Michael Burry’s Top 15 Stock Picks For 2024

Published on March 22, 2024 at 9:13 am by Hamna Asim in Hedge Funds, News

In this article, we discuss Michael Burry’s top 15 stock picks for 2024. If you want to see the investor’s top 5 stock picks, head directly to Michael Burry’s Top 5 Stock Picks For 2024.

Michael Burry, the founder and manager of Scion Asset Management, increased his investments in Chinese tech giants Alibaba Group Holding Limited (NYSE:BABA) and JD.com, Inc. (NASDAQ:JD) during the fourth quarter of 2023, despite a continued decline in Chinese stock values. Following this move, Alibaba Group Holding Limited (NYSE:BABA) now holds the top position in Burry’s Scion Asset Management portfolio, with Scion raising its stake in the e-commerce powerhouse by 50% by the end of December. However, these investments have faced challenges, with Alibaba Group Holding Limited (NYSE:BABA)’s shares down 5% year-to-date and JD.com, Inc. (NASDAQ:JD) experiencing a nearly 15% year-to-date decline as of February 26 amidst a broader sell-off of Chinese stocks due to concerns over a property crisis and an economic slowdown. As per Bloomberg, this is not the first time Burry has bet on these companies. He initially invested in New York-listed Alibaba Group Holding Limited (NYSE:BABA) and JD.com, Inc. (NASDAQ:JD) in 2022 as China emerged from the pandemic, only to exit those positions in the second quarter of 2023 before re-entering them later in the year.

According to filings with the US Securities and Exchange Commission, Burry took a bearish stance on the S&P 500 and Nasdaq 100. In August 2023, CNN reported that Scion Asset Management purchased $866 million in PUT options against an S&P 500 tracking fund, as well as $739 million in PUT options against a Nasdaq 100 tracking fund. Previously, in September 2022, Michael Burry had predicted a severe stock market crash, likening it to the 2008 financial crisis. He also suggested that Elon Musk should consider shorting Tesla shares. However, by the end of March 2023, Burry admitted he had been wrong, retracting his previous warnings to investors to sell.

In 2024, as per Fortune, Michael Burry appears optimistic about streaming giants, contrasting with Warren Buffett’s skepticism. Scion Asset Management carved a stake in Warner Bros. Discovery, Inc. (NASDAQ:WBD) by purchasing 375,000 shares in the final quarter of 2023. Burry’s interest in the media company began well before its partnership with ESPN and Fox was announced. In this article, we discuss Michael Burry’s top stock picks heading into 2024. These include Alibaba Group Holding Limited (NYSE:BABA), JD.com, Inc. (NASDAQ:JD), and HCA Healthcare, Inc. (NYSE:HCA).

Our Methodology

We reviewed the Q4 2023 portfolio of Michael Burry’s Scion Asset Management and mentioned his top 15 stock picks heading into 2024. The list is ranked according to the hedge fund’s stake value in each firm. We have also assessed the hedge fund sentiment toward each stock from Insider Monkey’s database of 933 elite hedge funds tracked as of the end of the fourth quarter of 2023. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here).

Michael Burry's Top 15 Stock Picks For 2024

Michael Burry of Scion Asset Management

Michael Burry’s Top Stock Picks For 2024

15. Vital Energy, Inc. (NYSE:VTLE)

Scion Asset Management’s Stake Value: $3.98 million

Number of Hedge Fund Holders: 29

Vital Energy, Inc. (NYSE:VTLE) is an independent energy company that focuses on acquiring, exploring, and developing oil and natural gas properties in the Permian Basin of West Texas, USA. Established in 2006, the company is based in Tulsa, Oklahoma. In Q4 2023, Michael Burry added Vital Energy, Inc. (NYSE:VTLE) to his portfolio by purchasing 87,500 shares worth $3.98 million.

On February 21, Vital Energy, Inc. (NYSE:VTLE) reported a Q4 non-GAAP EPS of $2.55 and a revenue of $444.52 million, outperforming Wall Street estimates by $0.09 and $3.78 million, respectively.

According to Insider Monkey’s fourth quarter database, 29 hedge funds were bullish on Vital Energy, Inc. (NYSE:VTLE), compared to 30 funds in the last quarter. Sameer Sethna’s Aventail Capital Group held the largest position in the company, with 700,000 worth $31.84 million.

Like Alibaba Group Holding Limited (NYSE:BABA), JD.com, Inc. (NASDAQ:JD), and HCA Healthcare, Inc. (NYSE:HCA), Vital Energy, Inc. (NYSE:VTLE) is one of Michael Burry’s top stock picks.

14. Warner Bros. Discovery, Inc. (NASDAQ:WBD)

Scion Asset Management’s Stake Value: $4.267 million

Number of Hedge Fund Holders: 56

Warner Bros. Discovery, Inc. (NASDAQ:WBD) is a global media and entertainment company that operates in three segments – Studios, Network, and DTC. The company offers a range of content, brands, and franchises across television, film, streaming, and gaming. Some of its well-known brands include Warner Bros. Motion Picture Group, Warner Bros. Television Group, DC, Discovery Channel, CNN, and HBO. During the fourth quarter of 2023, Warner Bros. Discovery, Inc. (NASDAQ:WBD) was among Michael Burry’s top stock picks. He purchased 375,000 shares of the company worth around $4.27 million.

On February 23, Warner Bros. Discovery, Inc. (NASDAQ:WBD) announced a Q4 GAAP EPS of -$0.16 and a revenue of $10.28 billion, falling short of estimates by $0.10 and $140 million, respectively.

According to Insider Monkey’s fourth quarter database, 56 hedge funds were bullish on Warner Bros. Discovery, Inc. (NASDAQ:WBD), down from 63 funds in the previous quarter. Harris Associates is the largest shareholder of the company, with 79.5 million shares valued at $904.8 million.

Longleaf Partners Fund stated the following regarding Warner Bros. Discovery, Inc. (NASDAQ:WBD) in its fourth quarter 2023 investor letter:

“The rules have improved how we analyze existing holdings and influenced the price at which we will buy a new holding and/or trim or add to an existing one. This has resulted in a higher level of resizing positions in the portfolio and exiting some long-term holdings this year. A good example in the portfolio today is Warner Bros. Discovery, Inc. (NASDAQ:WBD), a company that we bought too early but that remains a holding in the portfolio. Our average price for the initial WBD investment in 2021 was $26.48, or a P/V ratio in the mid-60s%. However, P/EV on the initial report was 79%. Under the new rules, we would not pay that price for the company today. We most likely would have waited for a mid-60s% P/EV, which would have equated to a $mid-teens entry price. In this case, we would have missed a too-large initial downturn in the stock price. The overweight rule dictated that we trimmed the position after the price ran up in the first half of 2023, which benefitted overall performance as the stock price subsequently fell again. However, even with the new rule lens, we remain confident in our case for the business and management’s ability to deliver going forward.”

13. Advance Auto Parts, Inc. (NYSE:AAP)

Scion Asset Management’s Stake Value: $4.27 million

Number of Hedge Fund Holders: 32

Advance Auto Parts, Inc. (NYSE:AAP) supplies a range of automotive replacement parts, accessories, batteries, and maintenance products for both domestic and imported vehicles, including cars, vans, SUVs, and trucks of different sizes. Michael Burry’s stock picks for the fourth quarter of 2023 include Advance Auto Parts, Inc. (NYSE:AAP). He owned 70,000 shares of the stock valued at over $4.27 million. The company is a new addition to his Q4 portfolio.

According to Insider Monkey’s fourth quarter database, 32 hedge funds were bullish on Advance Auto Parts, Inc. (NYSE:AAP), compared to 34 funds in the preceding quarter. D E Shaw held the biggest position in the company, with 3.48 million shares worth $212.13 million.

Palm Valley Capital Management made the following comment about Advance Auto Parts, Inc. (NYSE:AAP) in its Q3 2023 investor letter:

“During the third quarter, the Fund had three positions that detracted from performance by more than 10 basis points: Crawford & Co. (ticker: CRD/A, CRD/B), Advance Auto Parts, Inc. (NYSE:AAP), and TrueBlue (ticker: TBI). Advance Auto Parts is in the middle of a turnaround to bring operating performance closer to peers. Second quarter profit was short of expectations as pricing didn’t cover cost inflation, but comparable store sales improved into quarter end. While the firm experienced a credit rating downgrade, the balance sheet is supported by significant owned real estate.”

12. Booking Holdings Inc. (NASDAQ:BKNG)

Scion Asset Management’s Stake Value: $4.43 million

Number of Hedge Fund Holders: 83

Booking Holdings Inc. (NASDAQ:BKNG) provides travel and restaurant reservation services online and through traditional methods worldwide. These services cover hotel bookings, flight reservations, activities, rental cars, vacation packages, cruises, and hotel distribution services. During Q4 2023, Michael Burry’s stock picks included Booking Holdings Inc. (NASDAQ:BKNG), with a stake of 1,250 shares valued at $4.43 million. Although, in Q4, Burry trimmed his position in the company by 17%.

On February 22, Booking Holdings Inc. (NASDAQ:BKNG) initiated a $8.75 per share quarterly dividend. It is to be paid on March 28 to shareholders of record as of March 8.

According to Insider Monkey’s fourth quarter database, 83 hedge funds were bullish on Booking Holdings Inc. (NASDAQ:BKNG), up from 81 funds in the previous quarter. Ken Fisher’s Fisher Asset Management held a significant position in the company, with 376,734 shares worth $1.34 billion.

Ensemble Capital Management stated the following regarding Booking Holdings Inc. (NASDAQ:BKNG) in its fourth quarter 2023 investor letter:

“Booking Holdings Inc. (NASDAQ:BKNG) (7.60% weight in the Fund): Earlier this year, Booking Holdings rolled out an AI trip planner. Traditionally Booking helps users find the right hotel by offering a search engine to define which city you want to stay in and apply various filters to narrow down the hotel options. With Booking’s AI Trip Planner, a user can use natural language such as “plan a road trip on Route 66, starting in Chicago and ending to Los Angeles.” The Trip Planner then engages with the user like a travel agent, suggesting which cities to stay in each night and various sights to see along the way. Once the trip is planned out, the user can use natural language to generate hotel options, such as by writing “My budget is $200 to $300 a night. It will be my husband and I traveling together.”

Booking’s experiments in AI demonstrate the value of proprietary data sets. While general AI systems such as ChatGPT are designed to answer questions about anything, focused AI systems that leverage a company’s unique data can be far more powerful when applied to specific use cases. With Booking’s AI Trip Planner, the system is unable to answer questions unrelated to making travel reservations. But on the other hand, it is far more likely to understand what the user wants since it already knows that the entire conversation will be about travel. Importantly, Booking’s AI Trip planner has access to the company’s enormous dataset that includes hotel ratings, popular hotels, and all sorts of detailed information about each hotel.”

11. MGM Resorts International (NYSE:MGM)

Scion Asset Management’s Stake Value: $4.47 million

Number of Hedge Fund Holders: 45

MGM Resorts International (NYSE:MGM) owns and runs casino, hotel, and entertainment resorts across the United States and internationally. The company operates through three segments – Las Vegas Strip Resorts, Regional Operations, and MGM China. MGM Resorts International (NYSE:MGM) is one of Michael Burry’s stock picks as of the fourth quarter of 2023. He purchased 100,000 shares of the stock worth $4.47 million.

On February 13, MGM Resorts International (NYSE:MGM) announced a Q4 non-GAAP EPS of $1.06 and a revenue of $4.38 billion, beating market consensus by $0.35 and $240 million, respectively.

According to Insider Monkey’s fourth quarter database, 45 hedge funds were bullish on MGM Resorts International (NYSE:MGM), down from 47 funds in the last quarter. Keith Meister’s Corvex Capital is the biggest shareholder of the company, with a position comprising 6.42 million shares worth $287 million.

Longleaf Partners Fund stated the following regarding MGM Resorts International (NYSE:MGM) in its fourth quarter 2023 investor letter:

“MGM Resorts International (NYSE:MGM) & Hyatt – Hospitality companies MGM Resorts and Hyatt were both strong performers in the fourth quarter and for the year, outperforming expectations that the post-COVID travel rebound would ease in 2023. Casino and online gaming company MGM saw double-digit revenue growth and strong 2023 bookings in Las Vegas in the first half, which moderated in the second half but remained solid. A cybersecurity attack negatively impacted 3Q results, but MGM does not expect the $100 million hit to have a material effect on its financial condition and operational results for the year. MGM bought back discounted shares at a 15% annualized rate and authorized another $2 billion buyback in 4Q, which represents another 15% of the company.”

10. Amazon.com, Inc. (NASDAQ:AMZN)

Scion Asset Management’s Stake Value: $4.56 million

Number of Hedge Fund Holders: 293

Amazon.com, Inc. (NASDAQ:AMZN) is one of the most popular Michael Burry stock picks. In Q4 2023, the investor added Amazon to his portfolio by buying 30,000 shares of the company valued at $4.56 million. On February 1, Amazon.com, Inc. (NASDAQ:AMZN) reported a Q4 EPS of $1.00 and a revenue of $169.96 billion, outperforming estimates by $0.20 and $3.7 billion, respectively.

According to Insider Monkey’s fourth quarter database, 293 hedge funds were bullish on Amazon.com, Inc. (NASDAQ:AMZN), an increase from 286 funds in the prior quarter. Ken Fisher’s Fisher Asset Management held the largest position in the company, with 42.24 million shares valued at $6.42 billion.

Polen Global Growth Strategy stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its fourth quarter 2023 investor letter:

“Amazon.com, Inc. (NASDAQ:AMZN), which saw significant price appreciation throughout much of 2023, saw its share price increase materially in Q4 following the company’s Q3 2023 earnings report. We have yet to see the long-awaited re-acceleration in AWS (Amazon Web Services) revenue growth. However, in our estimation, the segment’s growth has likely bottomed, and we could see accelerating growth in 2024. Further, Amazon’s e-commerce business has gradually re-accelerated from 2022’s levels and, perhaps most importantly, the company’s margins and free cash flow have rebounded materially from last year. This rebound in margins and free cash flow at Amazon has been a key component of our long-term thesis for the business, and we expect the improvement in these metrics to continue into 2024 and beyond (though perhaps not linearly) as the company continues to optimize costs and capital expenditures. Our position in Amazon reflects our positive long-term expectations of the business, and it is currently our largest absolute weight in the Portfolio.”

9. Star Bulk Carriers Corp. (NASDAQ:SBLK)

Scion Asset Management’s Stake Value: $4.68 million

Number of Hedge Fund Holders: 21

Star Bulk Carriers Corp. (NASDAQ:SBLK) is a shipping company that operates globally, transporting dry bulk cargo across oceans. The company’s vessels carry bulk commodities such as iron ore, minerals, grains, bauxite, fertilizers, and steel products. Founded in 2006, the company is headquartered in Marousi, Greece. Star Bulk Carriers Corp. (NASDAQ:SBLK) is one of the top Michael Burry stock picks as of the fourth quarter of 2023, with a stake comprising 220,208 shares worth $4.68 million.

On February 13, Star Bulk Carriers Corp. (NASDAQ:SBLK) declared a $0.45 per share quarterly dividend, an increase from the previous dividend of $0.22. It is to be paid on March 28 to shareholders on record as of March 12.

According to Insider Monkey’s fourth quarter database, 21 hedge funds were bullish on Star Bulk Carriers Corp. (NASDAQ:SBLK), up from 14 funds in the preceding quarter. Howard Marks’ Oaktree Capital Management is the largest position holder in the company, with 6.11 million shares worth around $130 million.

Here is what Massif Capital has to say about Star Bulk Carriers Corp. in its Q3 2021 investor letter:

“We initiated one long position, one short position and exited one position during the third quarter. Our new long position was in Star Bulk Carriers (SBLK), a pure-play dry bulk operator with roughly 120 controlled vessels and 14 million tons of combined cargo capacity globally.

SBLK has one of the better management teams in the maritime shipping industry and the lowest cost structure among all dry bulk names. After announcing their new dividend policy in May, SBLK now has one of the best payout structures in shipping. The firm has paid out $0.3 and $0.7 per share in dividends for the first and second quarters of 2021. SBLK will most likely announce a dividend for the third quarter somewhere in the $1.15-$1.25 per
share range, depending on movement in net working capital.

We believe the best way to look at this business is through cash generation potential and how much is returned to investors. The current equity valuation does not reflect current rates for shipping (earnings), partly because of the velocity of the move in rates and because shipping cycles turn, and it’s not clear whether this is a local top or the early innings of a multi-year cycle. Our belief is the latter. Part of our catalyst is the market re-rating the stock higher once the length of the increased earnings power becomes understood. It is a relatively strong catalyst in the sense that with a strong dividend policy, we can be patient for the market to underwrite this story as the cash is either returned to us via a high dividend yield if the market is either slow or chooses not to join our side of the trade.

Our estimates suggest a time-charter equivalent rate (net profit or loss of operating a vessel daily) of at least $30,000 for SBLK in Q4, with the firm earning a potential annual average of $26,000. Our base case is that this is a strong floor going into next year, with little need to articulate much more upside. If rates hold, which we expect them to do, we could see a 20+% annual dividend next year for SBLK. If the market priced the equity such that the dividend yield was 8%, that implies a $62 stock. Today our base case target for the firm is $37 per share. This is likely conservative as we know that third-quarter rates are higher than the second quarter, and third-quarter dividends will most likely reflect that. We are cautious about diving too deep into the sensitivities to the upside with this position as we are arriving at some pretty remunerative torque using current contracted values and seemingly conservative forecasts…”

8. Alphabet Inc. (NASDAQ:GOOG)

Scion Asset Management’s Stake Value: $4.89 million

Number of Hedge Fund Holders: 166

Among Michael Burry’s top stock picks for the fourth quarter of 2023 is Alphabet Inc. (NASDAQ:GOOG). He purchased 35,000 shares of the company worth $4.89 million. On January 30, Alphabet Inc. (NASDAQ:GOOG) reported a Q4 GAAP EPS of $1.64 and a revenue of $86.31 billion, outperforming Wall Street estimates by $0.04 and $1.04 billion, respectively.

According to Insider Monkey’s fourth quarter database, 166 hedge funds were bullish on Alphabet Inc. (NASDAQ:GOOG), compared to 163 funds in the prior quarter. Ken Fisher’s Fisher Asset Management held the top position in the company, with 45.2 million shares worth approximately $6.32 billion.

The FPA Crescent Fund stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its fourth quarter 2023 investor letter:

“Alphabet Inc. (NASDAQ:GOOG) continued going from strength to strength during 2023 despite concerns that competition may infringe on the company’s dominant position in Search. Thus far, Alphabet has continued to hold its own, and we look forward to seeing how the company incorporates further AI developments across the Alphabet ecosystem. Lastly, we are hopeful that the impending arrival of a new CFO will bring a renewed focus on efficiency – an area where we believe Alphabet has ample room for improvement.”

7. Nexstar Media Group, Inc. (NASDAQ:NXST)

Scion Asset Management’s Stake Value: $5.09 million

Number of Hedge Fund Holders: 31

Nexstar Media Group, Inc. (NASDAQ:NXST) is a company in the television broadcasting and digital media industry. Nexstar is involved in acquiring, developing, and operating television stations, as well as interactive community websites and digital media services across the United States. One of Michael Burry’s stock picks for the fourth quarter of 2023 is Nexstar Media Group, Inc. (NASDAQ:NXST). He acquired 32,500 shares valued at $5.09 million.

On January 26, Nexstar Media Group, Inc. (NASDAQ:NXST) declared a $1.69 per share quarterly dividend, a 25% increase from the prior dividend of $1.35. It was paid on February 23.

According to Insider Monkey’s fourth quarter database, 31 hedge funds were bullish on Nexstar Media Group, Inc. (NASDAQ:NXST), same as the previous quarter. Amy Minella’s Cardinal Capital is the top stakeholder of the company, with 616,022 shares valued at $96.56 million.

Here is what Richie Capital Group has to say about Nexstar Media Group, Inc. (NASDAQ:NXST) in its Q1 2022 investor letter:

“Nexstar Media Group (NXST up 24.8%) – The television broadcasting and digital media company surged during the quarter after presenting at an investor conference where management pointed to a strong 2022 for both political advertising and retransmission. They have exposure to more than 80% of markets with competitive mid-term political races. NXST is developing new ad categories such as sports betting and they are focused on expanding digital ad revenue and providing digital solutions to local advertisers. Auto advertising will return in the fall as auto dealerships re-enter the market to sell their replenished inventory.”

6. CVS Health Corporation (NYSE:CVS)

Scion Asset Management’s Stake Value: $5.13 million

Number of Hedge Fund Holders: 67

CVS Health Corporation (NYSE:CVS) offers health solutions across the United States. The company operates through three segments – Health Care Benefits, Health Services, and Pharmacy & Consumer Wellness. Michael Burry’s stock picks for the fourth quarter of 2023 featured CVS Health Corporation (NYSE:CVS), the position comprising 65,000 shares valued at $5.13 million.

On February 7, CVS Health Corporation (NYSE:CVS) announced a Q4 non-GAAP EPS of $2.12 and a revenue of $93.8 billion, outperforming Street estimates by $0.13 and $3.08 billion, respectively.

According to Insider Monkey’s fourth quarter database, 67 hedge funds were bullish on CVS Health Corporation (NYSE:CVS), up from 64 funds in the last quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP held the largest position in the company, with around 4.85 million shares worth $382.67 million.

In addition to Alibaba Group Holding Limited (NYSE:BABA), JD.com, Inc. (NASDAQ:JD), and HCA Healthcare, Inc. (NYSE:HCA), CVS Health Corporation (NYSE:CVS) is one of Michael Burry’s top stock picks.

In its fourth quarter 2023 investor letter, Vltava Fund stated the following regarding CVS Health Corporation (NYSE:CVS):

“Not every transaction creates value. Some transactions destroy company value. An example of such transaction is CVS Health Corporation (NYSE:CVS)’s acquisition of Oak Street Health in early 2023. This acquisition cost CVS $10.6 billion, and, based on metrics cited by the company itself, it seems to us that it was a waste of money for the most part. Unfortunately, CVS has its own history of overpriced acquisitions. The last one prior to that was in 2018, when CVS bought health insurer Aetna for $69 billion. We had assumed that CVS management, which has since changed, would recognise that mistake and learn from it. We were wrong. The acquisition of Oak Street Health is both disappointing and a warning to us. We now have a company in our portfolio whose capital allocation we consider to be poor and that should not be there. Unfortunately, the situation is complicated by the fact that the CVS stock is now very cheap and therefore we are reluctant to dispose of it just yet. We probably will do so, however, when the opportunity arises.”

Click to continue reading and see Michael Burry’s Top 5 Stock Picks For 2024.