What Stocks Does Michael Burry Own?

What Stocks Does Michael Burry Own? Famous for shorting the US housing market prior to the 2008 financial crisis, Michael Burry has re-emerged in 2022 as an outspoken market bear.

 

Earlier this year, Burry even went so far as to sell off all but one of the stocks held by his Scion Asset Management fund.

 

In the most recent quarter, though, the famed investor expanded Scion’s holding to a total of six stocks. Here are the stocks Burry has bought, even as he predicts a continued slide for the American stock market.

 

The only stock Michael Burry chose to hold after his early 2022 selloff, GEO Group (NYSE:GEO) still accounts for over 38 percent of his portfolio.

 

GEO is primarily involved in private prisons and mental healthcare facilities.

 

This company has struggled in the past few years, causing its shares to lose much of their value and forcing GEO to liquidate facilities to pay off debt.

GEO Group is something of a natural fit for Burry as a potentially undervalued company that is entrenched in the government-funded criminal justice system.

 

With its already large footprint in the private prison industry, GEO is unlikely to suffer further substantial revenue losses, even in the event of a recession.

 

The company has also diversified outside of the legacy prison system, offering rehabilitation-based programs that mesh well with an evolving approach to criminal justice in America. As such, GEO has both an economic moat and a dependable, recession-resistant business model.

 

The second-largest Burry holding at the moment is online shopping platform Qurate Retail (NASDAQ:QRTEA).

 

This low-priced stock makes up 20.5 percent of Burry’s portfolio, suggesting that the noted investor believes it to be significantly undervalued.

 

Qurate operates several different retail businesses but is most notable as the parent company of Zulily and television shopping channel HSN.

 

In large part, Burry’s bet on Qurate may be based on the company’s short-term growth strategy. With an increasing focus on eCommerce, Qurate hopes to substantially raise its earnings.

 

This stock could be quite risky. With a debt-to-equity ratio of over 15, Qurate is far from a conservative investment. The stock, however, only trades at 6 times forward earnings, making it a potential value pick on Burry’s part.

 

At about 17 percent, private prison operator CoreCivic rounds out Michael Burry’s top three holdings.

 

Interestingly, this investment puts more than 50 percent of Scion’s capital into the private prison industry. This has led to some speculation that Burry was banking on the so-called “red wave” that failed to materialize during this month’s midterm elections, leading to stricter law enforcement and increased demand for prison space.

 

Like GEO, CoreCivic has lost a considerable amount of its value in recent years. The stock currently trades at just 9.4 times forward earnings, making it a potentially attractive value investment.

 

Analysts also expect earnings to grow by nearly 30 percent in the coming year, a development that would almost certainly support higher share prices.

 

Moving beyond prison holdings, Burry took another position focused on government spending by buying aerospace defense manufacturer Aerojet Rocketdyne (NYSE:AJRD).

 

This company has recently played an important role in the Artemis rocket program, potentially setting it up for a bright future as NASA pursues more active space exploration. Aerojet makes up 13.4 percent of the Scion portfolio, making it the smallest double-digit holding.

 

Burry’s rationale on Aerojet may be a fairly straightforward arbitrage play. In February, regulators blocked a proposed acquisition` of the company by Lockheed Martin. Aerojet has since gone looking for a new acquisition agreement.

 

If a buyer is found, current shareholders could realize a modest premium on their shares. If not, the company’s continued work for the US government should keep it from teetering during the economic downturn Burry believes will occur in the near future.

 

7.6 percent of Burry’s new portfolio is dedicated to class A shares of Charter Communications (NASDAQ:CHTR).

 

This telecommunications company offers internet, 5G networking, cable television and other consumer communications services. This stock has fallen by about 44 percent in the past year, despite a 4.8 percent increase in revenues.

 

Like Qurate, Charter Communications seems to be a value play for Burry. The stock trades at about 12 times its expected earnings and produces an exceptional $81.04 in cash flow per share. Earnings are also expected to grow nearly 9 percent over the next year.

 

Although Michael Burry is a noted contrarian of mainstream Wall Street analysts, his position on Charter Communications is an exception to this rule.

 

Charter maintains a consensus buy rating from 30 polled analysts. The median target price for the stock is also about 24 percent above its current price, suggesting that Wall Street sees considerable upside over the coming 12 months.

 

At just 2.5 percent, Liberty Latin America (NASDAQ:LILA) is the smallest holding in Burry’s new portfolio. The company provides telecommunications services in Latin America and the Caribbean. It also maintains underwater fiber optic infrastructure in these markets.

 

Liberty Latin America may be a good growth play on the emerging Latin American region. As more of Latin America’s consumers seek telecommunications services, the company could see substantial growth.

 

The stock, however, has been punished this year and may see further institutional selloff in the coming months. This possibility could account for it making up Burry’s smallest position, as losses from other institutional investors selling their stakes would be contained.

 

While Burry’s re-entry into the stock market may indicate that he is less bearish than earlier this year, the eccentric investor’s choices still seem to anticipate economic turmoil ahead.

 

Well over half of his portfolio is invested in government-dependent businesses that would most likely continue to generate revenue from existing contracts in the event of a recession.

 

The rest seem to be deep value positions that could benefit Scion when a new bull market begins. As such, it seems likely that Burry still believes the broader market has more room to fall before a recovery.

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