We recently published a list of 10 Michael Burry Stocks with Huge Upside Potential. In this article, we are going to take a look at where Magnera Corporation (NYSE:MAGN) stands against other Michael Burry stocks with huge upside potential.
Michael Burry, founder and manager of Scion Asset Management, is best known for predicting and profiting from the housing bubble’s collapse in the mid-2000s. His bold contrarian bet was famously chronicled in the book and film “The Big Short.” Burry’s investment strategy draws heavily from the rigorous market analysis and principles outlined in Benjamin Graham and David Dodd’s 1934 book “Security Analysis.” The book championed the merits of financial statement analysis, highlighting the importance of intrinsic value and structured investment principles.
That said, Burry has never shied away from putting his own distinct stamp on Wall Street’s time-tested principles. By utilizing complex financial tools, such as derivative securities and short-selling, Burry has amassed a fortune, challenging conventional market wisdom. His 2001 Scion Value Fund letter provides a fascinating insight into his contrarian outlook, which prioritizes long-term value over short-term price fluctuations. Burry makes it clear that to achieve significant long-term returns, he is willing to tolerate short-term volatility. He stated:
“I will always choose the dollar bill carrying a wildly fluctuating discount rather than the dollar bill selling for a quite stable premium.”
He also has no qualms about making significant investments in a few stocks that he believes are undervalued, a tactic the investor employed to strengthen Scion’s holdings at the end of 2024.
In the quarter that ended on December 31, 2024 just before DeepSeek’s artificial intelligence breakthrough sparked a $1.3 trillion surge in Chinese tech stocks, Michael Burry offloaded some of his investments in the country’s tech stocks. The moves came amid a period of high volatility for Chinese stocks, when investors appeared to be losing faith in Beijing following the implementation of a stimulus package in late September. The government’s actions triggered a wild rally until early October, though momentum waned due to a property crisis, a poor economic outlook, and dissatisfaction with the scope of fiscal stimulus in the following months.
For this article, we examined Scion Asset Management’s Q4 2024 13F filings to list down Michael Burry’s stock picks with the highest upside potential. We ranked the companies in ascending order of their upside potential. These equities are also popular among elite hedge funds.
Story Continues
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Magnera Corporation (MAGN): Among Michael Burry Stocks with Huge Upside Potential
Michael Burry of Scion Asset Management
Scion Asset Management’s Q4 Stake: $3.63 million
Analyst Upside as of May 9: 47.25%
Number of Hedge Fund Holders: 47
Magnera Corporation (NYSE:MAGN), formed through the merger of Glatfelter and Berry’s HH&S divisions, manufactures fiber-based engineered products. The company offers lightweight papers and composite fibers for a wide range of applications, including food and beverage, wall covering, technical specialties, composite laminates, and metallized products.
Magnera Corporation (NYSE:MAGN) reported second-quarter earnings and revenue on May 7 that fell short of analyst expectations, while also lowering its full-year guidance. The company cited ongoing global economic uncertainty impacting results. According to CEO Curt Begle Magnera is “prepared to take the appropriate operational and cost measures that align with short-term market realities” in the face of tariff-driven demand concerns. Looking forward, Magnera Corporation (NYSE:MAGN) reduced the range of its full-year comparable adjusted EBITDA guidance from $360 to $380 million. The company reiterated its post-merger adjusted free cash flow projection for fiscal 2025, standing at $75–$95 million.
Kingdom Capital Advisors stated the following regarding Magnera Corporation (NYSE:MAGN) in its Q4 2024 investor letter:
“Our most significant addition in Q4 was Magnera Corporation (NYSE:MAGN). The product of a merger between Glatfelter and Berry’s HH&S businesses, Magnera began trading independently in November. The combined entity should file their 10-K shortly and report their Q1 in February, after which we expect the improvement in volumes for their non-wovens will become apparent. This is not an exciting business, producing products like wipes, diapers, etc. Magnera was spun with a significant amount of debt, but we interpret their upsized $800m notes offering as a sign that the business is turning. The debt is cheap, termed out, and backed by significant assets. We expect Management to focus on deleveraging quickly. As a bonus, some of their business lines were impacted by cheap imports in recent years, and I expect Magnera could be a beneficiary of a tougher tariff regime. At a high level, here is our investment framework: • Magenra should have about $1.8B of net debt after the spin, and 36m outstanding shares, with about $400m of EBITDA. Shares currently trade at $18. • I think Magnera can generate >$100m of annual FCF for the next three years, while growing EBITDA to $475-500m via synergies and volume recovery. These businesses have averaged over $500m of annual EBITDA in the past decade, suggesting this normalization is not overly aggressive. • At their current 6x EBITDA multiple, that would imply the business trades for $40/share within three years (~120% upside/30% IRR).”
Overall, MAGN ranks 4th on our list of Michael Burry stocks with huge upside potential. While we acknowledge the potential for MAGN as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than MAGN but trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
