How Soros's 2011 Transactions Have Worked Out So Far

Includes: AGRO, CVS, MSI, SPY, VC, WFC
by: Zvi Bar

Soros Fund Management LLC is well regarded as one of the most successful and high-profile hedge funds, largely due to its performance and the position of political power that George Soros appears to hold. George Soros' wealth was recently estimated at about $14.2 billion. His fund is ranked as the sixth-largest hedge fund, with approximately $28 billion in assets under management.

Based upon Soros Fund Management's 13F filing for the first quarter of 20011, we now know what transactions the fund made during the first 2 months of the year. This article focuses on those larger purchases and the performance of each versus the S&P 500 ETF (NYSEARCA:SPY).

The Major 13F Transactions at Soros Fund Management

Soros Fund Management entered several new positions in the first quarter of 2011. The largest by far was in Adecoagro S.A. (NYSE:AGRO), an agricultural and farm products company that operates in South America. AGRO had its United States IPO within the first quarter of 2011. Soros' hedge fund owns 27,158,693 shares of AGRO, valued at over $360 million at the time of filing, though down over 10% since then. This is now the hedge fund's largest equity position, but Soros invested in AGRO prior to its IPO, so the price the fund paid is unclear and likely below the IPO value.

Soros' second-largest new equity position is in Visteon Corp. (NYSE:VC), a Michigan-based electronic auto parts supplier. Visteon is another recent IPO, or re-IPO, following its emergence from bankruptcy protection. Soros Fund Management obtained about 2.1 million shares of VC in the first quarter, valued at slightly over $133 million as of March 31. With this position, the fund owns roughly 4% of the company.

Soros' fund also made some dramatic increases to existing equity positions, such as to Motorola Solutions, Inc. (NYSE:MSI), adding over 3.8 million shares of MSI for a total position of 4.48 million shares. Soros Fund Management also dramatically increased its position in Wells Fargo & Co. (NYSE:WFC), buying about 2.9 million more shares, valued at $93.5 million, for a total position of about 3.5 million shares. Additionally, it picked up around 2.6 million shares of CVS Caremark Corporation (NYSE:CVS), valued at about $90.4 million at the end of the quarter, for a total position of about 3.5 million shares.

Performance Comparisons of the Above-Mentioned Companies

Since the start of 2011, most of these companies have remained relatively range bound. The performance of most of these equities has remained under a 10% variation from its price at the start of the year, with WFC and being the sole exception to the downside by falling about 13% since the start of the year. To the upside, MSI considerably outperformed the group by appreciating slightly over 20% over the last six months.
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Over the last three months, WFC and AGRO both underperformed the market by a considerable margin. AGRO was down nearly 10% for the quarter, while WFC was down 13%, just as it was for the 6-month period. AGRO was, at one point, down almost 20%. The best performing equity was CVS, which was up nearly 10% during the last 3 months.

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Over the last month, most of these equities have been range-bound and trading in lock step with the broader market. The primary exception to this is VC, which is up over 5% in June, largely moving up over the last two weeks.

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Soros' positions were considered aggressive for the fund at the time of filing, and indicating that the fund believes in coming business growth and a generally positive economy. Thus far, Soros' timing in investing in WFC appears poor. While AGRO has not perforemed exceptionally well, Soros gets the benefit of the doubt as to purchase price due to his investment in the company when it was private. Otherwise, these investments have performed reasonably in line with the market, with differing names showing significant putperformance during each of the year-to-date, 3-month and 1-month terms.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.