Michael Burry of The Big Short fame is increasing his position in Lululemon (LULU). He describes the athletic apparel stock as screaming cheap despite a 45% year-to-date decline.
Burry has been building this contrarian position since June. He argues that the market is overreacting to management missteps, potential tariffs, and slowing North American growth.
The investor compares current sentiment to the pessimism surrounding his successful 2019 GameStop bet. He highlights Lululemon’s healthy balance sheet and growing tangible book value.
The company maintains minimal debt while facing a weakened U.S. outlook. Burry identifies a significant disconnect between the current valuation and underlying financial strength.