According to current portfolio statistics, a Premium feature of GuruFocus, four stocks in Scion Asset Management’s fourth-quarter 2022 13F equity portfolio that are undervalued based on GF Value are Alibaba Group Holding Ltd. (BABA, Financial), JD.com Inc. (JD, Financial), MGM Resorts International Inc. (MGM, Financial) and Black Knight Inc. (BKI, Financial).
Prior to starting Scion in 2013, Michael Burry (Trades, Portfolio) recognized and invested in the subprime mortgage crisis in 2008, making a large short bet in collateralized mortgage obligations. His long-term bet was featured in the film “The Big Short.”
As of December 2022, Scion’s $47 million 13F equity portfolio contains nine stocks. The top three sectors in terms of weight are consumer cyclical, technology and industrials, representing 39.33%, 31.21% and 29.45% 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.
Alibaba
Scion owns 50,000 shares of Alibaba (BABA, Financial), giving the position 9.46% equity portfolio weight. The position represents the firm’s fourth-largest holding.
Shares of Alibaba traded around $93.59 on Wednesday, showing the stock is significantly undervalued based on its price-to-GF Value ratio of 0.43.
The Chinese e-commerce giant has a GF Score of 92 out of 100 based on a growth rank of 10 out of 10, a profitability rank of 9 out of 10, a GF Value rank of 4 out of 10 and a rank of 7 out of 10 for financial strength and momentum.
Alibaba’s high growth rank is driven by several positive investing signs, which include a 3.5-star business predictability rank, a three-year revenue growth rate that outperforms more than 90% of global competitors and a three-year book value per share growth rate that outperforms approximately 84% of global retail companies.
Alibaba’s profitability ranks 9 out of 10 on the back of operating margins outperforming approximately 84% of global competitors. Additionally, the company’s Greenblatt return on capital outperforms approximately 88% of global retail companies.
Other gurus with holdings in Alibaba include David Herro (Trades, Portfolio)’s Oakmark International Fund, PRIMECAP Management (Trades, Portfolio) and Dodge & Cox.
JD.com
Scion owns 75,000 shares of JD.com (JD, Financial), giving the position 9.05% equity portfolio weight. The position represents the firm’s fifth-largest holding.
Shares of JD.com traded around $37.10 on Wednesday, showing the stock is significantly undervalued based on its price-to-GF Value ratio of 0.35.
The Beijing-based e-commerce company has a GF Score of 75 out of 100 based on a growth rank of 9 out of 10, a financial strength rank of 7 out of 10, a profitability rank of 5 out of 10, a GF Value rank of 4 out of 10 and a momentum rank of 2 out of 10.
JD.com’s high growth rank is driven by several positive investing signs, which include a three-year revenue growth rate that outperforms approximately 82% of global competitors and a three-year book value per share growth rate that outperforms approximately 88% of global retail companies.
Other gurus with holdings in JD.com include Chase Coleman (Trades, Portfolio)’s Tiger Global Management and Dodge & Cox.
MGM Resorts International
Scion owns 100,000 shares of MGM Resorts International, giving the position 7.21% equity portfolio weight.
Shares of MGM Resorts International traded around $44.89 on Wednesday, showing the stock is modestly undervalued based on its price-to-GF Value ratio of 0.79.
The Las Vegas-based resort and casino operator has a GF Score of 78 out of 100 based on a rank of 9 out of 10 for momentum and GF Value, a financial strength rank of 3 out of 10 and a rank of 6 out of 10 for profitability and growth.
Although the company has a high Piotroski F-score of 7 out of 9, MGM’s operating margin of -13.07% underperforms 76% of global competitors. The company had just six years of positive net income over the past decade; further, the company had operating losses in seven of the past 12 quarters.
Despite having modest profitability and growth, MGM Resorts International’s momentum ranks 9 out of 10 on the back of a 6-1 month momentum index of 26.65%, which outperforms approximately 79% of global competitors.
Other gurus with holdings in MGM include Mason Hawkins (Trades, Portfolio)’ Southeastern Asset Management and Barrow, Hanley, Mewhinney & Strauss.
Black Knight
Scion owns 150,000 shares of Black Knight (BKI, Financial), giving the position 19.90% equity portfolio weight. The position represents the firm’s second-largest holding.
Shares of Black Knight traded around $56.57 on Wednesday, showing the stock is significantly undervalued based on its price-to-GF Value ratio of 0.65.
The Jacksonville, Florida-based data analytics software company has a GF Score of 76 out of 100 based on a GF Value rank of 10 out of 10, a financial strength rank of 4 out of 10, a momentum rank of 2 out of 10 and a rank of 7 out of 10 for profitability and growth.
Black Knight’s solid profitability rank is driven by operating margins outperforming more than 88% of global competitors despite declining by approximately 5% per year on average over the past five years.
