EXPE - Michael Burry's Most Significant Portfolio Updates Q2

2023-08-15 22:31:02 ET

Summary

• Michael Burry's recent 13F filing reveals his top holdings as Expedia Group, Charter Communications, and Generac Holdings.
• Each respective investment has a unique thesis that revolves around comprehensive industry and consumer trends.
• Quick look at the Seeking Alpha Quantitative analysis provided at a glance.

Michael Burry, the investor and central figure in "The Big Short," is widely recognized for his investment style and ability to identify market inefficiencies and bubbles. He gained fame for predicting and profiting from the subprime mortgage crisis in 2008, earning him the moniker "Cassandra," The Trojan priestess of Greek mythology who prophesied the future.

Burry recently disclosed his funds holdings in a 13F report for the quarter of 2023 revealing a portfolio of 33 stocks valued at $1.74 billion as of June 30th. Noteworthy among his holdings are Expedia Group Inc (NASDAQ: EXPE ) Charter Communications Inc (NASDAQ: CHTR ) and Generac Holdings Inc (NYSE: GNRC ).

In this article, we will delve into some of Burry's acquisitions from his 13F filing, aiming to comprehend the reasoning and expectations behind these choices. We will also explore Seeking Alpha's Quantitative analysis, for further insights and reference as we delve into his holdings.

Expedia Group Inc

Expedia Group Inc is a travel company that operates well known brands, like Expedia.com, Hotels.com, Trivago, Orbitz, Travelocity, Hotwire and Vrbo. They provide a range of travel services including hotel bookings, flight reservations, car rentals, vacation packages, cruises and activities.

During the quarter of this year Burry purchased 100,000 shares of Expedia Group which became his investment. The shares were traded at a price of $109.39 during that period. As of August 14th in the year 2023 the stock price, for Expedia Group stood at $111.93 with a market capitalization of $16 billion.

Burry’s purchase of Expedia Group may indicate his bullish outlook on the travel industry, which is set to benefit from secular tailwinds. Forbes reports, "49% of Americans Plan To Travel More in 2023. This is especially true among younger respondents, with 59% of those between the ages of 18 to 26 planning to travel more in 2023. This is impressive considering 45% of respondents traveled once or twice in 2022, with 42% traveling three or more times in 2022."

Seeking Alpha assigns Expedia a Quantitative Rating of "Buy." Expedia earns a B- Valuation, A+ Growth, A Profitability, B Momentum, and B- Revisions score.

Charter Communications Inc

Charter Communications Inc is a leading broadband connectivity company that provides cable television, internet access, voice services, and wireless solutions to residential and commercial customers. The company operates under the Spectrum brand name in 41 states.

Burry bought 25,000 shares of Charter Communications in the second quarter, making it his second-largest holding. The shares traded at an average price of $367 during the quarter. As of August 14, 2023, Charter Communications’ stock price was $427.28, with a market cap of $63.95 billion.

Burry’s purchase of Charter Communications may indicate his bullish outlook on the broadband industry, which has been benefiting from the increased demand for high-speed internet access amid the pandemic-induced shift to remote work, online education, streaming entertainment, and e-commerce. CHTR has a low PE ratio of 14.36, a high EPS growth rate of 17%, and a positive PEG ratio of 0.7, indicating that it is undervalued relative to its earnings potential.

Seeking Alpha assigns Charter Communications a Quantitative Rating of "Buy." Charter earns a C Valuation, B Growth, A+ Profitability, B+ Momentum, and C Revisions score.

Generac Holdings Inc

Generac Holdings Inc is a known company that manufactures and sells power generation equipment and other engine powered products. They have a range of offerings, including generators home standby generators, industrial generators, transfer switches, mobile products and energy storage systems.

Burry added 55,000 shares of Generac Holdings to his investment portfolio making it his largest holding. He purchased the shares at a price of $149.13, per share during the quarter. As of August 14 2023 Generac Holdings’ stock price stood at $112.24 with a market capitalization of $6.99 billion.

Burry's decision to invest in Generac Holdings might indicate his view on the power generation industry. This industry has been witnessing increased demand for its products and services due to factors such as severe power outages caused by natural disasters, aging infrastructure concerns, grid stability issues and cyberattacks. Generac has observed growth in demand for its offerings.

Generac Holdings attributes its revenue growth to customer interest in their home standby generators and portable generators well as their environmentally friendly solutions, like solar inverters and battery storage systems. The company has also expanded geographically while focusing on product innovation and strategic acquisitions to further enhance their success. The company anticipates that its revenue will continue to increase as more residential and commercial customers recognize the benefits of power solutions and choose to adopt them.

Seeking Alpha assigns Generac Holdings a Quantitative Rating of "Sell." Charter earns a C- Valuation, C Growth, C- Profitability, D Momentum, and D+ Revisions score.

Takeaway

These investments make sense, not too complicated here. Burry had some interesting bets on the travel, broadband, and power generation industries. They start with a simple idea, and end with some statistical analysis, exactly his style. If not investment ideas themselves, these investments serve as a reminder to keep your ideas simple if possible. They should make sense on a lot more than just on paper because investments don't pan out on paper, they pan out in reality. Michael's understanding of this is exactly why his returns are superior.

For further details see: