- Soros' 13F portfolio decreased this quarter from $11.77B to $10.12B. The number of positions increased from 237 to 305.
- The large SPY PUTS were reduced by 77% this quarter signifying a shift away from the short side.
- Teva Pharmaceuticals is Soros' largest position at 5.38% of the US long portfolio. Very small positions (less than 0.5% each) are at almost 40% of the 13F portfolio.
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 05/15/2014. 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 2013.
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 $11.77B to $10.12B. The number of positions increased from 237 to 305. Very small stock positions and large debt holdings together account for ~39% of the 13F holdings. 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 few 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.
Consistent with Soros's active trading style, among his larger positions, just four remained untouched during the quarter. Seven of the larger positions that figured in the Q4 2013 report were eliminated this quarter and four new positions were added. To learn about his distinct trading style and philosophy, check out his "The Alchemy of Finance" and other works.New stakes:
Baker Hughes (NYSE:BHI): BHI is a small 0.67% of the US long portfolio stake established this quarter at prices between $52 and $65. The stock currently trades at $69.21. BHI is an actively traded stock for Soros - he had a similarly sized position in Q2 2013 which was disposed of the following quarter.
Devon Energy (NYSE:DVN): DVN is a small 0.50% of the US long portfolio position established this quarter at prices between $58 and $67. The stock currently trades at $72.55.
iShare Russell 2000 ETF (NYSEARCA:IWM) PUTS: The 0.78% of the US long portfolio nominal short position was established this quarter when IWM shares traded between $109 and $120. The ETF currently trades at $109. The activity indicates a mild bearish bias toward US small caps.
The last time Soros had a significantly large short position in IWM through put options was in 2011 - the nominal size of that position peaked at almost 30% of the entire portfolio in Q3 2011 - most of that was liquidated in Q1 2012.
Marvell Technology (NASDAQ:MRVL) PUTS: MRVL Puts are a nominal 0.62% of the US long portfolio position established when the share price varied between $14 and $16. The stock currently trades at $15.27.Stake Disposals:
J C Penney (NYSE:JCP) & Calls: JCP was a 1.08% of the US long portfolio position that was reduced by just over 30% last quarter at prices between $6.42 and $10.19. This quarter, the position was eliminated at prices between $5 and $9. The position was first established in Q2 2013 at prices between $13.93 and $19.39. The stock currently trades at $8.93. Soros lost money on this trade.
Pershing Square (Bill Ackman) established a large (17.7% of the business) activist stake in this name in 2010 at a cost-basis of around $25. But, Ackman resigned from JC Penney board on 8/12/2013 and disposed of his stake at $12.90 later that month. The share price has been in an extended downtrend. Other hedge funds have also taken positions on either side of this trade.
Citigroup (NYSE:C) & JPMorgan Chase (NYSE:JPM): C & JPM were 1.01% and 1.41% of the US long portfolio stakes respectively established last quarter and disposed of this quarter. Soros has traded Citigroup before - in 2009, it was huge 10% position and was eliminated before the year ended.
Alcoa (NYSE:AA) Puts, LyondellBasell Industries (NYSE:LYB), & Red Hat Inc. (RHAT): These were very small (less than ~1% of the US long portfolio) positions that were eliminated this quarter. AA Puts and LYB saw quick turnarounds as the original positions were established just last quarter. The majority of the RHAT position was purchased last quarter as well.Stake Increases:
Herbalife (NYSE:HLF): HLF is a 2.77% of the US long portfolio position purchased in Q2 2013 at prices between $35 and $50. The stake was reduced by 36% last quarter at prices between $61 and $81. This quarter saw a 53% increase at prices between $50 and $82. The stock currently trades at $62.22. Soros appears to be opportunistically trading the volatility in this position.
There is a lot of hedge fund activity with HLF - Pershing Square is short 20M shares while Carl Icahn is long ~17M shares. The company disclosed in March that they are being investigated by the FTC (Civil Investigative Demand - CID).
EQT Corporation (NYSE:EQT): EQT is a 2.47% position that was roughly doubled in Q4 2012 at prices between $56 and $63. In Q1 2013, 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. In Q2 2013, the position was reduced by ~20% at prices between $65 and $84 and Q3 2013 saw another ~24% stake reduction at prices between $79.50 and $92.50. Last quarter saw an about-turn as the position was increased by ~34% at prices between $81 and $91 and this quarter saw a marginal increase. The stock currently trades at $103.
Charter Communications, Inc. (NASDAQ:CHTR): The bulk of the CHTR stake was purchased in Q1 2012 and Q2 2012 at prices between $56.15 and $70.78. In Q1 2013, the position was increased by around 16% and the following quarter the stance reversed as the stake was reduced by ~20%. Q3 2013 saw further selling: ~14% stake reduction at prices between $120 and $136. This quarter saw a ~10% increase at prices between $121 and $139. The stock currently trades at around $139. The current position is at 1.93% of the US long portfolio. Soros is successfully navigating the trend.
Polycom Inc. (NASDAQ:PLCM), Penn Virginia (NYSE:PVA), Motorola Solutions Inc. (NYSE:MSI), Monster Beverage (NASDAQ:MNST), Citrix Systems (NASDAQ:CTXS), Caesars Entertainment (NASDAQ:CZR), Cameco (NYSE:CCJ), YPF SA (NYSE:YPF) and Zoetic (NYSE:ZTS) & Calls: These are small positions (1 to 2% of the US long portfolio) that were increased this quarter. Soros is building stakes anticipating uptrends in these businesses.
Magnum Hunter Resources (NYSE:MHR) & Calls, Loral Space & Commn. (NASDAQ:LORL), Comcast Corporation (NASDAQ:CMCSA), Nice Systems (NASDAQ:NICE), Stryker Corporation (NYSE:SYK), SemGroup (NYSE:SEMG), Tibco Software (NASDAQ:TIBX), Vipshop Holdings (NYSE:VIPS), Walgreen Company (WAG), and Western Refining (NYSE:WNR): These are very small (less than 1% of the US long portfolio) positions that were increased this quarter. The position sizes are still too small to have much of a portfolio impact.Stake Decreases:
Teva Pharmaceuticals (NYSE:TEVA): TEVA is a large 5.38% of the US long portfolio position established in Q3 2013 at prices between $37.50 and $41.50. The position was increased by almost 200% last quarter at prices between $36.59 and $41.70. This quarter saw a 4% trimming at prices between $39.88 and $52.44. The stock currently trades at $49.62. TEVA was in an extended slump due to "patent cliff" concerns and other issues - its ten-year stock performance stood at a depressing 33% as of last quarter. The pattern of trades indicates that Soros was near perfect in anticipating and catching the uptrend with this trade.
General Motors (NYSE:GM) & Calls: GM & Calls were a minutely small position in Q3 2013. It was increased to a fairly significant 2.19% position last quarter at prices between $34 and $42. This quarter, the position was reduced by around 46% at prices between $34 and $41. The stock currently trades at $33.
FedEx Corporation (NYSE:FDX): FDX is a 1.62% of the US long portfolio position established in Q3 2013 at prices between $98 and $117. The stake was decreased by 14% last quarter at prices between $112 and $144. This quarter saw an additional 24% stake reduction at prices between $129 and $144. The stock currently trades at around $137. The stock was in an uptrend and returned ~56% in 2013. The selling pattern indicates a bearish bias.
DISH Network (NASDAQ:DISH) & Calls: DISH was a minute 0.20% of the US long portfolio position as of Q1 2013. In Q2 2013, the stake was increased substantially to a 1.83% position at prices between $36 and $42.50. Last quarter, there was an additional ~45% stake increase at prices between $45 and $58. This quarter saw an about turn as ~26% of the position was sold at prices between $54 and $62. The stock currently trades at $57.53. It now accounts for 1.53% of the US long portfolio. Soros is starting to move on after having played the uptrend successfully.
Google Inc. (NASDAQ:GOOG): GOOG is a good trading stock for Soros and he has previously done several roundtrips on it. The current 1.27% stake was first purchased in Q3 2012 at prices between $285 and $378 (split-adjusted) and was increased by close to 80% in Q1 2013 at prices between $350 and $420. Q2 2013 saw a 17.5% stake increase at prices between $382 and $458. Q3 2013 saw a turnaround, as ~60% of the position was eliminated at prices between $423 and $463 and last quarter saw another 6% trimming at prices between $426 and $561. This quarter, around one-fourth of the remaining shares were sold at prices between $550 and $610. The stock currently trades at around $530. Soros is harvesting gains and continuing to move on.
Energen Corporation (NYSE:EGN): EGN has been in the portfolio since Q1 2013. In Q3 2013, the position was increased by just over 15% to a 1.26% of the US long portfolio position at prices between $52 and $77.50. Last quarter saw another 50% stake increase at prices between $66 and $85. This quarter, ~10% of the position was sold at prices between $66 and $83. The stock currently trades at $84. The stock returned ~55% in 2013 and ~20% YTD.
Liberty Global (NASDAQ:LBTYA) (NASDAQ:LBTYK): Liberty Global is a 1.97% of the US long portfolio position that was increased by ~75% in Q2 2013 as a result of the acquisition of Virgin Media (NASDAQ:VMED) by Liberty Global - Soros held VMED shares that were replaced with Liberty Global shares and cash at an approximate ratio of 2:1 (stock vs. cash). The combined stake was reduced by around one-third in the last three quarters (after accounting for stock-splits).
Microsoft Corporation (NASDAQ:MSFT): MSFT was a fairly large 4.63% of the US long portfolio stake established in Q3 2013 at prices between $31 and $36.50. It was reduced to a small 0.85% of the US long portfolio position last quarter at prices between $33 and $39. This quarter saw further selling as most of the position was sold at prices between $35 and $41. The stock currently trades at $40.
Halliburton Co. (NYSE:HAL): HAL is a 2.09% of the US long portfolio position established in Q3 2013 at prices between $41.50 and $50.50. This quarter, the position was reduced by 14% at prices between $48 and $60. The stock currently trades at $62.88. Soros is starting to harvest gains from this position.
S&P 500 SPDR (NYSEARCA:SPY) PUTS: SPY Puts were increased by over 150% last quarter as SPY price-per-share varied between $165 and $185 - it was Soros's largest 13F position by far at 11.12% of the US long portfolio. This quarter, the position was reduced by ~77% as SPY price-per-share varied between $174 and $188. The nominal value of the remaining position currently stands at 2.96% of the portfolio. A similar pattern of stake build-up and elimination happened in the Q1 to Q3 2013 period as well. The trade this quarter indicates an overall shift in bias away from the short-side.
S&P 500 SPDR Calls: SPY Calls are a very small 0.66% of the US long portfolio position established last quarter. This quarter, around 10% of the position was liquidated. The remaining stake partially offsets the 2.96% SPY Puts position.
Select Section SPDR Energy (NYSEARCA:XLE) Puts: The large 3.38% XLE Puts position established last quarter was reduced to an insignificantly small 0.24% position this quarter. Soros was short Chevron through Puts in Q3 2013 but last quarter that stake was sold and replaced with these Puts. The stake reduction indicates a clear shift away from the short-side.
Pioneer Natural Resources (NYSE:PXD) and Apple Inc. (NASDAQ:AAPL): These positions were reduced significantly this quarter. PXD stake was reduced from 1.89% to 0.18% and AAPL from 1.38% to 0.47% of the US long portfolio. The large stake reductions indicate a bearish bias.
Exar Corporation (NYSE:EXAR), American Tower (NYSE:AMT), Abbvie (NYSE:ABBV), Barrick Gold (NYSE:ABX), Crown Castle (NYSE:CCI), Delta Airlines (NYSE:DAL), Monsanto (NYSE:MON), SBA Communications (NASDAQ:SBAC), and SolarWinds (NYSE:SWI): These are very small positions (less than 1% of the US long portfolio) that were reduced this quarter. As the stakes are too small, they do not indicate a shift in bias.Kept Steady:
Adecoagro S A (NYSE:AGRO): AGRO is a 2.09% of the US long portfolio position that was established prior to its IPO. The stock currently trades at around $9.13, well below the IPO price of $11. The position was marginally increased in Q2 2013 at prices between $6.05 and $7.95. For investors attempting to follow Soros, AGRO is a good option to consider for further research.
Essent Group (NYSE:ESNT) and Leucadia National (NYSE:LUK): These are small (less than ~1.5% of the US long portfolio) positions established last quarter. The stake establishments indicate a mild bullish bias.
Churchill Downs (NASDAQ:CHDN) and Caesars Acquisition (NASDAQ:CACQ): These are very small positions (less than 1% of the US long portfolio) that were kept steady this quarter. The positions are too small to indicate a bias.
The spreadsheet below highlights Soros's significant US long stock positions as of Q1 2014:
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.