10 New Stocks George Soros Is Buying

by: Rash Menaria

The following is a list of top ten new buys by George Soros in the last quarter.



Shares Held - 06/30/2011

Shares Held - 09/30/2011

Medicines Co.




Biogen Idec Inc.




Sandisk Corp.




Sara Lee Corp.




Banco Bradesco S.A.




American Electric Power Co. Inc.








Successfactors Inc.




Pepsico Inc.




Ariad Pharmaceuticals Inc.




Source: 13F Filing

Among above stocks I am bullish on Sandisk, Sara Lee, Sanofi-Aventis and Successfactors. One stock which I am bearish on and would like to avoid is PepsiCo. In addition, I am neutral on The Medicines Company as I see no near term catalyst for the stock.

SanDisk Corporation is engaged in designing, developing and manufacturing data storage solutions in a range of form factors using the flash memory, controller and firmware technologies. I am bullish on the stock in medium term and find risk-reward profile of the company attractive. Market remains disciplined on the supply side while demand acceleration continues in smart phone, tablet and SSD markets. With costs expected to be down ~35% next year there is a good case for SanDisk’s margin expansion. In the near term, SSD sales to the PC market are seeing above average growth due to the shortage in the HDD market following the Thailand flood. This is likely to continue in the near term.

Sara Lee Corp. is a diversified global manufacturer and marketer of consumer products including: Retail, Bakery and Foodservice in North America, and Beverages, Bakery and Household and Body Care in International. Although there are some near term cost headwinds, I am bullish on the stock primarily due to proposed break up next year which will create value for the stockholders.

Sanofi is a global pharmaceutical company headquartered in Paris, France. It has 5 divisions: Pharmaceuticals, Vaccines, Generics, Animal Health and Consumer Health. Sanofi is trading at a discount to its peers at a forward PE of 8.35x and has a dividend yield of ~4%. I believe the company is undervalued and the market is not pricing its 2013 onwards growth outlook driven by new businesses: vaccines, emerging markets, consumer health, animal health, generics.

SuccessFactors is a leading provider of on-demand talent management & Business Execution solutions. The company recently posted strong earnings and increased its 2011 revenue guidance. More recently during a Piper Jaffray TMT conference in New York, management further increased its internal billings guidance citing broad-based strength, including two deals with large European banks, a significant upsell in Brazil and India, and a recovery in Japan. It is very encouraging to see the business showing strength despite of the tough macro-economic environment. The company looks attractive given its strong market position, SaaS offerings, high deal win rates and cross-sell opportunities.

One stock which I would like to avoid is PepsiCo. Slowing growth and market shares losses against its key rival Coca Cola makes Pepsi a perfect short target. There are some expectations that company may announce some cost-cutting and restructuring measures early next year, and hence the stock might be show some strength going into 2012. However, I don’t see any likelihood of the stock outperforming.

It is increasingly becoming clear that we are headed into another recession and in times of slowdowns; announcements have little impact unless accompanied by actual execution. When Coca-Cola faced similar problems in the past, it took it around 5 years of disciplined focus on brand building, innovation, bottler re-investment to improve trends. Clearly, it is not going to be an easy ride for Pepsi either.

I am neutral on The Medicines Company. The Medicines Company is a global pharmaceutical company focused on advancing the treatment of critical care patients through the delivery of medicines to the global hospital marketplace. It has two marketed products: Angiomax (bivalirudin) and Cleviprex (clevidipine butyrate) injectable emulsion, and a range of care hospital products in development, including two late-stage development product candidates, cangrelor and oritavancin. I am neutral on the stock. The company is trading at a forward PE of 16x and I believe it is already pricing in Angiomax sales into mid-2019. Any material upside thus lies in pipeline progress. However, key Phase3 data for Cangrelor and oritavancin are not expected until 2013. Hence I don’t see much upside for the stock in the near term.

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