Michael Burry Doubles Down On Prison Stocks, Adds This Space Company In New Third Quarter Positions
Former hedge fund manager and “Big Short” fame investor Michael Burry made headlines earlier this year when he sold all of his positions except one. Burry added five new positions in the third quarter and increased the position in the lone carryover from the second quarter.
Burry sounded the alarm throughout 2022 on the bear market and the likelihood that stocks would fall in price. The comments came after a filing revealed that Burry sold positions in Apple Inc (NASDAQ: AAPL), Meta Platforms Inc (NASDAQ: META) and Alphabet Inc (NASDAQ: GOOGL) in the second quarter.
“Truth and data are bloody weapons in this country, and you will be judged accordingly,” Burry said on Twitter on Tuesday.
The lone stock owned by Burry at the end of the second quarter was Geo Group Inc (NYSE: GEO), a for-profit prison company.
A new filing showed Burry increased his position in Geo Group and added five additional stocks in the third quarter.
The positions owned by Burry at the end of the third quarter were:
- Aerojet Rocketdyne Holdings Inc (NASDAQ: AJRD): 132,561 shares, $5.3 million
- Charter Communications Inc (NASDAQ: CHTR): 10,000 shares, $3.0 million
- Corecivic Inc (NYSE: CXW): 724,895 shares, $6.4 million
- Geo Group: 2,019,150 shares, $15.5 million
- Liberty Latin America Ltd (NASDAQ: LILAK): 155,761 shares, $958,000
- Qurate Retail Inc (NASDAQ: QRTEA): 5,000,000 shares, $10.1 million
In the third quarter, Burry quadrupled his position in Geo Group and also added a position in CoreCivic, another private prison operator. CoreCivic owns around 50 facilities and gets revenue from federal, state and local government agencies.
With the position in CoreCivic and the added position in Geo Group, Burry could be betting that private prison operators won’t be going away anytime soon, a common notion under the Joe Biden presidency. Burry could be betting on the companies diversifying away from prison revenue and also on a new president in 2024 being better for the sector.
The new position in Aerojet Rocketdyne could signal a belief that the space industry could be one Burry is betting on or maybe pressure for acquisition as the company was the target of an acquisition by Lockheed Martin Corp (NYSE: LMT) previously, before the FTC sued to block the merger.
“The Silliness is back. After 1929, after 1968, after 2000, after 2008, the strain of Silliness that transformed bulls into bubbles completely and utterly disappeared. But that familiar COVID-era Silliness is not dead yet. Like 2001 before Enron, before 9/11, before WorldCom,”said in a now deleted tweet on August 4. Burry tends to delete his tweets soon after posting.
The other bets by Burry could signal some media-related stocks could be undervalued. Qurate Retail is the owner of QVC and HSN, assets that have strong ties to traditional television. The company is also working to grow its online commerce business through its Zulily segment which was acquired in 2015.
Charter Communications owns assets including Charter, Time Warner Cable and Bright House Networks which were the leftovers from former cable companies after multiple mergers and spinoffs. The company is one of the largest cable companies in the U.S. and also owns several sports and news networks.
Burry sounded the alarm on inflation and stocks falling further earlier this year. The fact Burry added positions in the third quarter could indicate that sentiment was improving, but based on the holdings, could favor certain sectors first.
Produced in association with Benzinga.
Edited by Alberto Arellano and Joseph Hammond