A deep dive into Michael Burry's Q3, 2023 portfolio

Michael Burry Portfolio Distribution

Michael Burry is a highly successful American investor and hedge fund manager known for his unconventional investment strategies. He gained widespread recognition after predicting the collapse of the US housing market in 2008 and profiting from it through credit default swaps.

In this deep dive, we will be taking a closer look at Burry's Q3, 2023 portfolio and the rationale behind his investment decisions. This will provide valuable insights into not only Burry's approach to investing but also potential opportunities for investors.

Background Information

Before delving into Burry's portfolio, it is important to understand his investment philosophy. Burry is known for his value investing style, which involves buying undervalued stocks and holding them for the long term. He also pays close attention to macroeconomic trends and is not afraid to take contrarian positions.

In recent years, Burry has been vocal about his concerns regarding the current state of the stock market, stating that it has become overvalued due to easy monetary policies and speculation. As a result, he has been shifting his portfolio towards more defensive positions, preparing for a potential market correction.

Q3, 2023 Portfolio Analysis

The Foundation of Burry's portfolio in Q3, 2023, is Ishares Tr, making up a hefty 47.86% of his holdings. His other significant positions include Booking Holdings Inc (BKNG), accounting for 7.79% of the portfolio, closely followed by Stellantis N V (STLA) at 7.73%. Nexstar Media Group Inc (NXST) and Star Bulk Carriers Corp (SBLK) also hold considerable weight, comprising 7.05% and 4.87% of the portfolio, respectively. These investments suggest Burry's strategic shift towards companies that are likely to demonstrate resilience in the face of market volatility. Here is a compilation of the most significant changes in Michael Burry's portfolio.

iShares TR [New]

globally iShares TR, a component of Michael Burry's portfolio, comprises a collection of exchange-traded funds (ETFs) managed by BlackRock. Acquired from Barclays in 2009, iShares offers a diverse selection of ETFs that mirror bond or stock market indices, some of which are actively managed. These funds are listed on major global stock exchanges, including the London Stock Exchange, American Stock Exchange, New York Stock Exchange, and more. As the leading global issuer of ETFs, iShares presents investors with an opportunity to gain exposure to various sectors while mitigating risks associated with investing in individual stocks.

Booking Holdings INC (BKNG) [New]

Booking Holdings Inc., representing 7.79% of the portfolio, is a leading provider of online travel and related services. Despite the volatility in the travel industry, especially amidst the recent pandemic, Burry's investment suggests a long-term positive outlook on the sector, aligning with his value investing approach.

In the last decade, Booking Holdings Inc. has demonstrated solid financial growth, with a substantial increase in revenue. From $6.79B in revenue at the decade's commencement, the company has surged by 151.57% to an impressive $17.09B. This growth trajectory indicates the firm's ability to effectively scale and capitalize on market opportunities.

The recent pandemic conditions have certainly posed challenges to the travel and booking industry, but as for BKNG, their revenue has shown signs of recovery, demonstrating their resilience and adaptability during unprecedented times. Their robust business model and strong market position have allowed them to weather the storm with promising signs of recovery on the horizon. Furthermore, with a commanding 51% market share in the booking industry, BKNG holds a dominant position. This majority stake underscores their influence within the sector and is a testament to their competitive edge in the market.

The investment by Burry into BKNG is a reflection of his confidence in their sustained profitability and future potential growth.

Stellantis N V (STLA) [Added 23.08%]

Stellantis N.V., accounting for 7.73% of Burry's investments, is a multinational automobile manufacturer. This investment could be an indication of Burry's belief in the resilience of the automotive industry or a potential undervaluation in the company's shares.

In terms of financials, STLA's profit margin has experienced a remarkable increase of 1.48K% over the last 8 years, surging from a modest 0.59% to an impressive 9.35%. This substantial growth reflects the company's ability to optimize profitability and generate higher returns for its stakeholders.

Moreover, STLA's revenue has witnessed a significant upward trajectory during the same period, exhibiting an impressive growth rate of 64.79%. Starting from a revenue figure of $116.9B, the company's top line has surged to an impressive $192.64B. This remarkable growth underscores STLA's ability to effectively capitalize on market opportunities and drive sustained financial success.

Furthermore, STLA's debt-to-equity ratio has experienced a considerable decline from 3.28 to 0.93 over the past 8 years, indicating a substantial reduction in debt levels. This improvement in the company's financial leverage demonstrates its commitment to strengthening its balance sheet and enhancing its long-term financial stability.

Overall, these financial metrics highlight STLA's impressive performance and ability to deliver robust financial results, positioning the company for continued success in the future.

Nexstar Media Group Inc (NXST) [Added 224.34%]

Making up 7.05% of Burry's portfolio, Nexstar Media Group is a leading diversified media company that leverages localism to bring new services and value to consumers and advertisers. The sizable investment in this media giant underscores Burry's confidence in the enduring power of local content.

Nexstar Media Group's revenue has experienced an astounding growth of 937.37% over the past decade, catapulting from $502.33M to a whopping $5.21B. This exponential increase is a testament to NXST's robust business model and its ability to effectively monetize its diversified media offerings. In addition, NXST's equity has seen a remarkable increase, with a growth rate of 20.82K%, underscoring the company's consistent value creation for its shareholders.

However, a note of caution is warranted when considering NXST's interest coverage ratio; standing at 4.74, it indicates a potential risk in covering interest payments on its debt. While the company's financial performance remains compelling overall, this particular ratio suggests a need for careful management of its financial obligations moving forward.

Star Bulk Carriers Corp (SBLK) [Added 35.33%]

Star Bulk Carriers Corp, comprising 4.87% of the portfolio, is a global shipping company providing worldwide seaborne transportation solutions in the dry bulk sector. This holding suggests Burry's optimism about the shipping industry's prospects and its ability to weather economic downturns.

Delving deeper into the financials of Star Bulk Carriers Corp reveals an encouraging story of growth and profitability. Over the last decade, SBLK's profit margin has catapulted by a staggering 1.39K%, moving from a modest 2.65% to an impressive 39.38%. This dramatic surge in profit margin reflects the company's efficient operations and strong pricing power.

On the revenue front, SBLK has seen a substantial hike of 1.96K%, moving from $69.89M a decade ago to a robust $1.44B in recent times. This exponential revenue growth underlines the company's ability to tap into new markets and effectively meet demand in the competitive shipping sector.

As for SBLK's ability to manage its debt, the company's interest coverage ratio is a healthy 10.97. This figure indicates SBLK's solid financial health, as the company can comfortably cover its interest payments on debt from operating income. However, it is worth noting that SBLK's debt-to-equity ratio has seen a slight uptick over the last decade, moving from 0.11 to 0.14. While this still falls within acceptable limits, it signifies an increase in borrowing and points to the need for prudent debt management going forward.

Alibaba Group Holding Ltd (BABA) [New]

Michael Burry has made a new addition to his Q3, 2023 portfolio with a substantial investment in Alibaba Group Holding Ltd (BABA), purchasing $4.34M worth of BABA stock. This decision comes at a time when the stock has been on a downturn, largely attributed to the ongoing conflicts between the US and China.

Despite the geopolitical pressures, a closer look at the financials reveals a mixed picture. Over the last decade, BABA's profit margin has seen a significant contraction of -81.01%, from a healthy 43.95% to a more modest 8.35%. This dip may be attributed to increased competition and the effects of the US-China conflict.

However, on the brighter side, BABA's revenue has witnessed an impressive surge of 1.38K% in the same period, moving from $8.53B to a staggering $126.61B. This robust increase underlines the company's strong market presence and its ability to weather tough economic conditions.

Furthermore, BABA's equity growth rate stands at an exceptional 2.16K%. Despite the recent downturn, the stock appears to be highly undervalued, presenting potential opportunities for value investors. The current scenario underscores the importance of due diligence and risk assessment in investment decisions.


JD.COM INC [New]

Continuing with his focus on Chinese stocks, Michael Burry has also included JD.COM INC in his portfolio for Q3, 2023, with an investment of $3.64M. This choice, like Alibaba, seems motivated by the ongoing tensions between the US and China, which have put downward pressure on the stock's valuation.

A glance at JD's financials uncovers some interesting details. Over the last 8 years, JD's profit margin has experienced a boost of 108.81%, recovering from a negative -11.26% to a positive 0.99%. This indicates a marked improvement in the company's profitability.

As for the company's top line, JD's revenue has climbed by a substantial 710.23% during the same timeframe, rising from $18.72B to a whopping $ 151.67 B. This signifies a strong demand for its offerings despite the macroeconomic headwinds.

The stock currently trades at a P/E Ratio of 11.52x, a level generally considered cheap, suggesting that the shares might be undervalued. However, a crucial point of concern is JD's 4.85% ROE (Return On Equity), which appears to be rather low. This could potentially affect the company's ability to generate profits for shareholders. As always, these figures underscore the need for thorough research and risk evaluation before investing.


Stocks Sold by Michael Burry in Q3, 2023

In addition to the new additions to his portfolio, Michael Burry made some significant exits in the third quarter of 2023. Here is a list of some of the stocks he completely sold:

These sell-offs reveal a strategic shift in Burry's investment approach, highlighting his preference for other opportunities in the dynamic and complex financial markets. As always, acute observation and comprehensive analysis are needed for a deeper understanding of these investment decisions.

View Michael Burry's Portfolio