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

1. Citigroup Inc. (NYSE: C)

Big Short’s Michael Burry is also betting big on Citigroup Inc. (NYSE: C) in 2021. His firm has initiated a big call option position in the banking giant during the fourth quarter, accounting for 14.81% of the overall portfolio. Shares of Citigroup soared close to 9% since the beginning of this year, enlarging six months’ gains to 30%.

Oakmark Select Fund, an investment advisory firm, highlighted few stocks including Citigroup in the Q3 investor’s letter. Here is what Oakmark Select Fund stated:

“Citigroup was our largest detractor for the period due to Covid-19-related concerns that have hurt the entire financial sector, as well as a handful of Citigroup-specific headlines that amplified near-term uncertainty. We believe that investors’ short-term focus can cause them to miss the bigger picture. The company has remained profitable throughout the Covid-19 crisis to date. It continues to operate with significant excess capital relative to regulatory minimums, even as it has added more than $10.5B to credit reserves year to date. We believe the company is proving its resilience during a real-life stress test. Yet, despite this positive early evidence, Citigroup currently trades at only 60% of tangible book value and slightly over 5x 2019 earnings per share. Given that we think the company’s normalized earnings power is greater than what it achieved in 2019, we find these valuation metrics especially attractive. As we move beyond the pandemic, we think investors’ focus will shift to the underlying quality of the business and they will value the resilience Citigroup demonstrated during this crisis.”

Please also see 11 Best Lithium Stocks To Buy Now and Ray Dalio’s Top 10 Stock Picks for 2021.

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