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Summary

  • Soros's 13F portfolio increased this quarter from $10.12B to $13.27B. The number of positions increased from 305 to 363.
  • The SPY PUTS were increased by six times this quarter, and the short bet is at 16.65% of the 13F portfolio.
  • YPF SA is the largest equity long position, at 3.39%. The large 5.38% Teva position as of last quarter was reduced by 30% this quarter.

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 08/14/2014. 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 Q1 2014.

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 31% this quarter from $10.12B to $13.27B. The number of positions saw a ~20% increase from 305 to 363. Very small stock positions and large debt holdings together account for over 30% of the 13F holdings. The US long investments are diversified, with a large number of very small equity positions, a small number of 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 six remained untouched during the quarter. Four of the larger positions that figured in the Q1 2014 report were eliminated this quarter, and just one new position was added - Consol Energy at 1.77% of the portfolio. To learn about his distinct trading style and philosophy, check out his "The Alchemy of Finance" and other works.

New stakes:

Consol Energy (NYSE:CNX): CNX is 1.77% of the US long portfolio position established this quarter at prices between $39.45 and $47.45. The stock currently trades near the low end of that range, at $39.73.

Stake Disposals:

FedEx Corporation (NYSE:FDX): FDX is 1.62% of the US long portfolio position established in Q3 2013 at prices between $98 and $117. The stake was decreased by 14% in Q4 2013 at prices between $112 and $144. Last quarter saw an additional 24% stake reduction at prices between $129 and $144. This quarter, the position was eliminated at prices between $131 and $151. The stock currently trades at around $150. The stock was in an uptrend and returned ~56% in 2013, compared to just 5.3% so far this year. The disposal indicates a bearish bias.

Monster Beverage (NASDAQ:MNST): MNST was a 1% position that was increased by ~300% last quarter at prices between $66 and $75. It was disposed of this quarter at prices between $63 and $73, and the stock currently trades at $88.49.

Devon Energy (NYSE:DVN): DVN is a small 0.50% of the US long portfolio position established last quarter at prices between $58 and $67. This quarter, the position was eliminated at prices between $67 and $80. The stock currently trades at $73.85.

Marvell Technology (NASDAQ:MRVL) Puts: MRVL Puts were a nominal 0.62% of the US long portfolio position established when the share price varied between $14 and $16. It was disposed of this quarter. The stock currently trades at $13.54.

Stake Increases:

YPF SA (NYSE:YPF): YPF is the largest equity long position, at 3.39% of the US long portfolio. The original position was a small 0.87% stake established in Q3 2013 at prices between $14.80 and $21.57. It has since been consistently bought every quarter at prices between $20 and $36. The stock currently trades at $32.20, and has returned ~90% over the last year.

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 1.26% of the US long portfolio position at prices between $52 and $77.50. Q4 2013 saw another 50% stake increase at prices between $66 and $85. Last quarter, ~10% of the position was sold at prices between $66 and $83. There was marginal buying this quarter. The stock currently trades at $76, and returned ~55% in 2013 and ~9% YTD.

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 in Q4 2013 at prices between $34 and $42. Last quarter, the position was reduced by around 46% at prices between $34 and $41. This quarter, the position was increased by ~15% at prices between $31.93 and $37.09. The stock currently trades at $34.53.

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 in Q4 2013 at prices between $33 and $39. Last quarter saw further selling, as the position was almost eliminated at prices between $35 and $41. This quarter saw an about-turn as the stake was increased by over 400% at prices between $39 and $42. As a percentage of the portfolio, the position is still minute, at 0.70%. The stock currently trades at $44.95.

S&P 500 SPDR (NYSEARCA:SPY) Puts: SPY Puts were increased by over 150% in Q4 2013 as SPY price per share varied between $165 and $185 - it was Soros's largest 13F position by far, at 11.12% (nominal value) of the US long portfolio. Last quarter, the position was reduced by ~77% as SPY price per share varied between $174 and $188. This quarter, the position was built back up again to a whopping 16.65%. A similar pattern of trading happened last year as well. The trade this quarter indicates an overall shift in bias to the short side.

S&P 500 SPDR Calls: SPY Calls are 3.10 % of the US long portfolio position first established in Q4 2013. This quarter, the position was substantially increased. It partially offsets the huge SPY Puts position.

Energy Select Section SPDR (NYSEARCA:XLE) Puts: The large 3.38% XLE Puts position established in Q4 2013 was reduced to an insignificantly small 0.24% position last quarter. This quarter, the position was built back up to 2.04% of the portfolio. The stake increase indicates a shift to the short side.

Apple Inc. (NASDAQ:AAPL): The AAPL position was reduced from 1.38% to 0.47% of the US long portfolio last quarter. It was built back up to 1.28% of the portfolio this quarter at prices between $74 and $94. The stock currently trades at around $100.

Zoetis (NYSE:ZTS) & Polycom Inc. (NASDAQ:PLCM): These are small positions (1 to 2% of the US long portfolio) that were increased marginally this quarter. Soros is building stakes anticipating uptrends in these businesses.

Phillips 66 (NYSE:PSX), Market Vectors Gold Miners ETF (NYSEARCA:GDX), Mack Cali Realty (NYSE:CLI), Level 3 Communications (NYSE:LVLT), Facebook Inc. (NASDAQ:FB), Intel Corporation (NASDAQ:INTC), American Airlines (NASDAQ:AAL), American International Group (NYSE:AIG), Penn Virginia (NYSE:PVA), Caesars Entertainment (NASDAQ:CZR), Loral Space & Communications (NASDAQ:LORL), Nice Systems (NASDAQ:NICE), Stryker Corporation (NYSE:SYK), Tibco Software (NASDAQ:TIBX), 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:

Baker Hughes (NYSE:BHI): BHI is a small 0.67% of the US long portfolio stake established last quarter at prices between $52 and $65. It was reduced by around two-thirds this quarter at prices between $63.37 and $74.63. The stock currently trades at $69.26. BHI is an actively traded stock for Soros - he had a similarly sized position in Q2 2013, which was disposed of in the following quarter.

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. Last quarter saw a ~10% increase at prices between $121 and $139. The pattern reversed again this quarter: a ~19% reduction at prices between $118 and $158. The stock currently trades at around $156. The current position is at 1.54% of the US long portfolio. Soros is successfully navigating the trends.

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. In Q4 2013, there was an additional ~45% stake increase at prices between $45 and $58. Last quarter saw an about-turn as ~26% of the position was sold at prices between $54 and $62, and this quarter saw an additional ~32% reduction at prices between $56 and $66. The stock currently trades at $64.31. It now accounts for 0.83% of the US long portfolio. Soros is starting to move on after having played the uptrend successfully.

EQT Corporation (NYSE:EQT): The original position in EQT was established in Q2 2012 at prices between $44 and $54.07. It was roughly doubled in Q4 2012 at prices between $56 and $63. In Q1 2013, the stake was again increased by 50% at prices between $57 and $69. By Q3 2013, the position was reduced by over one-third at prices between $65 and $93. Q4 2013 saw an about-turn as the position was increased by ~34% at prices between $81 and $91. The pattern reversed again this quarter - one-third reduction at prices between $97 and $110. The stock currently trades at $94.90.

Google Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL): GOOG is a good trading stock for Soros, and he has previously done several roundtrips on it. The current 0.85% 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. Last quarter, around one-fourth of the remaining shares were sold at prices between $550 and $610. This quarter saw a marginal reduction. The stock currently trades at around $584. Soros is harvesting gains and continuing to move on.

Halliburton Co. (NYSE:HAL): HAL is 1.21% of the US long portfolio position established in Q3 2013 at prices between $41.50 and $50.50. Last quarter, the position was reduced by 14% at prices between $48 and $60, and this quarter saw a further 37% stake reduction at prices between $57.36 and $70.37. The stock currently trades at $68.78.

Herbalife (NYSE:HLF): HLF is 2.30% of the US long portfolio position purchased in Q2 2013 at prices between $35 and $50. The stake was reduced by 36% in Q4 2013 at prices between $61 and $81. Last quarter saw a 53% increase at prices between $50 and $82, and this quarter saw a marginal reduction. The stock currently trades at $50.10. 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 it is being investigated by the FTC (Civil Investigative Demand - CID).

iShare Russell 2000 ETF (NYSEARCA:IWM) Puts: The 0.45% of the US long portfolio nominal short position was established last quarter when IWM shares traded between $109 and $120. It was reduced by 26% this quarter. The ETF currently trades at $115.

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.

Liberty Global (NASDAQ:LBTYA) (NASDAQ:LBTYK): Liberty Global is 0.86% 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). It was further reduced by 45% this quarter, indicating a clear bearish bias.

Teva Pharmaceuticals (NYSE:TEVA): TEVA is 2.87% 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% in Q4 2013 at prices between $36.59 and $41.70. This quarter, the position was reduced by 30% at prices between $48.69 and $54.06. The stock currently trades at $53. 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 Q1 2014. Soros was near-perfect in anticipating and catching the uptrend with this trade.

Motorola Solutions Inc. (NYSE:MSI), SolarWinds (NYSE:SWI), SemGroup (NYSE:SEMG), SBA Communications (NASDAQ:SBAC), Monsanto (NYSE:MON), Magnum Hunter Resources (NYSE:MHR) & Calls, Exar Corporation (NYSE:EXAR), Delta Airlines (NYSE:DAL), Comcast Corporation (NASDAQ:CMCSA), Citrix Systems (NASDAQ:CTXS), Barrick Gold (NYSE:ABX), and Cameco (NYSE:CCJ) & Calls: These are very small positions (less than ~1% of the US long portfolio) that were further 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 1.84% of the US long portfolio position that was established prior to its IPO. The stock currently trades at around $9.47, 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.

Vipshop Holdings (NYSE:VIPS), Leucadia National (NYSE:LUK), Essent Group (NYSE:ESNT), Churchill Downs (NASDAQ:CHDN) & Caesars Acquisition (NASDAQ:CACQ): These are very small positions (less than 1% of the US long portfolio) that were kept steady this quarter. The stakes are too small to indicate a bias.

The spreadsheet below highlights Soros's significant US long stock positions as of Q2 2014:

(click to enlarge)

Source: Tracking George Soros' Portfolio - Q2 2014 Update