Scion Asset Management, the firm founded by Michael Burry, disclosed in a regulatory filing that it boosted its stake in The GEO Group Inc. (GEO, Financial) and established five new positions during the third quarter: Qurate Retail Inc. (QRTEA, Financial), CoreCivic Inc. (CXW, Financial), Aerojet Rocketdyne Holdings Inc. (AJRD, Financial), Charter Communications Inc. (CHTR, Financial) and Liberty Latin America Ltd. (LILAK, Financial).
Burry recognized and invested in the subprime mortgage crisis of 2008, making a large short bet in collateralized mortgage obligations. The “Big Short” investor started California-based Scion in 2013 and has been reporting his holdings in public companies through 13F filings.
As of September, the firm’s $41 million 13F equity portfolio contains six holdings with a quarterly turnover ratio of 91%. The top four sectors in terms of weight are real estate, consumer cyclical, industrials and communication services, representing 53.17%, 24.34%, 12.84% and 9.67% of the equity portfolio.
Investors should be aware 13F filings do not give a complete picture of a firm’s holdings as the reports only include its positions in U.S. stocks and American depository receipts, but they can still provide valuable information. Further, the reports only reflect trades and holdings as of the most-recent portfolio filing date, which may or may not be held by the reporting firm today or even when this article was published.
The GEO Group
Having established a 501,360-share position in The GEO Group (GEO, Financial) during the second quarter, Scion purchased 1,517,790 shares during the third quarter, expanding the stake by 302.73% and its equity portfolio by 28.30%.
Shares of The GEO Group averaged $7.38 during the third quarter; the stock is fairly valued based on its price-to-GF Value ratio of 1.09 as of Tuesday.
The Boca Raton, Florida-based detention facility REIT has a GF Score of 70 out of 100 based on a profitability rank of 7 out of 10, a GF Value rank of 5 out of 10, a momentum rank of 3 out of 10 and a rank of 4 out of 10 for growth and financial strength.
Other gurus with holdings in The GEO Group include Jim Simons (Trades, Portfolio)’ Renaissance Technologies, Jeremy Grantham (Trades, Portfolio)’s GMO and Lee Ainslie (Trades, Portfolio)’s Maverick Capital.
Qurate Retail
The firm invested in 5 million shares of Qurate Retail (QRTEA, Financial), giving the position 24.34% equity portfolio weight. Shares averaged $2.90 during the third quarter.
GuruFocus’ GF Value Line labeled the Englewood, Colorado-based video and online commerce company a possible value trap based on its low price-to-GF-Value ratio of 0.26 as of Tuesday and poor financial strength rank of 4 out of 10.
Qurate Retail has a GF Score of 71 out of 100: Despite financial strength, GF Value and momentum ranking 5 out of 10 or less, the company has a profitability rank of 7 out of 10 and a growth rank of 6 out of 10.
CoreCivic
Scion purchased 724,895 shares of CoreCivic (CXW, Financial), allocating 15.52% of its equity portfolio to the holding.
Shares of CoreCivic averaged $10.10 during the third quarter; the stock is modestly overvalued based on its price-to-GF Value ratio of 1.18 as of Tuesday.
The Nashville, Tennessee-based safety facilities company has a GF Score of 72 out of 100 based on a momentum rank of 10 out of 10, a profitability rank of 7 out of 10, a GF Value rank of 3 out of 10 and a rank of 4 out of 10 for growth and financial strength.
Aerojet Rocketdyne Holdings
Scion invested in 132,561 shares of Aerojet Rocketdyne Holdings (AJRD, Financial), giving the position 12.84% equity portfolio weight. Shares averaged $42.31 during the third quarter; the stock is fairly valued based on its price-to-GF Value ratio of 1.08 as of Tuesday.
The El Segundo, California-based aerospace and defense company has a GF Score of 77 out of 100 based on a momentum rank of 9 out of 10, a GF Value rank of 3 out of 10 and a rank of 6 out of 10 for profitability, growth and financial strength.
Charter Communications
The firm purchased 10,000 shares of Charter Communications (CHTR, Financial), giving the position 7.35% equity portfolio weight. Shares averaged $427.79 during the third quarter.
GuruFocus’ GF Value Line labeled the Stamford, Connecticut-based cable company a possible value trap based on its low price-to-GF-Value ratio of 0.47 as of Tuesday and a rank of 4 out of 10 or below for financial strength and momentum.
Despite low ranks for financial strength, momentum and GF Value, Charter Communications has a GF Score of 82 out of 100, driven by a growth rank of 10 out of 10 and a profitability rank of 8 out of 10. The company’s positive investing signs include a four-star business predictability rank, a high Piotroski F-score of 8 out of 9 and an operating margin that has increased approximately 13.70% per year on average over the past five years and outperforms more than 82.52% of global competitors.
Liberty Latin America
The firm invested in 155,761 shares of Liberty Latin America (LILAK, Financial), giving the position 2.32% equity portfolio weight. Shares averaged $7.08 during the third quarter; the stock is modestly undervalued based on its price-to-GF Value ratio of 0.72 as of Tuesday.
The cable company has a GF Score of 73 out of 100 based on a GF Value rank of 8 out of 10, a momentum rank of 7 out of 10, a financial strength rank of 3 out of 10 and a rank of 5 out of 10 for profitability and growth.
