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 02/14/2013. 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 Q3 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 decreased this quarter from $9.27B to $8.36B. The number of positions went up slightly from 179 to 181. 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 46% 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 three positions remained untouched during the quarter and six new positions figure among his substantial holdings.
Capital One Financial (COF), JPMorgan Chase (JPM), and Morgan Stanley (MS): COF, JPM, and MS are small (less than 1%) stakes established this quarter. The COF position was established at prices between $54.77 and $61.50 and it currently trades just below that range at $54. JPM position was purchased at prices between $39 and $45 and it trades currently outside that range at $49. MS position was purchased at prices between $16 and $19.50 and it trades currently at $24. Soros anticipated an uptrend in financials and it has worked for him as only COF is trading below his purchase price range.
Anadarko Petroleum (APC), Plains Exploration (PXP), and Citrix Systems (CTXS): These are small stakes established this quarter. With APC and PXP, Soros appears to have successfully anticipated an uptrend in select areas of the energy space. He made several other adjustments to his positions in this area this quarter - Cheniere Energy & Denbury Resources stakes were eliminated, EQT Corp. and Pioneer Natural Resources stakes were increased, and Peabody Energy stake was reduced. The APC position was purchased at prices between $66 and $76 and it currently trades at $82. The PXP stake was purchased at prices between $34 and $47 and it currently trades at $48. CTXS position was established at prices between $57 and $73 and it currently trades at $72.62.
Dish Network (DISH): DISH was a 1.32% position that was disposed of this quarter at prices between $30 and $38. The position was decreased by around 10% last quarter. Soros doubled his stake in Q1 2012 and doubled it again in Q2 2012 at prices between $26.85 and $33.58. The original position was built in Q1 2011 when the share-price ranged between $19.66 and $24.40.
Express Scripts (ESRX): ESRX was a 1.47% position that was built-up over several quarters starting with a very small stake in Q3 2011 at prices between $35.71 and $64.25. The stake elimination this quarter happened at prices between $50 and $66. The stock currently trades at around $56.
LinkedIn Corp. (LNKD) and Amazon.com (AMZN): LNKD was a 1.53% of the US long portfolio stake purchased between $93.51 and $123.23 last quarter and eliminated this quarter at prices between $95 and $122. It will be interesting to see whether Soros got back in to catch the 30% price-spike LNKD experienced this month. AMZN was a 0.7% of the US long portfolio position established last quarter at prices between $215.36 and $261.68 and disposed of this quarter at prices between $220 and $262. Soros has a history of trading AMZN's price-trends and this was another of such foray.
Cheniere Energy (LNG), Denbury Resources (DNR), Target Corporation (TGT), and Tyco International (TYC): These are small stakes (below 1% of the US long portfolio) purchased last quarter and disposed of this quarter.
Acacia Research Corporation (ACTG): ACTG is a 1.22% position that was marginally increased this quarter. The stake was increased by around 20% last quarter and 30% in Q2 2012. 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 $29.50, 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.
Apple Inc. (AAPL): The AAPL stake was more than doubled this quarter to a significant 1.17% stake. APPL is a good trading stock for Soros and the position size has fluctuated for several quarters.
Delta Air Lines (DAL) and EQT Corporation (EQT): These are positions that were increased substantially this quarter. DAL position was increased by ~50% to a 1.36% position this quarter at prices between $9.16 and $12. The stake was acquired last quarter at prices between $8.56 and $11.12. It currently trades outside that range at $14.45. EQT is a 1.46% position that was roughly doubled this quarter at prices between $56 and $63. The original position was established in Q2 2012 at prices between $44 and $54.07. The stock currently trades at around $60. Airlines and Natural are volatile areas of the market and Soros tends to position himself to profit from trading the cycles.
Citigroup Inc. (C) and CALLS: C was a small ~0.5% stake established last quarter and increased to a large 4.46% stake this quarter at prices between $32 and $40. The stock currently trades at $44. It is currently Soros's largest US long portfolio stake. He anticipated the up-trend in financials successfully - C, JPM and MS are trading well above his purchase price range.
Johnson & Johnson (JNJ): JNJ is a 2.17% position that was marginally increased this quarter. The position was established last quarter at prices between $67.21 and $69.53. The stock currently trades well outside that range at around $76.
Pioneer Natural Resources (PXD): PXD is a 2.66% of the US long portfolio position that was increased by around 50% this quarter at prices between $102 and $110. The original stake was established last quarter at prices between $82 and $113. The stock currently trades at $131.
Freeport-McMoRan Copper (FCX): FCX is a small 0.56% position that was increased marginally this quarter. The position was purchased last quarter at prices between $31 and $43 and the stock currently trades at $35. For investors attempting to follow Soros, FCX is a good stock to consider for further research, as it is trading near the low-end of his purchase price-range.
American International Group (AIG): AIG was Soros's largest equity long position in the 13F portfolio as of last quarter but it was reduced by over 40% this quarter to a still substantial 3.74% stake. The stake reduction happened at prices between $30.68 and $37.21. The position was established last quarter at prices between $30.15 and $35.02 and it currently trades at $38.35.
CF Industries (CF): CF stake was reduced by over 40% to a 1.09% position this quarter. It was purchased last quarter at prices between $190.97 and $223.69. The stake reduction happened at prices between $195 and $225. The stock currently trades at $217.
Charter Communications, Inc. (CHTR), Google Inc. (GOOG), Macy's Inc. (M), Manchester United (MANU): These positions were only marginally decreased this quarter and as such do not indicate a clear bias. The bulk of the CHTR stake was purchased in Q1 2012 and Q2 2012 at prices between $56.15 and $70.78 and it currently trades at around $80. GOOG is a good trading stock for Soros and he has previously done several roundtrips on it. The current stake was purchased last quarter at prices between $570.48 and $756.50 and the stock currently trades at around $793. M & MANU are smaller ~0.5% stakes. The original M stake was purchased in Q1 2012 at prices between $35 and $40 and the stock currently trades at $39. MANU stake was purchased last quarter at prices between $12 and $14 and the stock currently trades above $18. Soros is sitting on good gains on CHTR, GOOG, and MANU. It will be interesting to see how he plays them going forward.
Peabody Energy (BTU), General Motors (GM), Suntrust Banks (STI), US Airways Group Inc. (LCC), and Walgreen Company (WAG): These positions were reduced substantially to very small stakes this quarter. BTU and WAG stakes were reduced to minute stakes this quarter. The sizable stake reductions indicate a clear bearish bias toward these companies. GM, STI, and LCC stakes were also reduced by over 50%, over 60%, and over 37% respectively this quarter. Soros is successfully playing the trends in these businesses - the exits happened at higher price-points compared to his cost-basis.
Motorola Solutions Inc. (MSI), Netapp Inc. (NTAP), Wal-Mart Stores Inc. (WMT), General Electric (GE), and S&P 500 SPDR (SPY) PUTS: These are medium-sized (1% to 3%) positions that were reduced substantially this quarter. MSI stake has fluctuated in the last few quarters. NTAP stake was reduced by one-third this quarter after a 35% stake increase last quarter and stake initiation in Q2 2012. WMT position was reduced by 50% to a 1.02% stake this quarter after reducing the stake by the same amount last quarter. It was Soros's largest 13F position as of Q2 2012. WMT has stagnated since making a 30% move in 2012 and Soros is scaling out of that position, after having played the trend successfully. GE position was reduced by more than 50% this quarter in the $20 to $23 price range, slightly above his purchase price range of $18.15 to $20.84 in Q2 2012. SPY PUTS, the only substantial short position was reduced by 10% to a 1.28% position this quarter, a far cry from the 12% short position he had in Q1 2012 (SPY and QQQ puts at that time). The pattern of trades indicates a clear bullish bias toward US equities.
SPDR Gold ETF (GLD), Market Vectors Gold Miner ETF (GDX), and Market Vectors Junior Gold Trust ETF (GDXJ): Combined, GDX, GDXJ, and GLD account for ~2.5% of the US long portfolio, down from ~4.5% as of last quarter. The stakes in all three of these gold related ETFs were reduced substantially, indicating a clear bearish bias toward gold prices. This is an about-turn for Soros as he was aggressively buying these stocks earlier in 2012. That stake build-up was rather unusual as he has said that Gold is the ultimate bubble when it was trading below $1300 in September 2010.
The only other stake reduction among his significant positions was in Exar Corporation (EXAR). It is a longer term holding which was marginally reduced this quarter.
Adecoagro SA (AGRO): AGRO is a fairly large 2.63% of the US long portfolio position that was established prior to its IPO. The stock currently trades at around $8.31, well below the IPO price of $11. The large position indicates a bullish bias.
Shutterfly Inc. (SFLY): SFLY is a 1.09% position established in Q1 2012 and increased by ~70% in Q2 2012. Last quarter, the position was increased by around 25% at prices between $28.68 and $34.18. The stock currently trades well above that range at $42.
Home Depot (HD): HD is a 0.70% stake established last quarter at prices between $50 and $57. The stock currently trades at $67.52.
The spreadsheet below highlights Soros's significant US long stock positions as of Q4 2012: