Big Short’s Michael Burry Is Betting On These 5 Stocks

4. Lumen Technologies, Inc. (NYSE: LUMN)

Big Short’s Michael Burry is bullish on the fundamentals of Lumen Technologies, Inc. (NYSE: LUMN). He has increased his stake in Lumen by 43% in the fourth quarter, making it the fourth-largest stock holding of the 13F portfolio. Burry’s stock-picking strategy also worked in the case of Lumen Technologies as shares of the facilities-based communications company grew 24% since the beginning of this year. Moreover, the company offers more than an 8% dividend yield to shareholders. Here is what Longleaf Partners said about Lumen in its 2020 Q4 investor letter:

“Lumen (-19%, -2.71%; -1%, -0.12%), the fiber telecom company formerly named CenturyLink, was a top detractor for the year and the only (slight) detractor in the fourth quarter. During the last quarter, Enterprise fiber revenues grew 0.8% year-overyear, International and Global declined 2.6% and Small and Medium Business (SMB) shrunk 5.8% due to COVID repercussions. Yet margins slightly increased due to the strong cost controls of CEO Jeff Storey and CFO Neel Dev. Despite significant deleveraging over the last two years and multiple debt issuances this year at low to mid-single digit interest rates, the stock trades at an incredibly low multiple of <5x FCF. We believe Lumen can grow by continuing to invest into fiber, which should outweigh its declining legacy copper landline business. Numerous recent large transactions for fiber peers at double-digit EBITDA multiples and landline peers at mid-single digit EBITDA multiples also suggest that Lumen could monetize several of its segments at good prices well beyond its total market capitalization today. We have stepped up our engagement with the company and signed a non-disclosure agreement (NDA) last month, so unfortunately we cannot say more other than “stay tuned.”