This article is part of a series that provides an ongoing analysis of the changes made to George Soros' US stock portfolio on a quarterly basis. It is based on George Soros' regulatory 13F Form filed on 08/14/2012. 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 2012.
Soros Fund Management invests globally and the long positions in the US market reported in the 13F filings represent only ~20% of the overall portfolio. The 13F portfolio increased marginally this quarter from $6.84B to $6.92B. The number of positions came down from 201 to 168. Very small stock positions and large debt holdings together account for the vast majority of the portfolio holdings.
US long stock holdings of significant size (>0.5%) represent about 40% of the 13F portfolio. 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 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 US long equity positions.
Soros's active trend-following philosophy is pretty evident from the activity this quarter, as just one of his larger positions was left untouched during the quarter:
Wal-Mart Stores Inc. (WMT): WMT is Soros's largest position in the 13F portfolio. It was initiated this quarter at prices between $57.36 and $69.72. The stock had a substantial 20% move this year after flat-lining for over a decade. Soros appears to be trading the uptrend in this position.
General Electric (GE): GE is a 2.6% of the US long portfolio position established this quarter. The stock traded in a tight $18.15 to $20.84 trading range during the quarter. It currently trades just above that range at around $21. The sizable stake indicates a bullish bias.
NetApp Inc. (NTAP): NTAP is a 2% position established this quarter. The stock had a very volatile quarter trading at prices between $28.61 and $45.57. It currently trades at around $33. The substantial new stake indicates a bullish bias.
EQT Corporation (EQT): EQT is a 1.2% position initiated this quarter at prices between $44 and $54.07. The stock currently trades just outside that range at around $56. Natural gas related businesses are a volatile area of the market and Soros tends to position himself to profit from trading the cycles.
Market Vectors Gold Miner ETF (GDX) and Market Vector Junior Gold Miner ETF (GDXJ): Together, GDX and GDXJ account for about 1.5% of the US long portfolio. Soros also has a significantly large ~2% position in SPDR Gold ETF (SPY). The stake build-up in gold is an interesting trade for Soros as he has said that Gold is the ultimate bubble when it was trading below $1300 in September 2010. The trade becomes easier to digest when considering the fact that Soros is never afraid to play the up-cycle when he sees a bubble.
CVR Energy Inc. (CVI): CVI was a significant 1.5% stake established last quarter at prices between $18 and $30. It was disposed of this quarter at prices between $23.95 and $31.35. The stock currently trades at around $29. Carl Icahn, the majority owner of CVI had plans to sell the company in the $36 per share price range. It did not pan out as no credible offers were received. Icahn became the majority owner of the company with ~82% of the shares outstanding in May 2012, following his tender offer at $30 per share.
Chevron Corporation (CVX): CVX is a ~1.1% stake established last quarter at prices between $102 to $111 price-range. It was disposed of this quarter at prices between $96.49 and $108.30. CVX currently trades at around $112.50.
Interoil Corporation (IOC): IOC was a 1.2% stake that was eliminated this quarter at prices between $50.65 and $72.43. The stake was reduced by over 65% last quarter at prices between $51.41 and $74.73. The stock currently trades at around $78. The significant stake reduction followed by the elimination this quarter of a good-sized position indicates a clear bearish bias. IOC had a price-spike of around 30% in the last 45-days before settling back as Royal Dutch Shell Plc (RDS.A) said it was in talks to buy into IOC's assets in Papua New Guinea (PNG). It will be interesting to see whether Soros participated in that price action.
SPDR Consumer Staples ETF (XLP) and SPDR Healthcare (XLV) PUTS: The short position in XLV and a long position in XLP were established last quarter, but were promptly disposed off this quarter. Both the stakes were small (less than 1%). The XLP position was established at prices between $32 and $34 and was sold at prices between $33.16 and $34.77. The expiry date and the strike price for the XLV put positions are not in the 13F but the XLV ticker traded at prices between $34.69 and $37.50 last quarter and between $35.53 and $38 this quarter.
Tesoro Corporation (TSO): TSO was a small 0.5% of the US long portfolio stake purchased last quarter at prices between $22 and $30. It was disposed of this quarter at prices between $21.25 and $26.80. The stock currently trades at around $39.50. Here again, there was a price-spike this month and it will be interesting to see whether Soros re-entered and participated in the upward momentum.
Medco Health (MHS), Medicines Inc. (MDCO), and Wells Fargo (WFC): These are minute (<0.2% of the US long portfolio) stakes that were disposed of this quarter. They were trimmed drastically last quarter and the activity indicates a bearish bias. These stocks are currently trading near the highs for the year. It looks like Soros played the uptrend successfully with these positions.
Acacia Research Corporation (ACTG): ACTG is a ~2% position that was increased by around 30% this quarter. The original stake was a very small position in the portfolio as of Q4 2011. The bulk of the stake was acquired in Q1 2012 at prices between $35.74 and $43.34. The stock currently trades at $25, well below the lowest price Soros could have acquired the bulk of the stake at. For those attempting to follow Soros's moves, ACTG is a good position to consider for further research.
Charter Communications, Inc. (CHTR) and Dish Network (DISH): These ~2% positions were roughly doubled this quarter. The bulk of the CHTR stake was purchased last quarter before the stake doubling this quarter. The stock traded between $56.15 and $70.78 during this time. It currently trades at around $78. DISH position was doubled during Q1 2012 and doubled again this quarter. The stock traded between $26.85 and $33.58 during this time and it currently trades at $31.79. The sector picks have been in an uptrend and Soros is trading that trend. The picks are good options to consider for following Soros although investors will have to wait for better entry points.
SPDR Gold ETF (GLD): GLD was a very small position in Q4 2011. It was increased by around 275% in Q1 2012 and around 175% in Q2 2012. GLD was trading between $149.46 and $173.49 during the period. It currently trades at around $157. The huge stake increase to a roughly 2% position indicates a clear bullish bias.
Westport Innovations (WPRT): WPRT is a ~2.5% stake that was increased by around 40% this quarter. The position was built between Q2 2010 and Q1 2011 at prices between $15.15 and $20.25. The stock currently trades at around $39. It had a low of around $22 during the quarter. Soros is very bullish on the position as he increased the stake substantially this quarter at much higher prices compared to his cost-basis on the previous purchases.
Elan PLC (ELN), Express Scripts (ESRX), and Shutterfly Inc. (SFLY): These are small positions (~1%) that were increased significantly this quarter. ELN and ESRX were increased last quarter as well and SFLY was a new position established last quarter and increased by ~70% this quarter. Despite the small position sizes, the trading activity indicates Soros is bullish on these businesses. SFLY and ESRX has had strong ~40% moves this year and so investors attempting to follow him will have to wait for better entry points. ELN is trading at around $11.5, just off the lows for the year.
Adecoagro S A (AGRO): AGRO is a fairly large 3.5% of the US long portfolio position that was established prior to its IPO. The position was increased marginally this quarter. The stock currently trades at around $11.5, just above the IPO price of $11. The large position indicates a bullish bias.
S&P 500 SPDR PUTS & Powershares (QQQ) PUTS: The SPY puts were a huge 7.5% stake that was reduced to a less than 2% stake in Q2 2012. Similarly, QQQ puts was a fairly large 4.3% position that was reduced to an insignificantly small stake this quarter. The drastic cuts in the short positions in these market indexes indicate that Soros has become a lot less bearish on the market as of Q2 2012.
Comverse Technology (CMVT): CMVT is a 1.4% position that was reduced marginally this quarter. The original stake was established in Q4 2011 at prices between $6.34 and $7. The stock currently trades below that range at around $6.10. For investors attempting follow Soros, CMVT is a good option to consider - despite the stake decrease, Soros still holds a significant stake and his cost-basis on the bulk of the holdings is higher than the current market price.
Motorola Solutions Inc. (MSI): MSI is a ~2% of the US long portfolio stake that was reduced by around 10% this quarter. The stake is being decreased consistently over several quarters and the trading activity indicates a clear bearish bias.
Suntrust Banks (STI): STI was reduced by around 30% to a less than 1% position this quarter. The stake was purchased last quarter at prices between $17.70 and $25. STI currently trades outside that range at around $25.50.
Macys Inc. (M): M was reduced by almost 50% this quarter to a very small stake of less than 0.5%. The position was established last quarter at prices between $32 and $41 and it trades currently at around $39. The stake reduction indicates a mild bearish bias.
Apple Inc. (AAPL), DaVita Inc. (DVA), Extreme Networks (EXTR), iShares Russell 2000 (IWM) PUTS, Mercury Computer (MRCY): These are very small (<0.5% of the US long portfolio) positions that were trimmed this quarter. The trading activity does not indicate a clear bias as the position sizes are too small.
Exar Corporation (EXAR) was the only sizable (more than 0.5%) position that was left untouched during the quarter. The number of shares he holds in EXAR continues to raise some eyebrows - 6,666,666 - good fodder for conspiracy theorists. The spreadsheet below highlights Soros's significant US long stock positions as of Q1 2012: