Michael Burry (Trades, Portfolio), the famed investor covered in Michael Lewis’ book, “The Big Short,” and portrayed by Christian Bale in a 2015 movie of the same name, released the second-quarter equity portfolio for Scion Asset Management on Monday.
Having predicted the subprime housing bubble would burst prior to the financial crisis in 2008, Burry made a killing by betting against collateralized mortgage obligations. Influenced by Warren Buffett (Trades, Portfolio) and Benjamin Graham, the guru’s Cupertino, California-based firm, which was founded in 2013, is known for its value-focused, contrarian investing strategy. It also has a history of managing a fairly concentrated portfolio.
Based on these guidelines, 13F filings show he entered 25 new positions during the three months ended June 30, sold out of 15 stocks and added to or trimmed a number of other holdings. His most notable sells for the quarter were JD.com Inc. (JD, Financial) and Alibaba Group Holding Ltd. (BABA, Financial), while his top new buys were Expedia Group Inc. (EXPE, Financial) and Charter Communications Inc. (CHTR, Financial).
Investors should be aware 13F filings do not give a complete picture of a firm’s holdings as the reports only include its positions in U.S. stocks and American depository receipts, but they can still provide valuable information. Further, the reports only reflect trades and holdings as of the most-recent portfolio filing date, which may or may not be held by the reporting firm today or even when this article was published.
JD.com
The guru dumped all 250,000 shares of JD.com (JD, Financial), impacting the equity portfolio by -10.26%. The stock traded for an average price of $36.50 per share during the quarter.
GuruFocus estimates Burry lost 13% on the investment, which was established in the fourth quarter of 2022. It was previously his largest position.
The Chinese e-commerce company based in Beijing has a $57.55 billion market cap; its shares were trading around $36.74 on Monday with a price-earnings ratio of 20.90, a price-book ratio of 1.88 and a price-sales ratio of 0.38.
The GF Value Line suggests the stock is currently significantly undervalued based on its historical ratios, past financial performance and analysts’ future earnings projections.
On the back of high ratings for growth and financial strength, the company is likely to have average performance going forward with a GF Score of 72 out of 100. The profitability and value ranks are more moderate, while momentum is low.
Of the gurus invested in JD.com, Chase Coleman (Trades, Portfolio) has the largest stake with 1.54% of its outstanding shares. Dodge & Cox, Chris Davis (Trades, Portfolio), Ken Fisher (Trades, Portfolio) and Ron Baron (Trades, Portfolio) also have significant positions.
Alibaba
Burry exited his 100,000-share holding of Alibaba (BABA, Financial). The transaction had an impact of -9.56% on the equity portfolio. Shares traded for an average price of $87.76 each during the quarter.
GuruFocus data shows he lost 1.17% on the short-lived investment. It was previously his second-largest position.
The Chinese e-commerce company has a market cap of $238.61; its shares were trading around $93.69 on Monday with a price-earnings ratio of 20.28, a price-book ratio of 1.69 and a price-sales ratio of 1.90.
According to the GF Value Line, the stock is modestly undervalued currently.
The GF Score of 85 means the company has good outperformance potential, driven by solid ratings for profitability, growth, financial strength and value. The momentum rank is low.
With a 1.48% stake, David Herro (Trades, Portfolio) is Alibaba’s largest guru shareholder. Other top guru investors include PRIMECAP Management (Trades, Portfolio), Dodge & Cox, Fisher, Steven Cohen (Trades, Portfolio), Baron and Daniel Loeb (Trades, Portfolio).
Expedia Group
The investor picked up 100,000 shares of Expedia Group (EXPE, Financial), dedicating 0.63% of the equity portfolio to the holding. During the quarter, the stock traded for an average per-share price of $98.
GuruFocus found it is now the largest position in the portfolio.
The online travel agency headquartered in Seattle, which owns booking sites like Expedia.com, Vrbo, Travelocity, Trivago and Orbitz, among others, has a $15.99 billion market cap; its shares were trading around $111.52 on Monday with a price-earnings ratio of 19.63, a price-book ratio of 9.16 and a price-sales ratio of 1.40.
Based on the GF Value Line, the stock, while undervalued, appears to be a possible value trap. As such, potential investors should do thorough research before making a decision.
The GF Score of 73 indicates the company is likely to have average performance going forward. It received high ranks for momentum and value, middling marks for profitability and financial strength and a low growth rating.
Fisher is the company’s largest guru shareholder with a 0.83% stake. Expedia is also being held by Cohen, Larry Robbins (Trades, Portfolio), Ray Dalio (Trades, Portfolio)’s Bridgewater Associates, Jeremy Grantham (Trades, Portfolio) and many others.
Charter Communications
After selling out at the end of 2022, Burry invested in 25,000 shares of Charter Communications (CHTR, Financial), allocating 0.53% of the equity portfolio to the holding. The stock traded for an average price of $341.49 per share during the quarter.
It is now the guru’s second-largest position.
The Stanford, Connecticut-based telecommunications and mass media company has a market cap of $63.86 billion; its shares were trading around $426.66 on Monday with a price-earnings ratio of 14.33, a price-book ratio of 6.10 and a price-sales ratio of 1.22.
The GF Value Line suggests the stock, though undervalued, is a possible value trap.
At 91, the GF Score implies the company has high outperformance potential. While it received high ratings for four of the criteria, the financial strength rank is low.
Holding a 5.72% stake, Dodge & Cox is the company’s largest guru shareholder. Warren Buffett (Trades, Portfolio) and Richard Pzena (Trades, Portfolio) also have large positions.
Additional trades and portfolio composition
During the quarter, Burry also established positions in Generac Holdings Inc. (GNRC, Financial), CVS Health Corp. (CVS, Financial) and MGM Resorts International (MGM, Financial) and sold out of Zoom Video Communications Inc. (ZM, Financial), Capital One Financial Corp. (COF, Financial) and Sibanye Stillwater Ltd. (SBSW, Financial)
The guru’s $1.74 billion equity portfolio, which is composed of 33 stocks, is most heavily invested in the consumer cyclical sector, followed closely by the communication services and industrials spaces.
