In this article, we will discuss Michael Burry’s Top 10 Stock Picks Heading into 2025.
Established in May 2013, Scion Asset Management is a renowned and well-regarded California-based hedge fund founded by Michael Burry. The investment management firm focuses on long-term capital appreciation via fundamental research. The company targets undervalued or misunderstood investment opportunities globally. Michael Burry, a renowned figure in the financial world, shot to fame after his accurate predictions during the 2008 financial crisis. The hedge fund manager has a bachelor’s degree in economics from the University of California, Los Angeles. Also, he pursued an M.D. from Vanderbilt University School of Medicine.
After Michael Burry founded Scion Capital and predicted the late 2000s housing bubble burst, he rolled out Scion Asset Management in 2013, rebranding the prior fund.
Michael Burry Goes Long on China
As of now, Michael Burry remains optimistic about the Chinese economy, with Scion Asset Management significantly investing in renowned and well-established Chinese companies. Over the past few weeks, the Chinese stock market has seen a significant rally, with the Hang Seng Index increasing by ~17% and the SSE Composite Index rising by more than ~18% over the past month. Market experts believe that these increases primarily stemmed from the stimulus measures announced by the government.
As per the hedge fund’s 13F filing for the quarter that ended June 30, Michael Burry significantly increased his ownership in the Chinese tech companies, while liquidating his investments in gold and other companies belonging to solar, energy, and other sectors. The renowned investor also entered several new positions in sectors such as financial services, healthcare, beauty, and real estate industries. Over the past few weeks, there has been growing optimism about the Chinese economy.
BBVA Research believes that the Chinese economy has been witnessing structural rebalancing amid adjustments in real estate. Thanks to the large-scale stimulus package, the company expects that the economy will bottom out in the near term. Moving forward, the firm believes that the US and Europe’s rate cut cycle offers policy room for China’s easing measures. As and when the large China-US rate reversion sees normalization, there can be increased capital inflows and stronger RMB.
The prolonged rebound in China after the COVID-19 pandemic, offset by other sectors such as manufacturing and real estate, significantly dragged down China’s stock valuations, making it attractive for investors.
Peeking into Michael Burry’s Concentrated Portfolio
‘Big Short’ investor’s noteworthy move in Q2 2024 was a significant rise in his stake in a Chinese e-commerce giant. This stock is now the largest holding of the portfolio. Even though the Chinese regulatory landscape continues to evolve, it is demonstrating signs of easing. Therefore, market experts opine that this can help create a more favorable environment for Chinese technology companies.
Beyond e-commerce, the hedge fund manager’s Q2 2024 portfolio focuses on strategic allocation throughout varied sectors. Scion Asset Management appears to be going long on the payment processing sector also. Since the investment firm has a diversified portfolio, experts believe that the company is well-placed to navigate any short-term economic headwinds.
Michael Burry of Scion Asset Management
Our Methodology
To list Michael Burry’s Top 10 Stock Picks Heading into 2025, we sifted through Scion Asset Management’s latest 13F Holdings. From the list, we selected the top 10 stock picks, and the same are ranked in ascending order of the fund’s stakes in them.
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Michael Burry’s Top 10 Stock Picks Heading into 2025
10) BioAtla, Inc. (NASDAQ:BCAB)
Scion Asset Management’s Stake Value: $868,524
Number of Hedge Fund Holders: 12
BioAtla, Inc. (NASDAQ:BCAB) is a clinical-stage biopharmaceutical company, which is engaged in developing specific and selective antibody-based therapeutics for the treatment of solid tumor cancer.
Wall Street believes that the company’s focus on Conditionally Active Biologics (CABs) and Antibody-Drug Conjugates (ADCs) placed it well in the oncology market. The major focus of investors revolves around the potential for strategic partnerships, which BioAtla, Inc. (NASDAQ:BCAB) is actively pursuing for both Evalstotug and Ozuriftamab. Such partnerships are expected to offer valuable resources for late-stage clinical development and commercialization, and validation of the company’s technology platform.
While the competitive landscape in oncology remains intense, considering the established players and emerging biotechs battling for market share, BioAtla, Inc. (NASDAQ:BCAB)’s CAB technology acts as a potential differentiator. This targets to improve the therapeutic window of cancer treatments by enhancing efficacy while, at the same time, reducing off-target effects. CABs focuses on improving the therapeutic index of cancer treatments by designing antibodies that are preferentially active in the tumor microenvironment. This should result in more effective therapies with fewer side effects, addressing the critical unmet need in oncology.
BioAtla, Inc. (NASDAQ:BCAB)’s ADCs are garnering interest, which hints at the potential for future partnerships. Its strategic decisions, which include the prioritization of certain trials and the careful management of its cash reserves, demonstrate its commitment to sustainable growth. As per Wall Street, the shares of BioAtla, Inc. (NASDAQ:BCAB) have an average price target of $9.00.
9) Olaplex Holdings, Inc. (NASDAQ:OLPX)
Scion Asset Management’s Stake Value: $1,532,685
Number of Hedge Fund Holders: 18
Olaplex Holdings, Inc. (NASDAQ:OLPX) is engaged in developing, manufacturing, and selling hair care products in the US and internationally.
Olaplex Holdings, Inc. (NASDAQ:OLPX) has built its reputation on providing high-quality hair care solutions, serving both professional stylists and retail consumers. The company plans to unveil a comprehensive long-term roadmap and future vision in early 2025. The strategic plan will address market opportunities and consumer trends, which Olaplex Holdings, Inc. (NASDAQ:OLPX) can capitalize given its brand strength and product innovation. Collectively, these measures are expected to help expand its market share.
Olaplex Holdings, Inc. (NASDAQ:OLPX)’s established presence in both professional and retail channels offers a diverse revenue base, which can be leveraged for expansion into new product categories or geographic markets. Olaplex Holdings, Inc. (NASDAQ:OLPX) rolled out a new patented technology, Olaplex bond shaping technology, targeting the curly hair market. Significant marketing and advertising investments are being made in a bid to generate demand and support growth.
Olaplex Holdings, Inc. (NASDAQ:OLPX) expects an improvement in H2 2024, anticipating benefits from salon palleted kits, new product launches, and seasonal lift in Q4 2024. It focuses on key customers, rationalizing certain distributors, and prioritizing partners which builds brand equity. In the recent earnings call, the company reported stable sell-through throughout all the channels, and better underlying demand is anticipated in the latter half of the year.
Wall Street analysts remain optimistic about the stabilization of demand in the US and international markets, courtesy of the company’s loyal consumer base. Overall, Olaplex Holdings, Inc. (NASDAQ:OLPX)’s focus on innovative product launches, along with targeted marketing efforts to capitalize on the high-potential curly hair market, should act as a tailwind in the near term.