5 Stocks To Buy According to Michael Burry

In this article, we discuss the top 5 stock picks of Michael Burry’s Scion Asset Management as of Q2 2023. To read the investment philosophy and details of Michael Burry’s Q2 bets, go directly to Michael Burry Stock Portfolio: 10 Stocks To Buy Now.

5. CVS Health Corporation (NYSE:CVS)

Percentage of Scion Asset Management’s portfolio as of Q2 2023: 0.39%

 In Q2, 2023, Scion Asset Management owned 100,000 shares of CVS Health Corporation (NYSE:CVS), valued at $6.913 million, covering 0.39% of the fund’s portfolio.

ClearBridge Investments made the following comment about CVS Health Corporation (NYSE:CVS) in its first quarter 2023 investor letter:

“At the same time, we exited health insurance company Cigna, whose strong outperformance over the last year has resulted in shares trading at a significant premium relative to competitor CVS Health Corporation (NYSE:CVS). Additionally, we view CVS Health’s underperformance as driven by temporary issues and believe it has a good likelihood of succeeding in its improvement initiatives following upgrades to the management team and its acquisition of Oak Street Health. As a result, we elected to swap our position in Cigna into CVS Health to capitalize on the valuation gap while maintaining similar exposure within the sector.”

4. The Cigna Group (NYSE:CI)

Percentage of Scion Asset Management’s portfolio as of Q2 2023: 0.44%

In Q2, 2023, 74 hedge funds had a stake worth $4.065 billion in The Cigna Group (NYSE:CI), compared to 79 hedge funds in Q1. In the second quarter, Scion Asset Management increased its stake in the company by 10% to 27,500 shares worth over $7.7 million.

On August 4, BofA analyst Kevin Fischbeck reaffirmed a Buy rating on The Cigna Group (NYSE:CI)’s shares and raised the company’s price target to $350 from $320.

ClearBridge Investments mentioned The Cigna Group (NYSE:CI) in its investor letter for the first quarter of 2023. Here is what the firm said:

“At the same time, we exited health insurance company The Cigna Group (NYSE:CI), whose strong outperformance over the last year has resulted in shares trading at a significant premium relative to competitor CVS Health. Additionally, we view CVS Health’s underperformance as driven by temporary issues and believe it has a good likelihood of succeeding in its improvement initiatives following upgrades to the management team and its acquisition of Oak Street Health. As a result, we elected to swap our position in Cigna into CVS Health to capitalize on the valuation gap while maintaining similar exposure within the sector.”

3. Generac Holdings Inc. (NYSE:GNRC)

Percentage of Scion Asset Management’s portfolio as of Q2 2023: 0.47%

Generac Holdings Inc. (NYSE:GNRC) is a Wisconsin-based company that manufactures backup power generation products and other related items for residential, commercial, and industrial markets.

Michael Burry’s firm owned 55,000 shares of Generac Holdings Inc. (NYSE:GNRC), valued at $8.2 million.

In Q2, Generac Holdings Inc. (NYSE:GNRC) missed its EPS estimates by $0.08 after reporting a non-GAAP EPS of $1.08. The company’s revenue outperformed the analyst estimates but declined by 22.5% year-over-year to $1 billion.

Meridian Funds made the following comment about Generac Holdings Inc. (NYSE:GNRC) in its Q4 2022 investor letter:

“Generac Holdings Inc. (NYSE:GNRC), is a manufacturer of power generation equipment with a leading position in home standby generators. Generac also offers consumers a home energy management system that harnesses and stores power from the sun to be used for backup during utility power outages. Severe weather events that strained already-overburdened power grids in California, Texas, and other key markets have created a significant opportunity for home power generation equipment manufacturers. Moreover, with the future potential to aggregate these distributed energy resources through the company’s grid services business, homeowners have the potential to monetize these assets. The stock declined during the quarter as the company reduced its full-year revenue guidance due largely to labor shortages in Generac’s dealer network which resulted in a slowdown in installations and implementations. As a consequence, dealers have reduced their on-site inventory. During the period, we exited our position in the company.”

2. Charter Communications, Inc. (NASDAQ:CHTR)

Percentage of Scion Asset Management’s portfolio as of Q2 2023: 0.52%

Charter Communications, Inc. (NASDAQ:CHTR) was owned by 67 hedge funds in Q2, compared to 80 in Q1. Scion Asset Management held  25,000 shares of the company worth $9.184 million.

Weitz Investment Management made the following comment about Charter Communications, Inc. (NASDAQ:CHTR) in its second quarter 2023 investor letter:

“We added a new, direct position in Charter Communications, Inc. (NASDAQ:CHTR) at an average price in the low $330s per share during the quarter. At that price level, we found the absolute and relative valuation for the broadband company too compelling to ignore. Our combined Charter exposure is 5.3% via holdings of both Liberty Broadband and Charter.”

1. Expedia Group, Inc. (NASDAQ:EXPE)

Percentage of Scion Asset Management’s portfolio as of Q2 2023: 0.62%

Expedia Group, Inc. (NASDAQ:EXPE) held the most weightage among stocks in Michael Burry’s Q2 portfolio. Burry’s firm owned 100,000 of the company shares worth $10.1 million, representing 0.62% of Scion’s portfolio. Expedia Group, Inc. (NASDAQ:EXPE) was a new addition to the firm’s portfolio in Q2 2023.

On August 7, Citigroup raised the price target on Expedia Group, Inc. (NASDAQ:EXPE) to $115 from $105. The firm maintained a Neutral rating on the stock.

Aristotle Atlantic Partners, LLC made the following comment about Expedia Group, Inc. (NASDAQ:EXPE) in its first quarter 2023 investor letter:

“Expedia Group, Inc. (NASDAQ:EXPE) provides online travel services for leisure and small business travelers. The company offers a wide range of travel shopping and reservation services, as well as provides real-time access to schedule, pricing and availability information for airlines, hotels and car rental companies. Expedia serves customers worldwide.

We see Expedia benefiting from the growth of booking travel online, both for leisure and in corporate travel. The company also benefits from rapid growth in alternative accommodations, vacation home rental, through VRBO. The main sources of revenue and profitability are from hotel and vacation home rental. Additionally Expedia has exposure to airline ticket sales and automobile rentals. Post the COVID-19 pandemic, Expedia’s debt has been reduced and share repurchase has resumed and we would expect a dividend to be reinstated.”

You can also look at the 20 Most Influential Economists in the World and the Bill Gates Stock Portfolio: August 2023 Update.

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