TLDR
- BYD (BYDDF) stock trades at $9.67 after Michael Burry added it in an October 6 update.
- Burry called BYD “potentially the lowest-cost producer of vehicles in the world.”
- Price-to-sales is 0.99, below the historical median of about 1.3x.
- GuruFocus puts fair value at $12.60, or 23% above the current price.
- Burry did not disclose how much he bought.
BYD (BYDDF) stock is trading at $9.67 after investor Michael Burry added the automaker to his portfolio. The buy came to light in an October 6 update on his Substack.
He did not say how much he bought or how big the position is. The same update listed changes to JD.com (JD) and several other holdings.
Burry first flagged interest in September. Asked about BYD, he said, “Yes, I am watching it,” after earlier saying he owned none.
GuruFocus data shows a price-to-sales ratio of 0.99. That is below the stock’s historical median of about 1.3x.
What Burry Likes About BYD
His earlier write-up focused on valuation, scale and technology. He wrote, “I would be an aggressive buyer at HK$75 or better, if the thesis still holds at that time.”
Cost is central to his view. He called BYD “potentially the lowest-cost producer of vehicles in the world thanks to its vertically integrated model at scale.”
The Blade battery is another piece of the case. It uses lithium iron phosphate chemistry, which Burry said is cheaper and safer than nickel-manganese-cobalt, though it holds less energy.
He also named international expansion as a possible source of operating leverage. He expects long-term return on invested capital to settle above 10%.
In March, Burry set BYD beside Tesla (TSLA). BYD brought in more revenue with a much smaller market cap, which he took as a sign investors price the two firms differently.
Valuation Data From GuruFocus
GuruFocus puts fair value, which it calls GF Value, at $12.60. That is about 23% above the current price, though the firm says the figure leans on past multiples and growth trends.
The firm describes BYD as unprofitable with negative free cash flow. That is why it calls P/E a weak tool here, even with a trailing P/E of 26.09x against a five-year median of 27.17x.
BYDDF earns a GF Score of 94 out of 100. Growth and valuation each score 10, and momentum scores 9.
Profitability scores 8 and financial strength scores 6. Revenue has grown 22.5% a year over the past three years.
Market cap stands at $115.12 billion. No insider buys or sells were reported in the past 12 months, and no GuruFocus gurus hold the stock.
Coverage on Monday, October 12 confirmed the addition from Burry’s October 6 update. The size of the position is still unknown.
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