Over the last five years, the FTSE 100 is up 15%, compared to 85% for the S&P 500. Despite this, several top hedge funds own UK stocks – and have been buying them recently. One of the most prominent examples is run by Michael Burry. During the first three months of 2024, Scion Asset Management bought 175,000 shares in BP (LSE:BP). Michael Burry is best known for shorting the US housing market between 2007 and 2009. More generally, though, Scion Asset Management focuses on mispriced opportunities. A more recent example is GEO Group. Burry bet on the stock after the Biden administration elected not to renew the government’s contracts with the US prison operator. But if the state wasn’t going to pay companies to run its prisons, it would have to buy them itself. And they were worth a lot more than GEO Group held them on its balance sheet for. Burry saw that the likely sale of the assets for more than the company’s market value created an opportunity. So Scion was able to take advantage of a hugely undervalued stock. With BP, the opportunity isn’t as obvious, but there are a few things worth noting about the company...