4 Of George Soros' Favorite High Growth Stocks

by: Rash Menaria

The following is a list of Soros Fund Management’s top high-growth holdings.



Shares Held - 09/30/2011

Change in shares

Expected topline growth next year

Adecoagro S.A.





Westport Innovations





Amazon.com Inc.





Apple Inc.





Acacia Research Corp.





Mercury Computer Systems





Source:13F filing, Yahoo Finance

*Current Year (ending Sept. FY12) growth rate

I find Adecoagro a good value buy at current prices. Adecoagro is a diversified South American Agribusiness company, with exposure to low cost farming in Argentina, Brazil and Uruguay, and sugar & ethanol in Brazil. The stock is trading at a 47% discount to its NAV, which is at the low end of the historical P/NAV of its peers. One of the main concerns with the stock is a proposed law by the Argentine government regulating foreign ownership of land. If the law is approved as it is, Adeco would face limitations to buy new land in Argentina. However, the limitations only apply to the future, which means the current land portfolio owned by Adeco is not at risk. Further, Adeco's land portfolio still has a significant amount of undeveloped land, implying NAV growth even without buying new land. Trading at 0.53x P/NAV. I believe investors are pricing in the worst case scenario and giving zero value for the Argentine land portfolio, which is not justified. The risk reward profile at this price is skewed to the upside.

Apple also looks good trading at just 9.78x forward earnings despite of ~$80 billion in cash and expected 29% growth in sales in the current year. Given the initial momentum iPhone 4S has seen, I believe Apple can post good December quarter earnings. Apple continues to remain a secular growth and market-share-gain story in the smartphone and tablet space. I would recommend buying the company given its low valuations and several upcoming catalysts over next few quarters, like strong iPhone 4S sell-through, holiday sales, and anticipated iPad 3 and iPhone 5 launches next year.

Acacia Research is another stock I would go long on. Acacia Research Corporation, through its operating subsidiaries, acquires, develops, licenses and enforces patented technologies. Its operating subsidiaries assist patent owners with the prosecution and development of their patent portfolios, the protection of their patented inventions from unauthorized use, the generation of licensing revenue from users of their patented technologies. After the recent Nortel (OTC:NRTLQ) IP portfolio sale, the IP market is seeing increased activity. Acacia is seeing growing levels of interest in partnerships from companies that seek to unlock the value in IP portfolios owned by operating companies. Some evidence of this can be seen in Acacia’s last quarter financial results. Acacia reported $50.6 million of revenue and revenue per deal hit an all time high of $1.7M in Q3, despite not signing a major comprehensive deal in the quarter. Going forward, this increased activity in the market will become more apparent after the next few quarterly results. Acacia is also likely to benefit from its strong position in licensing Access portfolio (original Palm patents) for use in leading mobile operating systems (Apple and Android platforms).

One stock in the above list which I would like to avoid is Amazon. I find Amazon stock pricey. I understand the growth potential and current investment mode of Amazon (which is keeping earnings depressed), but the current price seems to be already pricing in a lot of positives. Also, I don't agree that growth in international markets will come easy for Amazon without any significant competition from local players.

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