp. (NYSE:COF). To see other notable exits by Michael Burry in Q2 2023, you can check out Michael Burry is Shorting the Market (Again) and Selling These 10 Stocks.
Scion Asset Management added 27 new stocks to its portfolio in the second quarter, including NexTier Oilfield Solutions Inc. (NYSE:NEX) and Hanesbrands Inc. (NYSE:HBI). According to its 13F filings, the firm’s portfolio was worth approximately $1.74 billion in Q2, compared to $107 million in the previous quarter. Since its inception in 2013, Scion Asset Management has gained nearly 258%. Expedia Group, Inc. (NASDAQ:EXPE), Charter Communications, Inc. (NASDAQ:CHTR), and Generac Holdings Inc. (NYSE:GNRC) are some of the most significant Q2 holdings of the firm.
Michael Burry of Scion Asset Management
Our Methodology
To compile our list of stocks for Michael Burry’s stock portfolio, we used Scion Asset Management’s Q2 2023 13F filings and picked the top ten stocks from the portfolio. For a better understanding of the readers, we also mentioned the hedge fund sentiment around several stocks which was taken from Insider Monkey’s database of 910 elite hedge funds.
Michael Burry Stock Portfolio: 10 Stocks To Buy Now
10. Warner Bros. Discovery, Inc. (NASDAQ:WBD)
Percentage of Scion Asset Management’s portfolio as of Q2 2023: 0.27%
Warner Bros. Discovery, Inc. (NASDAQ:WBD) is rolling in cash as its movie based on Mattel, Inc. (NASDAQ:MAT)’s doll, Barbie, has been shattering box office records. The movie topped $1 billion in the first three weeks of its release. The movie has become Warner Bros. Discovery, Inc. (NASDAQ:WBD)’s biggest domestic hit, grossing $537 million in domestic sales, compared to The Dark Knight’s $536 million in 2008.
In the last three months, 7 out of 10 Wall Street analysts are bullish on Warner Bros. Discovery, Inc. (NASDAQ:WBD)’s stock and maintain a Buy rating. The overall average analyst price target is $20.88.
Warner Bros. Discovery, Inc. (NASDAQ:WBD) holds the 10th position in Michael Burry’s Stock portfolio with 375,000 shares worth over $4.7 million.
Warner Bros. Discovery, Inc. (NASDAQ:WBD), Expedia Group, Inc. (NASDAQ:EXPE), Charter Communications, Inc. (NASDAQ:CHTR), and Generac Holdings Inc. (NYSE:GNRC) are some of the top stocks to buy according to Michael Burry’s stock portfolio.
Smead Capital Management made the following comment about Warner Bros. Discovery, Inc. (NASDAQ:WBD) in its first quarter 2023 investor letter:
“Our best-performing stocks in the quarter were Warner Bros. Discovery, Inc. (NASDAQ:WBD), NVR (NVR) and Lennar (LEN). Warner was our worst performer in Q4 2022 and bounced back from tax selling. The home builders fooled everyone by growing their market share and making good money in the violent Fed tightening of 2022-2023.”
9. Signet Jewelers Limited (NYSE:SIG)
Percentage of Scion Asset Management’s portfolio as of Q2 2023: 0.31%
Signet Jewelers Limited (NYSE:SIG) is the global leader in diamond jewelry. It is one of the few stocks that Michael Burry has retained in the second quarter of 2023. Burry’s firm owned 85,000 of the company shares worth $5.547 million, representing 0.31% of its portfolio.
On July 18, Signet Jewelers Limited (NYSE:SIG) started its first fine jewelry rental program. The program targets special occasions and consumers can rent jewelry to try it on before making any purchase.
8. Vital Energy, Inc. (NYSE:VTLE)
Percentage of Scion Asset Management’s portfolio as of Q2 2023: 0.32%
Vital Energy, Inc. (NYSE:VTLE) is an independent oil and gas exploration and production company headquartered in Oklahoma. It is another new addition to Michael Burry’s stock portfolio in Q2 2023. Scion Asset Management owned 125,000 shares of Vital Energy, Inc. (NYSE:VTLE) worth $5.643 million.
On May 12, Vital Energy, Inc. (NYSE:VTLE) announced the expansion of its operations in the Permian Basin with the acquisition of 70% of Forge Energy II Delaware’s assets. The acquisition was priced at $378 million.
7. Stellantis N.V. (NYSE:STLA)
Percentage of Scion Asset Management’s portfolio as of Q2 2023: 0.32%
Stellantis N.V. (NYSE:STLA) is a Dutch automotive company. As of 2022, it is the largest automaker by units sold and the 7th largest all-electric vehicle manufacturer. Stellantis N.V. (NYSE:STLA) owns 16 well-known brands, including Alfa Romeo, Chrysler, Dodge, Maserati, and Peugeot along with others.
In Q2, SRS Investment Management was the most prominent hedge fund holder of the company with nearly 8.5 million shares worth $148.525 million.
Miller Value Partners made the following comment about Stellantis N.V. (NYSE:STLA) in its second quarter 2023 investor letter:
“We initiated a starter position in Stellantis N.V. (NYSE:STLA), which makes Jeep, Dodge and Fiat cars. The company has a nearly 8% dividend yield with enough net cash (cash minus debt) on the balance sheet to cover the dividend for almost five years. The company trades at 1.7x operating profits, which means the market is already expecting a likely drop in cash flow. Still, the shares appear to be worth meaningfully more than where they trade, and management is heavily aligned with stockholders with a 14% stake. They share our view that the valuation is compelling, as the company plans on repurchasing ~3% of shares outstanding this year.”
6. MGM Resorts International (NYSE:MGM)
Percentage of Scion Asset Management’s portfolio as of Q2 2023: 0.37%
MGM Resorts International (NYSE:MGM) is an American hospitality company. The company operates hotels, casinos, and resorts. MGM Resorts International (NYSE:MGM) also manages a sports betting brand, BetMGM, which expanded to the UK on August 17.
On August 2, MGM Resorts International (NYSE:MGM) released its Q2 results reporting a non-GAAP EPS of $0.59, compared to $0.52 analyst estimates.
MGM Resorts International (NYSE:MGM) covered 0.37% of Scion Asset Management’s portfolio with 150,000 shares worth $6.588 million.
Expedia Group, Inc. (NASDAQ:EXPE), Charter Communications, Inc. (NASDAQ:CHTR), and Generac Holdings Inc. (NYSE:GNRC) are some of the most prominent names in Scion Asset Management’s portfolio along with MGM Resorts International (NYSE:MGM).
Baron Real Estate Fund made the following comment about MGM Resorts International (NYSE:MGM) in its first quarter 2023 investor letter:
“MGM Resorts International (NYSE:MGM) is a leading global casino and entertainment company with 29 unique hotels and casinos including some of the most recognizable resort brands such as Bellagio, MGM Grand, ARIA, and Park MGM.
At its recent price of only $44 per share, we believe MGM’s domestic valuation is compelling at a sizeable discount to our estimate of the company’s sum-of-the-parts value of approximately $60 per share.
MGM Resorts International is a global casino and entertainment company that has properties in Las Vegas, high-end U.S. regional destinations, and Macau. Shares performed well in the first quarter following strong year-end business results and expectations for strong growth in 2023.
We remain optimistic about the prospects for MGM because:
We expect growth prospects in Las Vegas, which represent approximately 65% of the company’s cash flow, to remain strong due to strength in business group and convention activity, an increase in international visitation, and events throughout the calendar year (concerts, shows, and sports such as Formula 1 racing), which should appeal to leisure travelers…” (Click here to read the full text)
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Disclosure. None. Michael Burry Stock Portfolio: 10 Stocks To Buy Now is originally published on Insider Monkey.
