Famed investor Michael Burry recently added 7 companies to his hedge fund’s portfolio (Scion Asset Management). He appears to be going all in on discretionary and industrial sectors as we look to a potential economic downturn on the horizon.
We’ve already helped investors make sense of whether they should take long positions of their own in the first four companies: JD, BKI, COHR, and BABA. And today, we’re going to unpack another position: Wolverine World Wide (WWW).
Burry purchased 365,101 shares of the American footwear manufacturer, which now makes up about 8% of the portfolio. The company has climbed steadily over the past 3 months – up 53% in that period. However, shares did slip a bit in the more recent viewpoint of a week – potentially as a result of lowered guidance.
Wolverine World Wide is facing downward pressure on its margins – an issue they expect to persist over the first half of this year. However, their margin guidance for the second half of the year is more positive and they expect profitability and inventory levels to normalize.
The footwear manufacturer has recently sold parts of their business – like Keds – to fuel future growth plans. The company is looking to weather the storm this year and prevent taking a step backward – with a modest outlook on growth of 0%-2%.
Now – in saying all this, does WWW belong in your portfolio? Michael Burry has a track record of success and many investors are looking to follow his lead in their own investments. Below, we’re going to fully analyze WWW through the VectorVest stock analyzing software to help you determine your next move.
WWW Has Fair Upside Potential and Excellent Timing Despite Poor Safety
The VectorVest system allows you to save time and eliminate costly errors from your investment strategy. You’re given all the insights you need to make confident, emotionless decisions in just three simple ratings: relative value (RV), relative safety (RS), and relative timing (RT).
These ratings sit on a scale of 0.00-2.00, with 1.00 being the average. You can pick stocks above the average to win more trades. Or, better yet, just follow the clear buy, sell, or hold recommendation VectorVest provides for any given stock, at any given time, based on these ratings. As for WWW, here’s what you need to know:
- Fair Upside Potential: The RV rating assesses the 3-year price appreciation potential for a stock in comparison to AAA corporate bond rates and risk. And right now, the RV rating of 0.91 is just fair for WWW. With that said, the stock is overvalued as it currently stands. The current value is just 12.29.
- Poor Safety: In terms of risk, WWW leaves much to be desired for investors. The RS rating of 0.73 is poor. This is calculated by analyzing the company’s financial consistency & predictability, debt-to-equity ratio, and business longevity.
- Excellent Timing: The one thing this stock has going for it right now is timing. As we mentioned earlier, the stock was gravitating in the right direction until last week when it took a quick dip. But as of today, the stock is back up 2%. And according to the 1.75 RT rating by VectorVest, the timing is excellent right now. This rating is based on the direction, dynamics, and magnitude of the stock’s price movement day over day, week over week, quarter over quarter, and year over year.
The overall VST rating of 1.25 is very good - but is it enough to earn WWW a buy recommendation? If you want a clear answer as to what your next move should be with this company, you can get a free stock analysis here. You’re not going to want to miss this one!
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VectorVest advocates buying safe, undervalued stocks, rising in price. Right now, WWW has fair upside potential and excellent timing, but it does have poor safety - so you’ll need to exercise caution in trading this stock.
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