Michael Burry has a new list of stocks he likes, right?

The media is making a lot of money out of Scion Asset Management’s latest filings, but don’t read too much into the chatter. Burry was right to be concerned about a market correction in 2023, and the shift to a bullish position is appropriate for 2024; It’s not smart to fight the market. The market rose to retest its all-time high in late 2023 and set new highs in 2024, opening the door to a sustained rally that could add another 600 points to the S&P500 NYSEARCA: SPY this year.

The S&P 500 rally is driven by artificial intelligence, digitalization, cloud and consumer spending, which is resilient in the face of high interest rates. The FOMC may not cut rates as quickly as hoped, but it is on track to start cutting by the end of the year, reducing or removing economic headwinds and unleashing the S&P 500. Until then, these are the new Scion Asset Management’s top picks in the fourth quarter of 2023. These picks are significant because they cover all of the top five holdings and represent more than 5% of the portfolio.

Citigroup: 5.4% of the portfolio, Michael Burry’s fifth largest holding

Citigroup NYSE:C it is the fifth largest holding and represented nearly 5.5% of the portfolio as of early March 2024. The diversified bank is cheap to own at 9.5X earnings and yields a solid 3.8%. The company has been working to turnaround and sustain expected growth in 2024 and 2025. 2024 results will be tepid compared to 2023, but growth is expected to accelerate in 2025, with margins improving in both years.

Analyst sentiment at Citigroup has warmed in recent months. Consensus sentiment tracked by Marketbeat.com is up to Moderate Buy from Hold and the price target is up over 1000 basis points, leading the market. The consensus is about 3% above recent price action, but the most recent targets are above consensus and reaching $95, which is about 70% of the upside. The next visible catalyst for the banking sector is the FOMC meeting in March. The FOMC is not expected to cut rates at this meeting, but it may begin to foreshadow when the first cut will occur.

Oracle: 5.6% of the portfolio, Scion Capital’s fourth largest holding

Oracle NYSE: ORCL has risen to 5.6% of holdings, to 4th place, and may soon reach a higher position. The company is a leading provider of AI-driven database services, cloud services and AI infrastructure, with partnerships with all other major players. Analysts expect growth to accelerate in the third quarter, but continue to underestimate its momentum. Second-quarter results were tepid due to a lack of infrastructure, an issue the company is working on. Third quarter results may not show the increase in available next-gen servers yet, but it will appear at some point in 2024.

Analysts support this market and take it higher. Upward revisions slowed after the Q2 release, but the trend is favorable and will likely continue after the Q3 release. Until then, analysts see this stock rising at least 10% at the consensus midpoint, and there is a dividend. The dividend is worth about 1.4%, with the shares near the middle of the recent trading range. The stock price is moving higher within the range and may soon cross a critical pivot point.

HCA Healthcare: Scion Capital’s largest new holding company

Scion’s largest new stake, HCA Healthcare NYSE:HCA, operates in an industry that is expected to grow as the population ages and services expand and penetrate more deeply into society. The company operates a network of hospitals, clinics and facilities that provide patients with a full range of services. The company is not thriving but is steadily growing and expanding its margin.

The cash flow is used to reinvest in growth, pay dividends and buy back shares. The dividend is worth less than 1%, with shares trading around 15 times earnings, but the payout is reliable, expected to grow and compounded by share buybacks. The buybacks reduced the number of shares by more than 5% in fiscal 2023 and are expected to continue robustly in 2024. The company has more than $6 billion under current authorization, worth about 7 .25% of the market capitalization, with shares near $315.

Before considering Oracle, you’ll want to hear this.

MarketBeat tracks daily Wall Street’s highest-rated and best-performing research analysts and the stocks they recommend to their clients. MarketBeat identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market takes hold… and Oracle wasn’t on the list.

While Oracle currently has a “Moderate Buy” rating among analysts, top analysts believe these five stocks are better buys.

View the five stocks here