10 Michael Burry Stocks with Huge Upside Potential

2. V.F. Corporation (NYSE:VFC)

Scion Asset Management’s Q4 Stake: $4.29 million

Analyst Upside as of May 9: 47.93%

Number of Hedge Fund Holders: 36

V.F. Corporation (NYSE:VFC), formerly known as Vanity Fair, designs, distributes, and markets branded lifestyle footwear, accessories, and clothing. The company operates in three segments: Active, Outdoor, and Work, with brands including Vans, The North Face, and Timberland. It sells primarily to mass merchants, department stores, independently operated partnership stores, national chains, specialized stores, and direct-to-consumer platforms.

On April 30, Wells Fargo analyst Ike Boruchow raised V.F. Corporation (NYSE:VFC)’s shares from Underweight to Equal Weight while lowering the price target to $12 from $18. Boruchow remarked that the bear case for V.F. Corporation seemed to have fully developed. He acknowledged that VF Corp has been one of the worst performers in its industry, but feels that the market has now fully accounted for the delayed recovery of its Vans brand. The analyst mentioned that while there are still worries regarding V.F. Corporation’s balance sheet and free cash flow, the risk/reward profile has become more balanced, leading to a shift to a neutral stance.

Madison Small Cap Fund stated the following regarding V.F. Corporation (NYSE:VFC) in its Q4 2024 investor letter:

“We initiated a new investment position in V.F. Corporation (NYSE:VFC) (~8$b market cap). Formerly known as Vanity Fair, VF is the owner of a portfolio of apparel and footwear brands, namely Vans, The North Face, and Timberlands, which make up the lion’s share of the revenues. VFC is in a special situation with relatively new management, executing a turnaround strategy that we believe is value-maximizing and very shareholder-friendly. The company recently sold one of its portfolio brands, Supreme, for $1.5b and used the proceeds to pay down debt. They’ve reduced costs across the portfolio, including shrinking the Van’s retail business.

Although margins have improved from the recent trough as a result of these actions, there is ample room for expansion, and we believe the portfolio can be further rationalized. We would not be surprised if Timberland gets sold to further de-lever the balance sheet, leaving the company focused on two strong brands that have, we believe, room to grow mostly in international markets but also domestically. We further believe a fully rationalized portfolio with a cleaner balance sheet alongside a recovery in the Vans business could improve the intrinsic value, which we currently estimate to be $28 per share.”