10 Michael Burry Stocks with Huge Upside Potential

4. Magnera Corporation (NYSE:MAGN)

Scion Asset Management’s Q4 Stake: $3.63 million

Analyst Upside as of May 9: 47.25%

Number of Hedge Fund Holders: 47

Magnera Corporation (NYSE:MAGN), formed through the merger of Glatfelter and Berry’s HH&S divisions, manufactures fiber-based engineered products. The company offers lightweight papers and composite fibers for a wide range of applications, including food and beverage, wall covering, technical specialties, composite laminates, and metallized products.

Magnera Corporation (NYSE:MAGN) reported second-quarter earnings and revenue on May 7 that fell short of analyst expectations, while also lowering its full-year guidance. The company cited ongoing global economic uncertainty impacting results. According to CEO Curt Begle Magnera is “prepared to take the appropriate operational and cost measures that align with short-term market realities” in the face of tariff-driven demand concerns. Looking forward, Magnera Corporation (NYSE:MAGN) reduced the range of its full-year comparable adjusted EBITDA guidance from $360 to $380 million. The company reiterated its post-merger adjusted free cash flow projection for fiscal 2025, standing at $75–$95 million.

Kingdom Capital Advisors stated the following regarding Magnera Corporation (NYSE:MAGN) in its Q4 2024 investor letter:

“Our most significant addition in Q4 was Magnera Corporation (NYSE:MAGN). The product of a merger between Glatfelter and Berry’s HH&S businesses, Magnera began trading independently in November. The combined entity should file their 10-K shortly and report their Q1 in February, after which we expect the improvement in volumes for their non-wovens will become apparent. This is not an exciting business, producing products like wipes, diapers, etc. Magnera was spun with a significant amount of debt, but we interpret their upsized $800m notes offering as a sign that the business is turning. The debt is cheap, termed out, and backed by significant assets. We expect Management to focus on deleveraging quickly. As a bonus, some of their business lines were impacted by cheap imports in recent years, and I expect Magnera could be a beneficiary of a tougher tariff regime. At a high level, here is our investment framework: • Magenra should have about $1.8B of net debt after the spin, and 36m outstanding shares, with about $400m of EBITDA. Shares currently trade at $18. • I think Magnera can generate >$100m of annual FCF for the next three years, while growing EBITDA to $475-500m via synergies and volume recovery. These businesses have averaged over $500m of annual EBITDA in the past decade, suggesting this normalization is not overly aggressive. • At their current 6x EBITDA multiple, that would imply the business trades for $40/share within three years (~120% upside/30% IRR).”