Michael Burry’s 2024 Portfolio: 5 New Stock Picks

4. CVS Health Corp (NYSE:CVS)

Michael Burry’s Stake: $5,132,400

CVS Health Corp (NYSE:CVS) ranks fourth in our list of the top stocks in Michael Burry’s 2024 portfolio. Scion Asset Management acquired a $5.1 million stake in CVS Health Corp (NYSE:CVS) during the fourth quarter of 2023.

CVS Health Corp (NYSE:CVS) recently posted strong Q4 results but slashed its 2024 outlook, citing medical costs.

In its fourth quarter 2023 investor letter, Vltava Fund stated the following regarding CVS Health Corporation (NYSE:CVS):

“Not every transaction creates value. Some transactions destroy company value. An example of such transaction is CVS Health Corporation (NYSE:CVS)’s acquisition of Oak Street Health in early 2023. This acquisition cost CVS $10.6 billion, and, based on metrics cited by the company itself, it seems to us that it was a waste of money for the most part. Unfortunately, CVS has its own history of overpriced acquisitions. The last one prior to that was in 2018, when CVS bought health insurer Aetna for $69 billion. We had assumed that CVS management, which has since changed, would recognise that mistake and learn from it. We were wrong. The acquisition of Oak Street Health is both disappointing and a warning to us. We now have a company in our portfolio whose capital allocation we consider to be poor and that should not be there. Unfortunately, the situation is complicated by the fact that the CVS stock is now very cheap and therefore we are reluctant to dispose of it just yet. We probably will do so, however, when the opportunity arises.”