Dissecting George Soros' Recent Moves, Part 4: Stake Reductions And Liquidations

by: Zvi Bar

This is part four of a series on the investment changes made by George Soros' Soros Fund Management during the third quarter of 2012. In part 1, I studied the new additions to Soros Fund that were valued at over $100 million. Part 2 examined the smaller additions made by George Soros' hedge fund. Part 3 reviewed the positions that the hedge fund increased during the third quarter. Here, I review the stake liquidations and decreases made by Soros Fund Management during the third quarter of 2012.

Liquidated Stakes

Soros Fund Management liquidated its position in Clorox Company (NYSE:CLX) during the third quarter. The hedge fund traded the name. It acquired 675,692 shares in the second quarter of 2012, valued at about $50 million. Shares of CLX moved up in June and then spent most of the third quarter in a tight trading range. It is likely that Soros made money off of the trade, so long as the purchase was made some time before the second half of June. In addition to the possible share appreciation received by the trade, the hedge fund may have received one or two of the quarterly dividend payments made by CLX. See a recent performance chart for CLX:

Soros' hedge fund also sold out of Comverse Technology (NASDAQ:CMVT) during the third quarter. Soros Fund Management initiated its position in CMVT in Q4 of 2011. The hedge fund sold some of its initial position in Q2 of 2012, but entered Q3 with 15,778,666 shares, worth about $92 million at the start of Q3. It appears likely that the fund lost money on the trade, but not necessarily, as CMVT traded in a fairly tight range over the last year, up until the start of November, when it spun off Comverse Inc. (CNSI). See a recent performance chart for CMVT:

Soros Fund Management also eliminated its position in PepsiCo Inc. (NYSE:PEP) during Q3. The hedge fund initiated the 892,500-share position in the second quarter of 2012, and it entered the third quarter with a value of about $63 million. Shares of the PepsiCo were in an upward trading range throughout most of the second and third quarters of 2012, but began to decline in late August and continued to decline into the middle of November. Given this recent performance, it appears likely that Soros made some profit off of the position, but this is not certain. See a recent performance chart for PEP:

Decreased Stakes

Soros Fund Management decreased its position in Dish Network (NASDAQ:DISH), but not substantially. The hedge fund entered Q3 with 4,440,251 shares of DISH, worth about $127 million, and exited Q3 with 3,988,857 shares, worth about $122 million. The hedge fund had accumulated DISH in each of the first two quarters of the year. DISH ended up declining throughout most of Q2 and appreciating throughout most of Q3, so the hedge fund is likely happy it maintained the majority of its position. See a recent performance chart for DISH:

Soros' hedge fund nearly sold out of Elan (NYSE:ELN) during the third quarter. Soros Fund Management entered the third quarter with 4,583,900 shares of the drug research company, worth about $67 million, and ended the quarter with 1.25 million shares, worth about $13.5 million at the end of Q3. Soros had added shares to an already existing position during Q2. The company declined significantly in July and has since continued to trend lower on news that its experimental Alzheimer's drug had a two clinical trial failures. See a recent performance chart for ELN:

Soros' hedge fund reduced its position in EQT Corporation (NYSE:EQT) by about a quarter during Q3. The hedge fund entered the third quarter with 1,519,364 shares in the gas utility, worth about $82 million, all of which it acquired in the second quarter of this year. At the end of the third quarter, Soros Fund Management recorded having 1,121,336 shares of EQT, worth about $66 million. Shares of EQT have been in an uptrend since the start of June that is still continuing, resulting in appreciation of over one third since the start of Q3. The hedge fund likely recorded a profit on the shares it sold and is certainly up on those it kept. See a recent performance chart for EQT:

Soros Fund Management substantially decreased its significant position in Wal-Mart Stores Inc. (NYSE:WMT) during the third quarter, but the position was so large that the half that remains was still worth about $186 million at the end of the quarter. Soros entered Q3 with 4,831,800 shares of WMT, worth about $337 million, and it was the hedge fund's largest U.S. traded equity position at the halfway mark of 2012. The hedge fund actually initiated that substantial position during Q2 of 2012. Wal-Mart had been somewhat range bound for years, but broke out at the end of the second quarter. The mega-cap retailer ended up appreciating by about one-third between mid May and August. Given Soros' fondness for riding trends, it is likely that the hedge fund initiated the position after it began to break out in late May or June. Shares have given back some of those gains in the fourth quarter. See a recent performance chart for WMT:

Soros Fund Management sold almost all of its position in Westport Innovations (NASDAQ:WPRT). The hedge fund had been accumulating shares in WPRT for years, including adding shares in Q2 of 2012, but sold almost 95 percent of the $152 million position it had at the start of Q3. It exited the quarter with 249,048 shares, worth almost $7 million. Westport had been in an uptrend from Q2 of 2009 though Q2 of 2012, but ended up losing about 40 percent of its value through the last six months. The fund must have seen the end of this trend starting and exited the majority of the investment. See a recent performance chart for WPRT:

If Westport ends up strongly appreciating off of the apparent double bottom it recently formed, it would not be surprising to see the fund again accumulate shares.

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.

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