The Big Short's Michael Burry Is Buying the Dip—Here's What His Latest Moves Tell Us

Michael Burry just did it again. After nearly clearing his entire portfolio in Q1 (a move that brilliantly dodged the April market crash), the legendary short-seller is back in buying mode—and he’s targeting two beaten-down stocks that most investors have written off.

Burry’s track record speaks for itself: the guy bet against the housing market before 2008 and made a fortune. Now he’s playing contrarian on UnitedHealth and Lululemon, both down 40%+ this year. Let’s break down why.

UnitedHealth: When the Pain Creates Opportunity

UnitedHealth (UNH) has been absolutely hammered. Down ~41% YTD, the healthcare giant got slapped with a $6.5B medical cost miss for 2025. Management slashed EPS guidance from $29.50-$30 down to just $16—ouch. Add the DOJ investigation into Medicare Advantage billing practices, and you’ve got a perfect storm.

But here’s the thing: UnitedHealth is still the largest health insurer in the U.S., which means serious pricing power. Burry loaded up with ~20K shares plus 350K shares via long call options. He’s not alone—Warren Buffett and David Tepper are also buying the dip.

The math: UnitedHealth is still generating solid operational cash flow, holds a 9%+ free-cash-flow yield, and pays a 3% dividend. Burry seems to be betting the near-term pain is temporary and the company’s fortress balance sheet can weather the storm.

Lululemon: Luxury Gets Discounted

Lululemon (LULU) is down ~47% this year, caught between tariffs, tougher consumer spending, and fading COVID tailwinds. Management just cut FY EPS guidance below analyst expectations, citing a “dynamic macroenvironment.”

Yet Burry bought 50K shares outright and another 400K via call options. Why? Because LULU’s Q1 actually beat estimates on both EPS and revenue growth. The company’s got $1.3B in cash, zero debt, and is planning modest price hikes to offset tariff impacts. Trading at just 13.5x forward earnings, Burry is likely thinking the bad news is already baked in.

The Contrarian Play

Burry’s message is clear: when quality companies get crushed, that’s when patient capital wins. Both stocks have solid balance sheets, pricing power, and strong brands. He’s betting that the current macro fears are temporary obstacles, not permanent damage.

The question investors need to ask: Is he early, or is he onto something?