Michael Burry, the famed investor who predicted the 2008 financial crisis and inspired the film “The Big Short,” is known for his bold and often contrarian market moves. Recently, Burry made headlines again — but this time, it’s not for betting against the market. Instead, he’s put half of his portfolio into just three stocks, signaling strong conviction in their future potential. For investors looking to follow in the footsteps of one of Wall Street’s most scrutinized minds, these picks provide insight into where Burry sees value in today’s uncertain market landscape. Let’s take a closer look at these three companies capturing Burry’s attention — and his capital.
1. Alibaba (BABA): A Contrarian Bet on Chinese E-Commerce
Alibaba, the Chinese e-commerce giant, represents the largest position in Burry’s portfolio, with 155,000 shares valued at $11.2 million, making up 21% of Scion’s total assets. Burry began building his stake late last year and has continued accumulating shares, with an average buy-in price around $79. With a modest 7% gain so far, Burry appears to be playing the long game, betting on a recovery in Alibaba’s fundamentals.
Despite Alibaba’s 10% rise year-to-date, the stock remains 2.5% lower over the past 12 months. After years of regulatory headwinds—including a $2.1 billion fine for monopolistic practices and a lengthy recertification process—the company has finally returned to regulatory compliance. However, intense competition from rivals like JD.com (NASDAQ: JD) and newer entrants such as Shein and PDD Holdings’ Temu (NASDAQ: PDD) continues to pressure its growth.
For investors, Burry’s significant position in Alibaba suggests a belief that the market is underestimating the long-term growth potential of the company, even as it navigates a challenging competitive and regulatory landscape.
2. Shift4 Payments (FOUR): Capitalizing on the Fintech Boom
Shift4 Payments, a recent addition to Burry’s portfolio, has quickly become the second-largest holding, accounting for 14% of Scion’s assets. Burry acquired 100,000 shares at an average price below $70, translating to a $7.3 million investment that has already appreciated by 19%.
Shift4 specializes in payment processing, initially targeting the restaurant industry but now diversified across hospitality, leisure, and retail sectors. The stock is up 55% over the past year, driven by a 50% increase in transaction volume to $40.1 billion in the second quarter, leading to a 30% jump in revenue to $827 million and a 48% rise in profits to $54 million.
Despite the significant rally, Burry sees further upside. The stock trades at just 17 times forward earnings, less than twice its sales, and 19 times its free cash flow, metrics that suggest it is still undervalued relative to its growth potential. With Wall Street forecasting long-term earnings growth of 49% annually, Burry’s bet on Shift4 appears aligned with a broader trend of fintech growth and digital payments adoption.
3. Molina Healthcare (MOH): A Defensive Play in a Volatile Market
Molina Healthcare rounds out Burry’s top three holdings, comprising nearly 14% of his portfolio with 24,500 shares valued at $7.3 million. With an average entry price of $354 per share, the stock has remained relatively flat in 2024 but has rebounded 26% from its July lows.
Molina’s recent earnings report revealed strong revenue growth, driven by increased premiums and a broader membership base across its business lines. However, concerns linger over declining Medicaid enrollment, a trend that has pressured many healthcare stocks. Competitor Centene (NYSE: CNC) recently highlighted this issue, noting that some 20 million people have been disenrolled from Medicaid over the past year, leaving insurers to deal with higher-cost members.
While Molina reported higher Medicaid costs in the second quarter, it expects these will be offset in the latter half of the year. Trading at just 13 times forward earnings and a fraction of its sales, the stock appears to offer significant upside, particularly if enrollment trends stabilize or improve.
Key Takeaways for Traders and Investors
Michael Burry’s current portfolio positions reveal a strategic blend of contrarian plays and growth bets, reflecting both his willingness to lean into market pessimism and his belief in long-term secular trends. His largest holding, Alibaba, highlights a contrarian bet on Chinese e-commerce amidst a challenging landscape. Meanwhile, his positions in Shift4 Payments and Molina Healthcare point to opportunities in the fintech and defensive healthcare sectors, respectively.
For traders, Burry’s portfolio suggests opportunities for both value and growth plays in sectors facing unique headwinds and potential catalysts. His track record as a shrewd investor, willing to go against the grain, makes these holdings worth watching closely in the months ahead.