This article is part of a series that provides an ongoing analysis of the changes made to George Soros's US stock portfolio on a quarterly basis. It is based on George Soros's regulatory 13F Form filed on 11/14/2012. Please visit our Tracking Soros Fund Management Holdings article for an idea on how his holdings have progressed over the years and our previous update highlighting the fund's moves during Q2 2012.
Soros Fund Management invests globally and the long positions in the US market reported in the 13F filings represent only ~25% of the overall portfolio. The 13F portfolio increased substantially this quarter from $6.92B to $9.27B. The number of positions also went up from 168 to 179. Very small stock positions and large debt holdings together account for the vast majority of the portfolio holdings.
US long stock holdings of significant size (>0.5%) represent about 52% of the 13F portfolio. The US long investments are diversified with a large number of very small equity positions, a small number of very large equity positions, and a number of large debt holdings. As the small positions (<0.5%) do not indicate a clear bias, the focus of this article is on the larger US long equity positions.
Just two positions remained untouched during the quarter and nineteen new positions figure among his large holdings. This is not a surprise as Soros follows a trend-following philosophy.
American International Group (AIG): AIG is Soros's largest equity long position in the 13F portfolio. It accounts for around 5.4% of the US long portfolio. The stake was established this quarter at prices between $30.15 and $35.02. The stock had a low of around $30 in the quarter followed by an uptrend that lifted the share price over $37 by mid-October. It will be interesting to see whether he exited before the downtrend that followed.
CF Industries (CF) and Johnson & Johnson (JNJ): CF and JNJ are ~2% of the US long portfolio stakes each initiated this quarter. CF was purchased at prices between $190.97 and $223.69. The stock currently trades at around $195. JNJ was purchased at prices between $67.21 and $69.53. The stock currently trades at around $69.
Google Inc. (GOOG), LinkedIn Corp. (LNKD), Pioneer Natural Resources (PXD), and Walgreen Company (WAG): GOOG and LNKD are ~1.5% of the US long portfolio stakes each purchased this quarter. GOOG is a good trading stock for Soros and he has previously done several round-trips on it. The stake was purchased this quarter at prices between $570.48 and $756.50 and the stock currently trades at around $647. LNKD stake was purchased between $93.51 and $123.23 and it currently trades at $103.
General Motors (GM), Peabody Energy (BTU), Amazon.com (AMZN), Cheniere Energy (LNG), Citigroup Inc. (C), Delta Air Lines (DAL), Denbury Resources (DNR), Freeport-McMoRan Copper (FCX), Home Depot (HD), Target Corporation (TGT), Manchester United (MANU), and Tyco International (TYC): These are very small stakes (below 1% of the US long portfolio) purchased this quarter. As the stakes are small, they do not signify a clear bias. AMZN is a 0.7% of the US long portfolio position established this quarter at prices between $215.36 and $261.68. The stock currently trades at around $221. Soros has a history of trading AMZN's price-trends successfully and this is likely another of such forays.
Comverse Technology (CMVT): CMVT is a 1.4% position that was reduced marginally last quarter before the elimination this quarter. The original stake was established in Q4 2011 at prices between $6.34 and $7 and the stake disposal this quarter happened at prices between $5.22 and $6.49. Soros probably realized some losses on this transaction. The stock currently trades well below that range at around $3 - the low price is because Comverse Inc. (CNSI) was spun-off in October which resulted in CMVT shareholders receiving one share of CNSI for every ten shares of CMVT held. CNSI started trading in late October at $27.80 per share, meaning CMVT shareholders received $2.78 worth of CNSI shares in the transaction. CNSI currently trades at around $27.20.
Powershares (QQQ) PUTS: QQQ puts was a fairly large 4.3% position that was reduced to an insignificantly small stake last quarter and was eliminated this quarter. The cuts in the put positions along with the increase in the long portfolio positions indicate Soros has become progressively bullish on US equities in the last two quarters.
Clorox Company (CLX) and PepsiCo Inc. (PEP): These are small (~0.5% of the US long portfolio) positions that were established last quarter and disposed-off this quarter. CLX was entered at prices between $67.03 and $73.06 and exited between $70.10 and $73.44. The stock currently trades at $74.29. PEP was purchased at prices between $68.79 and $73.58 and sold between $64.85 and $70.66. The stock currently trades at $68.31. The stake eliminations indicate a mild bearish bias.
Acacia Research Corporation (ACTG): ACTG is a ~1.2% position that was increased by around 20% this quarter. The stake was increased by 30% last quarter as well. The original stake was a very small position in the portfolio as of Q4 2011. The bulk of the current stake was acquired in Q1 2012 at prices between $35.74 and $43.34. The stock currently trades at around $23.5, well below the lowest price Soros could have acquired the bulk of the stake at. For those attempting to follow Soros's moves, ACTG is a good position to consider for further research.
Adecoagro S A (AGRO): AGRO is a fairly large ~3% of the US long portfolio position that was established prior to its IPO. The position was increased marginally in the last two quarters. The stock currently trades at around $8.60, well below the IPO price of $11. The large position indicates a bullish bias.
Charter Communications, Inc. (CHTR): CHTR is a ~1.6% position that was roughly doubled last quarter and increased by around 5% this quarter. The bulk of the CHTR stake was purchased in Q1 2012 and Q2 2012. The stock traded between $56.15 and $70.78 during that time. It currently trades at around $69.27. The sector pick is in an uptrend and Soros is trading that trend. The pick is a good option to consider for following Soros although investors will have to wait for better entry points.
General Electric (GE): GE is a 2.5% of the US long portfolio position established last quarter and increased incrementally by around 22% this quarter. The stock traded between $18.15 and $20.84 last quarter when the bulk of the stake was established and it currently trades at around $20.15. The stake build-up indicates a bullish bias.
SPDR Gold ETF (GLD), Market Vectors Gold Miner ETF (GDX), and Market Vectors Junior Gold Miners ETF (GDXJ): Combined, GDX, GDXJ, and GLD account for ~4.5% of the US long portfolio. The stakes in GDX and GLD were increased substantially this quarter while the GDXJ stake was kept steady. The GDX stake was more than doubled this quarter at prices between $40.70 and $54.81 and the stock currently trades at around $46.50. The GLD stake was increased by around 50% at prices between $152.15 and $172.36 and the stock currently trades at around $166. The stake build-up in gold is an interesting trade for Soros as he has said that Gold is the ultimate bubble when it was trading below $1300 in September 2010. The trade becomes easier to digest when considering the fact that Soros is never afraid to play the up-cycle when he sees a bubble.
Motorola Solutions Inc. (MSI): MSI is a ~1.5% of the US long portfolio stake that was increased by around 19% this quarter after having been decreased by around 10% last quarter. The stake increase represents a mild bullish bias.
NetApp Inc. (NTAP): NTAP is a 2% position established last quarter and increased by around 35% this quarter. The stock is very volatile and traded between $28.37 and $45.57 during the period. It currently trades at around $30. The substantial stake build-up indicates a bullish bias. It is trading at the low end of the range Soros acquired the bulk of his stake at. It is a good option to consider for anyone following Soros's trades.
S&P 500 SPDR (SPY) PUTS: SPY puts, a ~1.3% position is his only substantial short position in his 13F portfolio. As of Q1 2012, SPY and QQQ puts together accounted for around 12% of the 13F portfolio. The relatively minor short stance at the moment indicates a clear bullish bias toward US equities.
Suntrust Banks (STI): STI is a ~1.25% position that was increased by around 70% this quarter after reducing it by around 30% last quarter. The original stake was purchased in Q1 2012 at prices between $17.70 and $25 and the stake increase this quarter happened at prices between $22.75 and $29.91. It currently trades at around $26.
Express Scripts (ESRX): ESRX is a ~1.4% position that has been built-up over several quarters starting with a very small stake in Q3 2011. During the period, the stock price has ranged between $35.71 and $64.25 and it trades currently at around $52.
Shutterfly Inc. (SFLY): SFLY is a ~1% position established in Q1 2012 and increased by ~70% last quarter. This quarter, the position was increased by around 25% at prices between $28.68 and $34.18. The stock currently trades below that range at around $26.
Macy's Inc. (M), Apple Inc. (AAPL), DaVita Inc. (DVA), US Airways Group Inc. (LCC): These are very small (<0.5% of the US long portfolio) positions that were increased slightly this quarter. The trading activity does not indicate a clear bias as the position sizes are too small.
Dish Network (DISH): DISH is a ~1.3% position that was decreased by around 10% this quarter. The position was doubled during Q1 2012 and doubled again last quarter. The bulk of that buy activity happened at prices between $26.85 and $33.58. The stock traded between $26.31 and $33.15 this quarter and it currently trades outside that range at $35.55.
Wal-Mart Stores Inc. (WMT): WMT was Soros's largest position in the 13F portfolio as of last quarter and was reduced by ~50% this quarter to a 2% stake at prices between $69.35 and $75.14. The original position was established last quarter at prices between $57.36 and $69.72. The stock had a substantial 30% move this year after flat-lining for over a decade. Soros appears to be expertly trading the trend.
Westport Innovations (WPRT): WPRT was a ~2.5% stake that was reduced to an insignificantly small stake this quarter at prices between $26.37 and $40.16. The bulk of the position was built between Q2 2010 and Q1 2011 at prices between $15.15 and $20.25. The stock currently trades at $25.57. Soros purchased the position by anticipating the uptrend in WPRT (speculation about the adoption of natural gas vehicles), rode it up by following the trend, and exited with handsome profits just as the trend started to reverse - a classic Soros transaction!
EQT Corporation (EQT) and Elan PLC (ELN): These are small positions (less than 1% of US long portfolio) that were reduced substantially this quarter. EQT was a 1.2% position initiated last quarter at prices between $44 and $54.07. It was reduced this quarter by ~25% at prices between $52.99 and $59.25. The stock currently trades just outside that range at around $60. Natural gas related businesses are a volatile area of the market and Soros tends to position himself to profit from trading the cycles. ELN was a ~1% position that was reduced to an insignificantly small position this quarter at prices between $10.70 and $14.46. The stock currently trades just below that range at $10.35. The stake reductions indicate a mild bearish bias.
Exar Corporation (EXAR) and Market Vectors Junior Gold Trust ETF were the only sizable (more than 0.5%) positions that were left untouched during the quarter. The rest of the stocks are very small positions (less than 0.5%) and so the activity does not indicate any clear bias.
Some options activity, although minor is worth a mention: Soros has put options on a couple of home builders - Pulte Group Inc. (PHM) and KB Home (KBH). Also, he has purchased call options on SPDR Metals Mining ETF (XME) and SPDR Materials ETF (XLB). The stakes are very small and so do not indicate a clear bias yet.
The spreadsheet below highlights Soros's significant US long stock positions as of Q3 2012: