Dr. Michael Burry, who placed a big bet against the housing market in the face of the Great Financial Crisis of 2008 (played by Christian Bale in the film The Big Short), is one of those investment legends you just need to follow. Undoubtedly, Mr. Burry may post on X (formerly Twitter), only to delete it shortly after. In any case, many ears are more than willing to listen when the man speaks, given his intense nose for value. If you are looking for a top investment, grab these Michael Burry stocks.
Undoubtedly, following big-name money managers may be nothing new. You’re bound to hear about the big names and what they’re up to on numerous popular television programs. Regardless, I do view Burry as one of the greats, with perhaps one of the best noses for value in most market environments. After his recent publicly disclosed stock purchases, here are three that I’d be willing to ride behind.
Top Michael Burry Stocks: Alphabet (GOOG, GOOGL)
Dr. Burry has been quite active of late, with a number of big buys and sells, even following some pretty bearish Tweets (or X posts) made in the year prior. Indeed, it seems like he may have been wrong to say sell. He said so himself, just last year.
Of the recent pickups, Alphabet (NASDAQ:GOOG, GOOGL), I believe, is the most remarkable. It’s a generative AI kingpin whose value may still be underestimated by many investors who are overweighting the firm’s less-than-ideal debut of its language model Gemini.
No company is immune to making big mistakes. And I think it’s a mistake to hit the sell button on GOOG stock just because it doesn’t have the absolute number-one spot in chatbots right now.
While OpenAI and ChatGPT may hog most of the early AI glory, I’d say the odds that Alphabet pulls ahead in the AI race are quite high. Even if it doesn’t, the stock only goes for 27.7 times trailing price-to-earnings. Not exactly a multiple you’d come to expect from an AI legend that’s innovating across all fronts. I think it’s a great value right now. Burry’s recent buy certainly suggests such.
JD.com (JD)
JD.com (NASDAQ:JD) is a Chinese e-commerce company that probably won’t be fitting to the risk tolerances of your average investor. Indeed, the Chinese stock market has been far too volatile for comfort. With JD stock now going for around 74% off its 2021 peak levels, though, something has got to give. I think the stock’s dirt-cheap right here at just 13.4 times trailing P/E.
Of course, the Chinese economy has been in a major rut of late. And with geopolitical woes to concern yourself with, only time will tell if JD stock is actually a deep value or if it’s going to prove to be a value trap. Through the eyes of most dip-buyers, JD shares have, in fact, been a value trap of sorts.
But could the tides be turning now that Burry is back in the name? That’s the big question that I don’t have the answer to. In any case, it’s clear that Dr. Burry has a strong stomach and an appetite for absurdly deep value. Personally, I think the man will be proven right, especially as China’s economy climbs out of its rut, something that could happen at any time. You can see why this made our list of the top Michael Burry stocks.
CVS (CVS)
Finally, we have a less-exciting stock in the pharmacy chain and managed health provider CVS (NYSE:CVS), which has been under renewed pressure in recent weeks. Undoubtedly, higher medical costs have acted as a prominent headwind for all the insurers. Combined with lower Medicare rates, CVS stock certainly seems like a stock to take a raincheck on, no matter how cheap it becomes.
With some pretty muted guidance for 2024 and a 10.4 times trailing P/E multiple, shares seem fit for a long-term value investor right here. Undoubtedly, I’m not surprised to hear Burry’s investment firm has been a buyer of shares of late.
Though CVS may have more headwinds than upside catalysts, I do believe that value will prevail. And if you’re willing to ride out the storm, the potential upside could have the potential to be sizeable. Make the right play and grab these Michael Burry stocks.
On the date of publication, Joey Frenette held shares of Alphabet (Class C). The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
