Burry’s Strong Buys - MELI, ADBE, FISV, LULU, ZTS, VEEV, PYPL / Short TSLA, PLTR

Value Investing with Sven Carlin, Ph.D.•Jun 24, 2026

Summary

Sven analyzes Michael Burry's recent portfolio additions, characterizing them as high-risk, high-reward 'falling knife' investments. The core thesis is that these stocks have seen their entire shareholder base rotate, potentially signaling a bottom. Sven emphasizes that Burry is targeting companies with low P/E ratios and significant cash flows, often while simultaneously shorting high-flying AI and tech stocks as a hedge against a market bubble.

Mercado Libre (MELI): Sven notes the stock is down 30% over the last year despite consistent growth rates of 20-40%. He estimates a likely yearly return of 12% or more, suggesting the business could quadruple in four years, potentially doubling the investment even if valuation multiples contract. However, he warns that the primary risk remains capital outflows and economic instability within Latin American markets.

Adobe (ADBE): Sven highlights that the stock has fallen significantly, now trading at a P/E of 11. He calculates an intrinsic value between $182 and $191 for a 10% return and suggests the stock could hit $400 in ten years if earnings grow at 6-8%. While he acknowledges Adobe's strong moat in AI-protected digital design, he personally classifies it as a 'bet' due to decelerating growth expectations.

Fiserv (FI): Sven discusses the company's potential for a 3x return if it achieves its targeted earnings per share of $12 by 2028, which would imply a P/E of 4 at current levels. He mentions that the company possesses entrenched moats in payment processing and generates $4 billion in annual free cash flow. Sven considers this a notable turnaround play despite the recent departure of the CEO.

Lululemon Athletica (LULU): Sven points out that the stock is down 70% from its peak, with a P/E ratio currently at 9. He suggests that an entry point around $150-$160 is ideal for a 'second buy' for those already positioned, as the company remains profitable with no debt. He views the investment as a play on fashion cycles and a potential recovery in North American sales by 2027.

PayPal (PYPL): Sven is critical of PayPal's strategy, noting that while the P/E is low at 8, the company is using $6 billion for buybacks in a stagnating business environment. He argues that buybacks are only effective if the business grows stronger over time, whereas PayPal's current trajectory suggests a lack of reinvestment. He warns that the savings-led strategy is not sustainable for long-term value creation.

Mentioned Stocks

NVDA

Sentiment: SELL

Reasoning: Sven refers to Nvidia as part of an 'AI bubble' that is unsustainable. He views Burry's puts and short positions on the stock as a reasonable hedge against a broader market burst.

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PYPL

Sentiment: HOLD

Reasoning: Sven is wary of the $6 billion buyback program because the business growth is stalling. He warns that buybacks can be destructive if the company is not actually getting stronger or more powerful in its industry over the next decade.

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ADBE

Sentiment: HOLD

Reasoning: Sven calculates an intrinsic value between $182 and $191 for a 10% return. While he acknowledges the stock is cheap at a P/E of 11, he is personally not buying because of decelerating growth ('delta of the delta') and technical shifts in the industry.

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LULU

Sentiment: BUYAction: RECOMMENDED

Reasoning: Sven suggests that $150-160 is a good entry point for a second buy. He believes that because they are profitable, debt-free, and growing in China, the stock will eventually see a re-rating once North American sales stabilize.

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Sentiment: BUYAction: RECOMMENDED

Reasoning: Sven notes a targeted EPS of $12 in 2028, which would suggest a 3x return. He believes the business is entrenched in fintech systems and generates strong cash flows, making the risk/reward profile very interesting.

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MELI

Sentiment: BUYAction: RECOMMENDED

Reasoning: Sven sees a high probability of a 12%+ yearly return. He argues that if growth continues at 30%, the business will quadruple in 4 years, providing a double in investment even if the P/E ratio contracts to 20-25.

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