Michael Burry Buys Abandoned Stocks Down 40% This Year

Michael Burry, a finance expert from Bloomberg, has recently purchased two abandoned stocks that have dropped at least 40% this year. UnitedHealth, the largest healthcare insurer in the US, is down 41% this year due to underestimating medical costs and a DOJ investigation. Despite this, Burry and other notable investors have bought the dip, with significant pricing power and a free-cash-flow yield over 9% in the past 12 months.

Michael Burry, a renowned investor and hedge fund manager, has recently taken a bullish stance on UnitedHealth Group (UNH), despite the company's significant 41% year-to-date decline. Burry's hedge fund, Scion Asset Management, has invested $109.189 million in call options on UNH's stock [1]. This move comes as UnitedHealth faces financial challenges due to underestimated medical costs and an ongoing Department of Justice (DOJ) investigation into its billing practices [2].

The investment in UNH is part of a broader $383 million bullish bet that Scion has placed on four different stocks, including Regeneron Pharmaceuticals, Lululemon, and Meta [1]. This strategic move by Burry, known for predicting the 2008 housing market collapse, suggests a strong belief in the long-term potential of these companies.

UnitedHealth's recent struggles have led to a significant drop in its stock price. The company's financial performance has been negatively impacted by higher medical costs and the ongoing DOJ investigation. Despite these challenges, Burry's investment indicates that he believes the market has overreacted to the company's short-term difficulties and that the long-term prospects remain strong.

Burry's purchase of UNH call options aligns with his reputation for making contrarian bets. His investment strategy often involves identifying undervalued companies that are temporarily out of favor with the market. By buying call options, Burry is betting that UNH's stock price will rise, potentially providing a significant return on investment.

The investment by Burry and other notable investors in UNH's stock suggests that the market is starting to recognize the company's long-term value. Despite the current challenges, the free-cash-flow yield of UnitedHealth over the past 12 months is over 9%, indicating strong financial health [1].

In conclusion, Michael Burry's recent bullish bet on UnitedHealth Group highlights the potential for significant returns in the healthcare sector. While the company faces short-term challenges, the long-term prospects appear promising, as indicated by the strong financial metrics and the investment by prominent investors like Burry.

References:
[1] https://dailyhodl.com/2025/08/21/big-shorts-michael-burry-pours-383030000-into-a-bullish-bet-on-four-stocks-including-one-major-dow-30-play/
[2] https://www.politico.com/newsletters/politico-pulse/2025/08/21/lawmakers-offload-unitedhealth-stock-00517374