We admire investing guru George Soros and his team of analysts. Below are 5 of our favorite stocks in his portfolio.
Altria Group (MO): Soros owns 9,500 shares of Altria. It is a new buy for the latest full quarter in 2010. Altria, which produces and sells popular tobacco products such as Marlboro and Parliament cigarettes, Copenhagen and Skoal smokeless tobacco and more, offers a 6.10% dividend yield and has a market cap of just over $50B. The company has an impressive 84% ROE over the last 12 months and despite being a tobacco company, recently ranked 35th on a list of the 100 Best Corporate Citizens by Corporate Responsibility magazine.
Petroleo Brasileiro (PBR): This massive Brazilian producer has been boosted recently by the major discovery of reserves off the Brazilian coast. This type of extraction is more costly than traditional extraction, so, as prices for oil rise, the justification and margin on this type of extraction grows. Libyan instability leads to a spike in oil prices, which leads to increased value of PetroBras’ reserves. That said, this type of extraction is also known for its long-term nature. That means that investors are aware that the benefits of the reserves will be elongated over a period of time so momentary shakes to the oil market can have less of an effect on the stock. This is a double-edged sword.
Ford (F): EPS for 2011 is forecast at 113% with a five-year projection of nearly 13%. Broad trends suggest that Ford is stealthily improving its position in the competitive landscape: A consolidation of brands, a gain in market share over the past year and the shedding of debt. On this last point, it was just announced that Ford will redeem, in cash, all 6.50% convertible trust preferred securities, effectively taking $3 billion in debt off its books and reducing total debt to $16 billion. As earnings announcements loom, these dual events could act as a catalyst to bring Ford's stock price nearer to fair value. We use an 11% discount rate for the company.
Wal-Mart (WMT): While present in Japan, it is far from its most crucial market and in the view of a Moody’s analyst, it won’t a have material impact on the company’s operations. Currently trading at $52.77/share, it hasn’t deviated by more than 2% from this price in the past 20 days. Its forward P/E of 11.8 lends itself to the view that it should climb higher to reach fair value in the $60/share range.
Apple (AAPL): We use a 10% discount rate for the company and peg fair value at $450 per share. Net sales of iPhone and related products and services were $25.2 billion in 2010 representing an increase of $12.1 billion, or 93%, compared with 2009. Net sales of iPhone and related products and services accounted for 39% of the Company’s total net sales for the year. iPhone unit sales totaled 40 million in 2010, which represents an increase of 19.3 million, or 93%, compared with 2009. Net sales of iPad and related products and services were $5.0 billion and unit sales of iPad were 7.5 million during 2010. iPad was released in the US in April 2010, and in various other countries over the remainder of 2010.