This article is part of a series that provides an ongoing analysis of the changes made to George Soros' U.S. stock portfolio on a quarterly basis. It is based on George Soros's regulatory 13F Form filed on 05/15/2013. 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 Q4 2012.
Soros Fund Management invests globally and the long positions in the U.S. market reported in the 13F filings represent only ~25% of the overall portfolio. The 13F portfolio increased this quarter from $8.36B to $8.56B. The number of positions also went up 181 to 209. Very small stock positions and large debt holdings together account for the vast majority of the portfolio holdings. U.S. long stock holdings of significant size (>0.5%) represent about 49% of the 13F portfolio. The U.S. 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 U.S. long equity positions.
Consistent with Soros' active trading style, among his larger positions, just three remained untouched during the quarter. Seven of the larger positions that figured in the Q4 2012 report were eliminated this quarter and ten new positions were added.
Caesers Entertainment (CZR), Constellation Brands (STZ), Liberty Global (LBTYA) (LBTYK): These are small (between 1% and 2% of the U.S. long portfolio) stakes established this quarter. The positions seem consistent with Soros' trend following philosophy as the shorter-term (3-6 month) price-charts for each of these businesses show a clear uptrend.
Brocade Communications (BRCD), Cemex SAB de CV (CX), Energen Corporation (EGN), MeadWestvaco (MWV), Red Hat Inc. (RHT) & CALLS, SPDR Homebuilder (XHB) PUTS, and Virgin Media (VMED): These are very small (between 0.5% and 1% of the U.S. long portfolio) stakes established this quarter. As the position sizes are very small, they do not indicate a clear bias. The small short position in XHB is interesting as Soros is anticipating a correction in homebuilder stocks. Many of those stocks have had stunning returns in the last one year and Soros is positioning to profit from an inevitable price-correction that should follow.
Anadarko Petroleum (APC): The APC position was purchased last quarter at prices between $66 and $76 and disposed of this quarter at prices between $74 and $89. Soros appears to have executed his playbook perfectly as he followed the uptrend and exited before the ~10% price-drop that followed in April.
CF Industries (CF): CF position was exited at prices between $190 and $231. It was reduced by over 40% to a 1.09% position last quarter at prices between $195 and $225. The position was established in Q3 2012 at prices between $190.97 and $223.69. Here again, his acumen exiting positions before the trend reverses is apparent, as the price corrected by 25% in April from the peak reached in Q1 2013.
Capital One Financial (COF), JP Morgan Chase (JPM), Morgan Stanley (MS), & Suntrust Banks (STI): COF, JPM, and MS are small (less than 1%) stakes established last quarter and exited this quarter. The COF position was established at prices between $54.77 and $61.50 and exited at prices between $51 and $63. JPM position was purchased at prices between $39 and $45 and exited at prices between $44 and $51. MS position was purchased at prices between $16 and $19.50 and exited at prices between $19 and $25. STI position was established in Q1 2012 at prices between $18 and $24 and exited at prices between $27 and $30. Soros played the uptrend in financials with these positions and has moved on.
General Electric (GE): GE position was reduced by more than 50% last quarter in the $20 to $23 price range and eliminated this quarter at prices between $21 and $24. The original position was established in Q2 2012 at prices between $18.15 and $20.84.
Charter Communications, Inc. (CHTR), Google Inc. (GOOG), and EQT Corporation (EQT): The bulk of the CHTR stake was purchased in Q1 2012 and Q2 2012 at prices between $56.15 and $70.78. This quarter, the position was increased by around 16%. The stock currently trades well above that range at around $115. GOOG is a good trading stock for Soros and he has previously done several round-trips on it. The current 3.13% stake was first purchased in Q3 2012 at prices between $570.48 and $756.50 and was increased by close to 80% this quarter at prices between $700 and $840. The stock currently trades at around $912. EQT is a 2.44% position that was roughly doubled last quarter at prices between $56 and $63. This quarter, the stake was increased by almost 50% at prices between $57 and $69. The original position was established in Q2 2012 at prices between $44 and $54.07. The stock currently trades at $77. Soros is sitting on good gains on these and believes the uptrend is still in place as is evidenced by the significant stake increases.
Market Vectors Gold Miner ETF (GDX) and Market Vectors Junior Gold Trust ETF (GDXJ): Combined, GDX, GDXJ, and GLD account for ~2.67% of the U.S. long portfolio, up marginally from ~2.5% as of last quarter. GDX and GDXJ stakes were increased substantially this quarter. Soros has said previously that Gold is the ultimate bubble when it was trading below $1300 in September 2010 and so this stake increase is perplexing - Soros may be attempting to profit from the inevitable trend-reversals that happen periodically.
Pioneer Natural Resources (PXD): PXD is a 3.37% of the U.S. long portfolio position that was increased by around 50% last quarter at prices between $102 and $110. It was upped by another 11% this quarter at prices between $106 and $133. The original stake was established in Q3 2012 at prices between $82 and $113. The stock currently trades at $140.
S&P 500 SPDR (SPY) PUTS: SPY PUTS, the only substantially large short position was increased by a whopping 250% to a 4.79% position this quarter at prices between $142 and $157. Despite the huge increase, the position size is nowhere near the 12% short position he had in Q1 2012 (SPY and QQQ puts at that time). Even so, the pattern of trades indicates an increasing bearish bias toward U.S. equities.
U S Airways Group Inc. (LCC): LCC stake was reduced by around 37% last quarter. This quarter saw a turnaround, as the position was doubled to 1.56% at prices between $13 and $17.50. The stock currently trades at around $19.50. Soros continues to play the uptrend in Airlines sector using long positions in LCC and DAL (see below).
Acacia Research Corporation (ACTG): ACTG is a 1.28% position that was marginally reduced this quarter after increasing it marginally last quarter. The stake was increased by around 20% in Q3 2012 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 $23.73, well below the lowest price Soros could have acquired the bulk of the stake at. For those attempting to follow Soros' moves, ACTG is a good position to consider for further research.
American International Group (AIG): AIG was Soros' largest equity long position in the 13F portfolio as of Q3 2012 but it was reduced by over 40% last quarter to a still substantial 3.74% stake. The stake was further reduced by two-thirds this quarter at prices between $35 and $40. The position was established last quarter at prices between $30.15 and $35.02. Soros is moving on after having profitably played the uptrend.
Apple Inc. (AAPL) & CALLS: The AAPL stake was reduced substantially this quarter to a 0.66% stake after having more than doubled the stake in the last quarter. APPL is a good trading stock for Soros and the position size has fluctuated for several quarters.
Citigroup Inc. (C) & CALLS: C stake was reduced to an insignificant 0.28% position this quarter. It was his largest position last quarter at 4.46% - the bulk of that position was purchased at prices between $32 and $40. The stake reduction this quarter happened at prices between $40 and $48. As with COF, JPM, MS, and STI (see above under Stake Disposals), he played the up-trend in financials successfully and is moving on.
Citrix Systems (CTXS): The 0.49% CTXS position was established at prices between $57 and $73 last quarter and reduced by around 38% this quarter at prices between $65 and $75.
Delta Air Lines (DAL): DAL stake was reduced marginally this quarter to a 1.74% position. The stake was acquired in Q3 2012 at prices between $8.56 and $11.12 and increased by around 50% last quarter. The minor stake reduction does not indicate a change in bias - Soros is still playing the uptrend in airlines as is evidenced by his activity in DAL and LCC.
Freeport-McMoRan Copper (FCX): FCX stake was reduced to an insignificantly small 0.15% position this quarter at prices between $31.50 and $36. The position was purchased in Q3 2012 at prices between $31 and $43. The activity indicates a clear bearish bias.
General Motors (GM), Home Depot (HD), Motorola Solutions Inc. (MSI), Netapp Inc. (NTAP), Wal-Mart Stores Inc. (WMT), Shutterfly Inc. (SFLY), and Manchester United PLC (MANU): These positions were reduced substantially this quarter at higher prices compared to his cost basis. Soros is successfully playing the trends in these businesses.
SPDR Gold ETF (GLD): GLD position was trimmed by 10% although other gold positions (GDX and GDXJ) were increased substantially (see above under Stake Increases).
Adecoagro S A (AGRO): AGRO is a fairly large 2.33% of the U.S. long portfolio position that was established prior to its IPO. The stock currently trades at around $7.94, well below the IPO price of $11. The large position size indicates a bullish bias.
Exar Corporation (EXAR) & Macys Inc. (M): These are very small stakes (less than 1% of the U.S. long portfolio) that were kept steady in the quarter. EXAR is a longer term holding that was marginally reduced in Q3 2012 but has been kept steady since. M stake was purchased in Q1 2012 at prices between $35 and $40 and the stock currently trades at around $48. As the position sizes are very small, they do not indicate any clear bias.
The spreadsheet below highlights Soros' significant U.S. long stock positions as of Q1 2013: