In this article, we will take a look at the top 10 holdings of Michael Burry. You can skip our comprehensive analysis of Michael Burry's history, investment philosophy, and hedge fund performance, and go directly to Michael Burry is Shorting Tesla and Buying These 5 Stocks Instead.
Michael Burry, the investor who rose to fame after exploiting the 2008 financial crisis to his benefit by betting against mortgage securities — a feat that later inspired a blockbuster Hollywood film named The Big Short — has recently turned his attention towards Tesla, Inc. (NASDAQ: TSLA), the California-based electric vehicle maker owned by eccentric billionaire Elon Musk. Burry, through his hedge fund, Scion Asset Management, now owns a $534 million short position in Tesla, Inc. (NASDAQ: TSLA), based on the 13F data filed by Scion for the first quarter of 2021.
The stock of the EV maker has been one of the most volatile on the market in recent months, closing at over $883 in late January, an all-time high, but tanking close to a quarter in value within two months. It is now down close to 35% from the peak four months ago. The rally that took Tesla, Inc. (NASDAQ: TSLA) to the peak was a record one, as share price jumped close to 700% over the course of twelve months. It was only broken by the lows of the pandemic as EV demand drastically reduced due to travel restrictions put in place to contain the coronavirus.
Burry has an active presence on social media and regularly engages with his followers on social networking platform Twitter. Since his position on Tesla, Inc. (NASDAQ: TSLA) has been made public, the share price of the EV maker has fallen another 4%, bringing total losses close to 20% month-to-date. He gave an indication of his position towards Tesla in a tweet in late December — now deleted — in which he advised Musk to sell shares to raise capital for the EV maker. Amid pandemic-related worries, he also called the Tesla, Inc. (NASDAQ: TSLA) stock volatility ridiculous.
Tesla has navigated demand worries in China and auto chip supply concerns to post record delivery numbers for the first quarter of 2021. However, the firm has still not given an estimate for the expected deliveries for 2021. Research suggests that Tesla, Inc. (NASDAQ: TSLA) is one of the most shorted stocks on the market since at least 2010. However, some of these numbers do not bode well for those shorting Tesla. According to a report published in Quartz, between 2017 and 2021, investors shorting Tesla, Inc. (NASDAQ: TSLA) lost $52 billion. Going back to 2010, the number is closer to $57 billion.
Burry is thus not the first industry titan to short Tesla. Before him, many others have done the same. Most famously, legendary investor David Einhorn, the founder and president of Greenlight Capital, got into a public spat with Elon Musk in 2019 and shorted Tesla through 2020, which ended up hurting his company as Tesla, Inc. (NASDAQ: TSLA) went on the record rally through this position. Given the view Musk has taken on crypto in general in recent weeks, it is likely that crypto firms may also short Tesla in tandem with the bet made by Burry.
Only time will tell whether Burry is correct about Tesla, Inc. (NASDAQ: TSLA) . He has an excellent track record, unlike the broader hedge fund industry which is reeling from losses. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26th 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Michael Burry is Shorting Tesla and Buying These 10 Stocks Instead
Michael Burry of Scion Asset Management
With this context in mind, here is our list of the top 10 holdings of Michael Burry. We use Scion's Q1 holdings for this analysis.
SunCoke Energy, Inc. (NYSE: SXC) is an Illinois-based raw material processing and handling company founded in 160. It is placed tenth on our list of top 10 holdings of Michael Burry. Scion Asset Management, the private investment firm led by Burry, owns more than 1 million shares in SunCoke worth more than $7.7 million. The investment comprises 0.56% of the whole portfolio of Scion. SunCoke stock has returned more than 130% to investors over the course of the past twelve months.
On April 28, SunCoke Energy, Inc. (NYSE: SXC) posted quarterly results for the first three months of 2021, reporting a revenue of more than $359 million and earnings per share of $0.20. The revenue for the first quarter of 2021 beat market estimates by more than $51 million.
At the end of the fourth quarter of 2020, 19 hedge funds in the database of Insider Monkey held stakes worth $65 million in SunCoke Energy, Inc. (NYSE: SXC), the same as in the preceding quarter worth $61 million.
NOW Inc. (NYSE: DNOW) is a Texas-based industrial equipment firm that focuses on the distribution of oil drilling equipment across the world. It was founded in 2013 and is placed ninth on our list of top 10 holdings of Michael Burry. NOW stock has returned more than 52% to investors over the last year. Michael Burry, through his asset management firm, owns 700,000 shares in the company worth more than $7 million. The investment comprises 0.52% of the portfolio of the asset management firm.
NOW Inc. (NYSE: DNOW) reported quarterly earnings for the first three months of 2021 on May 5, posting a revenue of $361 million, down more than 40% compared to the revenue over the same period last year but beating market estimates by over $22 million.
Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm Renaissance Technologies is a leading shareholder in NOW Inc. (NYSE: DNOW) with 6.4 million shares worth more than $46 million.
The Kraft Heinz Company (NASDAQ: KHC) is an Illinois-based food and beverage company founded in 1969. It is placed 8th on our list of top 10 holdings of Michael Burry. More than 1.1 million Kraft Heinz shares worth over $46 million are owned by Burry’s Scion Asset Management, representing close to 3.5% of their investment portfolio. Kraft stock has returned more than 43% to inventors over the past year despite pandemic related setbacks which have hit the sales for the firm.
On April 23, The Kraft Heinz Company (NASDAQ: KHC) stock was downgraded to Neutral from Overweight by investment advisory Piper Sandler on the back of growing cost pressures for the food and beverage firm. Piper gave Kraft stock a $41 price target in the ratings update.
Out of the hedge funds being tracked by Insider Monkey, Nebraska-based investment firm Berkshire Hathaway is a leading shareholder in The Kraft Heinz Company (NASDAQ: KHC) with 325 million shares worth more than $11 billion.
In its Q4 2020 investor letter, Berkshire Hathaway , an asset management firm, highlighted a few stocks and The Kraft Heinz Company (NASDAQ: KHC) was one of them. Here is what the fund said:
“We exclude our Kraft Heinz holding — 325,442,152 shares — (In the list of 15 common stock investments that at yearend were our largest in market value) because Berkshire is part of a control group and therefore must account for that investment using the “equity” method. On its balance sheet, Berkshire carries the Kraft Heinz holding at a GAAP figure of $13.3 billion, an amount that represents Berkshire’s share of the audited net worth of Kraft Heinz on December 31, 2020.
Facebook, Inc. (NASDAQ: FB) is a California-based technology firm founded in 2004. It is ranked 7th on our list of top 10 holdings of Michael Burry. He has been bullish on Facebook, with Scion Asset Management, his investment firm, owning 550,000 shares in the social media giant worth more than $161 million, representing close to 12% of the investment portfolio of Burry. Facebook, Inc. (NASDAQ: FB) has also had a good year despite the pandemic, offering investors returns exceeding 33% despite losing ad sales that are now rebounding.
Facebook, Inc. (NASDAQ: FB) now has over 45 analysts covering its stock among investment advisories and has a consensus Buy rating with a high target price and low target price between $460 and $220.
At the end of the fourth quarter of 2020, 242 hedge funds in the database of Insider Monkey held stakes worth $38 billion in Facebook, Inc. (NASDAQ: FB), up from 230 in the preceding quarter worth $29 billion.
Distillate Capital, in its Q1 2021 investor letter, mentioned Facebook, Inc. (NASDAQ: FB). Here is what Distillate Capital has to say about Facebook, Inc. in its letter:
"Facebook, Inc. (NASDAQ: FB) has come in and out of the portfolio before and did so this quarter on the back of substantial improvement in projected free cash flows such that its valuation now meets the criteria for inclusion.”
Alphabet Inc. (NASDAQ: GOOG) is a California-based technology firm founded in 1998. It is placed 6th on our list of top 10 holdings of Michael Burry. Scion Asset Management, chaired by Burry, owns 80,000 shares of Alphabet worth over $165 million. This represents over 12% of the investment portfolio of the firm. Alphabet stock has returned more than 62% to investors over the course of the past twelve months. The tech giant is expecting record revenues this year as ad sales grow with the reopening of the economy after a torrid 2020.
Alphabet Inc. (NASDAQ: GOOG) stock was given a Neutral rating by investment advisory Citigroup on May 17 with a price target of $2,415. The company has seen stock soar in recent weeks as business resumes and companies invest in their digital presence.
Our calculations show that Alphabet Inc. (NASDAQ: GOOG) ranks 6th in our list of the 30 Most Popular Stocks Among Hedge Funds. Polen Global Growth Fund, in its Q1 2021 investor letter, mentioned Alphabet Inc. (NASDAQ: GOOG). Here is what Polen Global Growth Fund has to say about Alphabet Inc. in its letter:
"For our top contributors, each generated strong returns for different, but fundamentally based reasons, in our opinion. Alphabet saw renewed strength recently as advertisers generally resumed spending after a short pause during the pandemic.
