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Michael Burry's Firm Blasts Into Lockheed Martin

The 'Big Short' investor's firm releases quarterly portfolio

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Nov 18, 2021
Summary
  • Scion Asset Management took a large stake in Lockheed Martin.
  • Firm’s other new buys were in NOW and SCYNEXIS.
  • Firm’s other three holdings are in CVS, Geo Group and CoreCivic.
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Scion Asset Management LLC, the firm founded by “Big Short” investor

Michael Burry (Trades, Portfolio), disclosed this week it established three new positions during the third quarter: Lockheed Martin Corp. (LMT, Financial), NOW Inc. (DNOW, Financial) and SCYNEXIS Inc. (SCYX, Financial). The firm also has holdings in CVS Health Corp. (CVS), The GEO Group Inc. (GEO, Financial) and CoreCivic Inc. (CXW, Financial).

As of Sept. 30, Scion’s $42 million equity portfolio contains six stocks with a turnover ratio of 30%. The top three sectors in terms of weight are health care, real estate and industrials, representing 42.89%, 29.54% and 24.82% of the equity portfolio.

Lockheed Martin

Scion purchased 30,000 shares of Lockheed Martin (

LMT, Financial), allocating 24.82% of its equity portfolio to the stake. Shares averaged $362.11 during the third quarter; the stock is modestly undervalued based on Thursday’s price-to-GF Value ratio of 0.85.

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GuruFocus ranks the Bethesda, Maryland-based aerospace and defense company’s profitability 8 out of 10 on several positive investing signs, which include a high Piotroski F-score of 8 and an operating margin that has increased approximately 4.4% per year on average over the past five years and outperforms more than 78% of global competitors.

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Other gurus with holdings in Lockheed Martin include

Yacktman Asset Management (Trades, Portfolio) and Catherine Wood (Trades, Portfolio)’s ARK Investment.

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NOW

The firm invested in 150,000 shares of NOW (

DNOW, Financial), giving the position 2.75% equity portfolio space.

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Shares averaged $8.18 during the third quarter; the stock is significantly overvalued based on Thursday’s price-to-GF Value ratio of 1.74.

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GuruFocus ranks the Houston-based energy distribution company’s financial strength 6 out of 10 on the back of cash-to-debt and debt-to-equity ratios that outperform over 75% of global competitors despite having a low Altman Z-score of 1.89.

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SCYNEXIS

The firm purchased 174,030 shares of SCYNEXIS (

SCYX, Financial), dedicating 2.21% of its equity portfolio to the holding. Shares averaged $6.57 during the third quarter.

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According to GuruFocus, the New Jersey-based drug development company’s cash-to-debt ratio of 2.34 outperforms more than 62.27% of global competitors, while its debt-to-equity ratio of 1.14 underperforms over 90% of global drug manufacturers.

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CVS

The firm owns 200,000 shares of CVS (CVS), giving the position 40.68% equity portfolio weight.

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Shares of CVS averaged $83.80 during the third quarter; the stock is modestly overvalued based on Thursday’s price-to-GF Value ratio of 1.25.

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GuruFocus ranks the Woonsocket, Rhode Island-based health care company’s financial strength 4 out of 10 on the back of a low Altman Z-score of 2.15 and interest coverage and debt ratios that underperform more than 81% of global competitors.

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GEO Group

The firm sold 1,341,180 shares of GEO Group (

GEO, Financial), dumping 53.65% of the stake and 0.46% of its equity portfolio. Shares averaged $7.35 during the third quarter; the stock is modestly undervalued based on Thursday’s price-to-GF-Value ratio of 0.84.

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GuruFocus ranks the Boca Raton, Florida-based REIT’s financial strength 3 out of 10 on several warning signs, which include debt ratios underperforming more than 93% of global competitors.

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CoreCivic

The firm sold 887,874 shares of CoreCivic (

CXW, Financial), axing 68.3% of the stake and 0.44% of its equity portfolio. Shares averaged $9.75 during the third quarter.

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GuruFocus ranks the Nashville, Tennessee-based REIT’s financial strength 4 out of 10 on several warning signs, which include a low Altman Z-score of 0.89 and interest coverage and debt ratios underperforming more than 56% of global competitors.

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I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
The views of this author are solely their own opinion and are not endorsed or guaranteed by GuruFocus.com
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