Below are the top 5 stocks Big Short’s Michael Burry is betting on to beat the volatile market trends. For a comprehensive list please Big Short’s Michael Burry Is Betting On These 11 Stocks.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best hydrogen fuel cell stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind let’s take a look at the Michael Burry’s top 5 stock picks:
5. NOW Inc. (NYSE: DNOW)
Big Short’s Michael Burry is betting big on energy stocks in 2021. He initiated a position in downstream energy product provider NOW Inc. (NYSE: DNOW) during the fourth quarter by purchasing shares worth more than $10.77 million. It is the fifth-largest stock holding of Scion Asset Management, representing 4.79% of the overall portfolio. Shares of NOW soared close to 50% since the beginning of this year, thanks to improving commodity prices.
Palm Valley Capital, an investment firm, highlighted a few stocks including NOW Inc in a Q3 investors letter. Here is what Palm Valley Capital stated:
“NOW is a 2014 spinoff from National Oilwell Varco and has a 150-year legacy as a distributor to the oil and gas and industrial markets. Through a vast network of 245 locations, NOW’s 300,000 SKU product offering addresses all segments of the energy value chain, from upstream E&Ps to midstream infrastructure to downstream refining, in addition to industrial end markets including chemicals, mining, utilities, and manufacturing. When energy companies reduce activity, NOW suffers. However, it has streamlined its business since the last oil and gas downturn and expects reduced operating losses this round. As of June 30th, NOW had $269 million of cash and no debt ($497 million market cap), although if demand recovers as we expect, some cash will be reinvested in working capital. The stock is currently selling for 66% of tangible book value.”