Michael Burry Buys BYD Stock After Calling It a Low-Cost Leader

TLDR

• Michael Burry added BYD (BYDDF) in an October 6 portfolio update, with the stock at $9.67.
• He called BYD “potentially the lowest-cost producer of vehicles in the world.”
• BYDDF trades at 0.99 times sales, below its historical median of about 1.3x.
• GuruFocus sets its GF Value at $12.60, a 23% discount to the current price.
• The size of Burry’s position was not disclosed.

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BYD (BYDDF) stock trades at $9.67, and Michael Burry has added the Chinese EV maker to his portfolio. The move was disclosed in an October 6 update on his Substack.

BYD Company Limited, BYDDF

The amount he bought and the size of the position were not disclosed. The update also covered changes to JD.com (JD) and several other holdings.

Burry had signaled interest in September. Asked about the stock, he said, “Yes, I am watching it,” after earlier saying he did not own it.

Burry’s Case for BYD

His earlier analysis pointed to BYD’s valuation, manufacturing 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 a big part of the pitch. He called BYD “potentially the lowest-cost producer of vehicles in the world thanks to its vertically integrated model at scale.”

Battery technology also plays a role. BYD’s Blade battery uses lithium iron phosphate chemistry, which Burry said has cost and safety advantages over nickel-manganese-cobalt batteries.

He did admit the chemistry has lower energy density. He also pointed to international expansion as a possible source of operating leverage.

Burry wrote that he believes long-term return on invested capital will settle above 10%. He described BYD as “exceptionally well-run and technologically advanced.”

In a March analysis, he compared BYD with Tesla (TSLA). BYD generated more revenue despite a much smaller market cap, which he said showed investors value the two businesses differently.

What the Numbers Show

BYDDF trades at a price-to-sales ratio of 0.99. That sits below its historical median of about 1.3x.

GuruFocus puts the GF Value at $12.60, which implies a 23% discount to the current price. The firm warns that the figure leans on past trading multiples and growth trends.

GuruFocus calls the company unprofitable and cash-flow negative, so it says P/E is a weak yardstick. The trailing P/E is listed at 26.09x, against a five-year median of 27.17x.

BYDDF has a GF Score of 94 out of 100. Growth and valuation each scored 10 out of 10, and momentum scored 9.

Profitability scored 8 out of 10, while financial strength came in at 6. Revenue has grown at a 22.5% annual rate over the past three years.

The market cap stands at $115.12 billion. No GuruFocus gurus hold the stock, and no insider buys or sells have been reported in the past 12 months.

News coverage on October 12 confirmed the addition from Burry’s October 6 update. How much he bought remains unknown.