Dr. Michael Burry surprised investors this year when he reported his first investment portfolio to the SEC since folding his previous fund in 2008 after he correctly predicted and made a large sum of money off the housing crisis, as portrayed in the movie The Big Short. He further surprised investors when that portfolio listed several of the banks that almost fell apart during the crisis, and even further when he sold all of the banks in the first quarter. Perhaps unsurprising is that almost every stock in his portfolio as of the first quarter is performing exceptionally.
As of March 31, Burry’s firm Scion Asset Management, junked positions in Citigroup (C, Financial), Bank of New York Mellon (BK, Financial), PNC Financial Services Group (PNC, Financial) and Bank of American (BAC, Financial) – the bank stocks he disclosed owning at the end of the fourth quarter. Burry founded the Cupertino, California-based firm in 2013, announcing ownership of 13 stocks at the end of 2015. He shrunk that to eight by the end of the first quarter.
Each of Burry’s bank stocks declined year to date by double digits, though it is unknown how long he has had the positions. They could have dampened returns in the first quarter, but their performance has been better since the start of 2013. From Dec. 31, 2012 to March 31, 2016, Bank of America stock rose roughly 21% and Citigroup 8%.
Apple (AAPL, Financial) became the largest position in Burry’s portfolio at the end of the first quarter, though he had purchased no additional shares. He also started three new stock positions: health care provider NCA Holdings (HCA, Financial), biotech Amgen (AMGN, Financial) and auto Gentherm (THRM, Financial).
Burry kept five stocks in his portfolio from the fourth to first quarter. Of those, three had sizable year-to-date gains, with Nexpoint Residential (NXRT, Financial) posting the biggest return at 49%. NexPoint is a REIT with a $414.6 million market cap focused on multifamily properties in the Southeastern U.S. and Texas. It has a 4.2% forward dividend yield and pays a quarterly dividend of 20.6% per share. Burry at first quarter-end owned 609,905 shares of NexPoint, worth 15.6% of his portfolio.
The second best performer, Theravance Biopharma (TBPH, Financial), returned 45% year to date. Burry owned 275,000 shares of the company, worth 10% of his portfolio. He also reduced the position by 37% in the first quarter.
Burry’s worst performer was First Solar (FSLR, Financial), squeezed 26% year to date. He held 100,000 shares of the solar energy company, worth 13.4% of his portfolio at quarter-end.
Stocks Burry purchased in the second quarter have had weaker performance. From first quarter-end to date, Amgen’s stock price rose 11.7%. Gentherm declined 7.8% and Tailored Brands 17%, though Gentherm is a smaller holding at only 4% of the portfolio.
Returns for Burry's portfolio stocks 2016:
Dr. Burry will release his portfolio showing his activity for the second quarter in the next several weeks.
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