Tracking George Soros' Portfolio - Q1 2016 Update

|
Includes: AAL, ABEO, ABX, AGN, AGRO, ALLE, ALLY, AMZN, AVGO, BABA, BUD, CACQ, CCI, CHDN, CHTR, CIT, CY, CZR, DAL, DISH, DVMT, DWDP, EBAY, EGN, ENDP, EQIX, EQT, ESNT, EXA, EXAR, FB, FCAU, GE, GLD, GLPI, GOOG, GOOGL, HERO, HYG, IMOS, IWM, JD, LGF.A, LILA, LILAK, LORL, LVLT, LYB, MCD, MDLZ, MODN, MPC, MSI, MXL, PFE, PLCM, PYPL, QQQ, QUNR, RACE, ROVI, SHPG, SLB, SPY, SYF, TRP, TVPT, TWX, VIAV, WUBA, XLI, XOP, YPF, YUM, ZTS
by: John Vincent

Summary

Soros' 13F portfolio decreased from $6.05B to $4.53B this quarter. The number of positions decreased from 244 to 226.

A large new position in Barrick Gold was established during the quarter while eliminating Dow Chemical and Level 3 and reducing Synchrony Financial.

Puts on S&P 500 SPDR and iShares Russell 2000 ETFs were both increased during the quarter.

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 05/16/2016. Please visit our Tracking Soros Fund Management Holdings article for an idea on his investment philosophy and our previous update for the fund's moves during Q4 2015.

Soros Fund Management invests globally and the long positions in the US market reported in the 13F filings represent ~15% of the overall portfolio. The 13F portfolio decreased ~25% this quarter from $6.05B to $4.53B. The number of positions decreased from 244 to 226. Very small stock positions and large debt holdings together account for over 37% of the 13F holdings. The US long investments are diversified with a large number of very small equity positions, a small number of large equity positions, and a few large debt holdings. As the small positions (<0.5%) do not indicate a clear bias, the focus of this article is on the larger positions. The top-three individual stock positions are Barrick Gold, Adecoagro SA, and Zoetis.

To learn about Soros' distinct trading style and philosophy, check out his "The Alchemy of Finance" and other works.

New stakes:

Barrick Gold (NYSE:ABX) & SPDR Gold Trust ETF (NYSEARCA:GLD) Calls: These two are large positions established this quarter. The ABX stake is the largest individual stock position in the 13F at 5.82% of the portfolio. It was purchased at prices between $7.38 and $15.18 and the stock is now at $17.63. The 2.73% GLD Calls stake was established as the underlying traded between $101 and $122 during the quarter. GLD currently trades at $120.

Note: ABX and the Gold ETFs have seen several roundtrips in the portfolio over the years although the positions were sized modestly. The last time there was a sizable stake in gold stocks was in Q3 2012 when the allocation was close to 5% of the portfolio. The current allocation is even larger at 8.55%.

Select Sector SPDR Inds. (NYSEARCA:XLI) Calls: XLI Calls is a fairly large 3.67% portfolio position purchased this quarter when the underlying traded between $48 and $56. It currently goes for $55.27.

Baxalta Inc. (BXLT), Crown Castle Intl. (NYSE:CCI), Schlumberger Ltd. (NYSE:SLB), and Time Warner Inc. (NYSE:TWX) Puts: These are very small (less than ~1% of the portfolio each) stakes established this quarter.

Stake Disposals:

Alibaba Group (NYSE:BABA): BABA was Soros' largest 13F individual stock position at ~3.64% as of Q1 2015. It was established in Q3 2014 at prices between $87 and $94. In Q2 2015, the position was almost sold out at prices between $79.54 and $93.88. In Q3 2015, the pattern reversed again: significant increase to a ~0.9% portfolio stake at prices between $57.39 and $84.15. The elimination this quarter was at prices between $60.57 and $81.27. The stock currently trades at $78.98.

Delta Air Lines (NYSE:DAL): DAL had seen several successful roundtrips in the portfolio. The majority of the current 1.66% stake was established in H2 2015 at prices between $40 and $52. The position was sold out this quarter at prices between $40.77 and $50.69. The stock currently trades at $43.86.

Dow Chemical (DOW): DOW was first purchased in Q2 2014 and a large increased happened the following two quarters at prices between $42.71 and $54.80. In Q3 2015, there was a further ~23% increase at prices between $39.39 and $53.04. Last quarter saw an about turn: ~25% reduction at prices between $42.40 and $56.97. The elimination this quarter was at prices between $41.32 and $51.66. The stock currently trades at $50.81.

Note: Dan Loeb (Third Point) established a huge activist stake in Dow Chemical in Q4 2013 at around the mid-40s price-range. In December 2015, Dow and DuPont (DD) announced a merger of equals with plans to separate into three businesses after the merger.

Energen Corporation (NYSE:EGN): EGN has been in the portfolio since Q1 2013. Q4 2013 saw a ~50% increase at prices between $66 and $85. Q1 2015 saw an about turn: ~37% reduction at prices between $59.05 and $70.54 and the remaining position was almost sold out in Q2 2015 at prices between $66 and $76. Q3 2015 saw a huge ~470% increase at prices between $44.17 and $68.30. The pattern reversed again last quarter: ~85% reduction at prices between $40.45 and $61.57 and the remainder stake was sold this quarter. The stock is now at $44.60.

Level 3 Communications (NASDAQ:LVLT): Most of the original LVLT stake was purchased in Q2 & Q3 2014 at prices between $36.37 and $47.50. Q4 2014 saw a ~28% reduction at prices between $38.05 and $50 and the following quarter saw a further ~11% reduction at prices between $47.02 and $55.46. Q2 2015 saw further selling: ~40% reduction at prices between $52 and $57. Last quarter saw a ~60% increase at prices between $43 and $55. The elimination this quarter was at prices between $42.74 and $54.36. The stock is now at $51.93.

YPF SA (NYSE:YPF): YPF was a fairly large 2.33% of the US long portfolio stake as of Q3 2015. The position was almost sold out last quarter at prices between $15 and $22 and the minutely small remaining position was sold this quarter. The original stake was a small 0.87% stake established in Q3 2013 at prices between $14.80 and $21.57. It had since been consistently bought every quarter thru Q3 2014 at prices between $20 and $36. The stock currently trades at $20.89.

Ally Financial (NYSE:ALLY), Qunar Cayman (NASDAQ:QUNR), and Rovi Corporation (NASDAQ:ROVI): These are very small (less than ~1% of the US long portfolio each) positions reduced last quarter and eliminated this quarter.

Anheuser Busch Inbev (NYSE:BUD), McDonald's (NYSE:MCD), and S&P SPDR Oil & Gas ETF (NYSEARCA:XOP): These small (less than ~1% of the portfolio each) stakes were increased last quarter but sold out this quarter.

Columbia Pipeline Group (CPGX), iShares iBoxx High Yield (NYSEARCA:HYG), Marathon Petroleum (NYSE:MPC), Pfizer Inc. (NYSE:PFE), and Powershares QQQ (NASDAQ:QQQ) Puts: These are small (less than ~1% of the portfolio each) positions established last quarter but eliminated this quarter.

Yum Brands (NYSE:YUM): The very small 0.79% YUM stake was sold out this quarter.

Stake Increases:

eBay Inc. (NASDAQ:EBAY): EBAY is a 1.95% portfolio stake. The bulk of the buying happened in Q1 & Q3 2015 at prices between $22.32 and $28.75. Last quarter saw a ~36% reduction at prices between $24 and $29.59 while this quarter saw a ~8% increase. The stock currently trades at $23.69.

Note: The prices quoted above are adjusted for the spinoff of PayPal from eBay.

S&P 500 SPDR (NYSEARCA:SPY) Calls & Puts: The SPY position has wavered over the years. Recent activity follows: In Q1 2015 the Puts were a large ~11% portfolio stake. The following quarter saw a reversal: The Puts stake was reduced while adding a huge position in the Calls. Q3 2015 saw a reduction in both the positions. The net was a very small ~1.46% position in the Puts. Last quarter, the calls were sold while the puts were increased significantly. This quarter saw a stake doubling in the puts. SPY Puts is now a huge stake at 9.52% of the portfolio.

Note: The activity in SPY on its own does not indicate a clear bias as Soros is known to use this ETF to hedge other parts of his portfolio.

Caesars Acquisition (NASDAQ:CACQ), EMC Corporation (EMC), Equinix Inc. (NASDAQ:EQIX), Gaming & Leisure Properties (NASDAQ:GLPI), iShares Russell 2000 ETF (NYSEARCA:IWM) Puts, and JD.com (NASDAQ:JD): These are small (less than ~1% of the portfolio each) stakes increased this quarter.

Stake Decreases:

Allergan plc (NYSE:AGN) previously Actavis plc: AGN was Soros' second-largest individual stock position at 3.18% of the 13F portfolio as of Q3 2015. The stake saw a huge ~390% increase that quarter at prices between $252 and $340. Last quarter saw a ~46% reduction at prices between $253 and $323 and that was followed with a ~53% reduction this quarter at prices between $266 and $313. The stock currently trades at $229.

Note: In November 2015, Pfizer Inc. announced the acquisition of Allergan plc in a deal valued at $160B. The new business was to be domiciled in Ireland - tax inversion deal structure. Pfizer called off the merger last month in response to government pressure.

American Airlines (NASDAQ:AAL): The original very small position was increased by over 300% in Q2 & Q3 2014 at prices between $33 and $45. Q4 2014 saw an about-turn as the position was reduced by ~53% at prices between $28.58 and $53.63. The pattern continued the following two quarters with another ~70% reduction at prices between $39.48 and $55.76. In Q3 2015, there was a ~50% increase at prices between $37.50 and $44 while this quarter saw a ~40% reduction at prices between $35.55 and $43.47. The stock currently trades at $32.61 and the remaining stake is at ~1%.

Adecoagro S A (NYSE:AGRO): AGRO was the largest individual stock position at 5.27% of the US long portfolio as of last quarter. It was reduced by ~46% this quarter at prices between $11.03 and $13.23. The original stake is from prior to its IPO. The stock currently trades at around $10.41 compared to the IPO price of $11.

Cypress Semiconductor (NASDAQ:CY) & Calls: CY was a fairly large 2.66% of the portfolio position last quarter. It was almost sold out this quarter at prices between $6.39 and $9.81. The original stake saw a ~400% increase in Q1 2015 and another ~19% increase in Q2 2015. Q3 2015 also saw a ~18% increase at prices between $8.28 and $12.15. The stock currently trades at $9.44.

Note: The vast majority of the 400% increase in Q1 2015 was due to the acquisition of Spansion by Cypress that closed in March 2015 - Spansion shareholders received Cypress stock in the ratio 1:2.457. Soros had a 3.55M share position in Spansion.

DISH Network (NASDAQ:DISH) & Calls: DISH was a minute 0.20% of the US long portfolio position as of Q1 2013. In Q2 2013, the stake was increased substantially at prices between $36 and $42.50. This quarter saw an almost two-thirds reduction at prices between $39.71 and $57.35. The stock is now at $44.90 and the stake is at 0.47%.

EQT Corporation (NYSE:EQT): The original position in EQT was established in Q2 2012 at prices between $44 and $54. In Q3 2014, there was a ~19% increase at prices between $91 and $107 and the following quarter saw an additional 44% increase at prices between $75 and $100. Q1 2015 saw a ~37% reduction at prices between $73 and $83 and the following quarter saw a further ~58% reduction at prices between $81 and $92. In Q3 2015, the remaining 0.58% portfolio stake was almost sold out at prices between $65 and $81. The pattern reversed last quarter: ~14-times increase to a 1.25% stake at prices between $48 and $77. The stake was sold down by ~83% this quarter at prices between $50 and $67. The stock currently trades at $70.29.

Endo International plc (NASDAQ:ENDP): ENDP was a fairly large 2.19% of the portfolio position as of last quarter. It was almost eliminated this quarter at prices between $28 and $61. The original position is from Q4 2014 at prices between $60.19 and $73.37. The stock currently trades at $15.57.

Facebook Inc. (NASDAQ:FB): FB was a minutely small ~0.10% portfolio stake as of Q1 2015. It was increased to a fairly large 2.07% of the portfolio position in Q2 2015 at prices between $77.46 and $88.86. Q3 2015 saw a ~30% reduction at prices between $82.09 and $98.39 and that was followed with a ~55% reduction last quarter at prices between $90 and $109. This quarter saw a further ~46% reduction at prices between $94 and $116. The stock currently trades at $118 and the stake is at 1.11% of the portfolio.

Note: FB had a previous presence in the portfolio: Around ~1.8M shares were purchased in Q2 2014 at prices between $56 and $65. Most of it was disposed of the following quarter at prices between $66 and $79.

LyondellBasell Industries (NYSE:LYB): LYB was a 1.25% of the US long portfolio stake as of last quarter. The position had seen a ~380% increase that quarter at prices between $83 and $98. It was almost sold out this quarter at prices between $72.34 and $88.60. The original stake was established in Q4 2014 at prices between $70.61 and $109. The stock is now at $81.62.

PayPal Holdings (NASDAQ:PYPL): PYPL is a 1.17% of the portfolio position established in Q3 2015 as a result of the spinoff of PayPal from eBay. eBay shareholders received one share of PayPal for each share held. Last quarter saw a one-third reduction at prices between $31 and $38 and that was followed with another ~54% reduction this quarter at prices between $31.20 and $41.32. PYPL currently trades at $39.98.

Polycom Inc. (NASDAQ:PLCM): The bulk of the 2.01% PLCM stake is from Q4 2013 and Q1 2014 at a cost-basis of around $11.50. Last quarter saw a ~18% reduction at prices between $10.42 and $14.04. The stock currently trades at $11.22. Soros has a ~6% ownership stake in the business. This quarter saw minor trimming.

Synchrony Financial (NYSE:SYF): SYF was a large (top-three) 3.58% of the US long portfolio stake established last quarter at prices between $29.51 and $34. It was sold down by ~95% this quarter at prices between $24.48 and $30.41. The stock currently trades at $30.11.

Note: The spinoff of General Electric's (NYSE:GE) credit arm started trading in August 2014 and has returned ~31% since.

Time Warner Cable (TWC): TWC is a ~1.46% of the US long portfolio position. It was established in Q2 2015 at prices between $149 and $184 and reduced by ~50% the following quarter at prices between $174 and $193. Last quarter saw another ~43% reduction at prices between $179 and $192 and that was followed with a ~19% reduction this quarter at prices between $176 and $206.

Note: Charter Communications (NASDAQ:CHTR) acquired TWC in a cash-and-stock deal that closed yesterday.

Zoetis (NYSE:ZTS): ZTS is a 2.27% of the US long portfolio stake. The bulk of the position is from Q4 2013 and Q1 2014 when the position was increased by ~160% at an average price of ~$32. Q2 2015 saw a one-third reduction at prices between $44 and $55 while the following quarter saw a ~28% increase at prices between $39.65 and $50.02. This quarter saw a ~31% reduction at prices between $39.33 and $48.01. The stock currently trades at $46.96.

Broadcom Limited (NASDAQ:AVGO), Kraft-Heinz (HNZ), and Travelport Worldwide (NYSE:TVPT): These very small (less than ~1% of the portfolio each) positions were kept steady last quarter but reduced this quarter.

Allegion PLC (NYSE:ALLE), 58.com ADR (NYSE:WUBA), Lions Gate Entertainment (LGF) & Calls, Mondelez Intl. (NASDAQ:MDLZ), Motorola Solutions Inc. (NYSE:MSI), and Viavi Solutions (NASDAQ:VIAV): These are very small (less than ~1% of the US long portfolio each) positions reduced over the last two quarters.

Amazon.com (NASDAQ:AMZN), Liberty Global Lilac (NASDAQ:LILA) (NASDAQ:LILAK), and Loral Space & Communications (NASDAQ:LORL): These are small (less than ~1% of the portfolio each) stakes increased last quarter but reduced this quarter.

Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL): GOOG is a minutely small 0.11% of the portfolio stake. It was established last quarter and almost eliminated this quarter. Google is a good trading stock for Soros and it has seen numerous successful roundtrips.

Kept Steady:

CIT Group Inc. (NYSE:CIT): CIT is a 0.96% of the US long portfolio stake. It was purchased in Q3 2015 at prices between $39.61 and $48.51 and decreased by ~50% last quarter at prices between $39.70 and $46.14. The stock currently trades at $32.67.

Essent Group (NYSE:ESNT): Soros had a stake in Essent Group prior to its October 2013 IPO at ~$22.50 per share. Q4 2013 regulatory filings showed him owning ~7.5M shares. Since Q4 2014, the stake had seen selling and it is now at ~1.5M shares. The selling was at prices between $21 and $29. The stock currently trades at $20.09.

Caesars Entertainment (NASDAQ:CZR), ChipMos Tech. (NASDAQ:IMOS), and Churchill Downs (NASDAQ:CHDN): These very small (less than ~1% of the portfolio each) positions were kept steady during the quarter.

Ferrari N V (NYSE:RACE): Ferrari NV is a Fiat Chrysler (NYSE:FCAU) spin-off that started trading in January. A small 0.78% position was established last quarter and kept steady this quarter. The stock is now at $41.84.

Although the relative sizes are very small, it is significant that Soros has significant ownership stakes in the following businesses: Model N (NYSE:MODN), MaxLinear (NYSE:MXL), Exar Corporation (NASDAQ:EXAR), EXA Corp. (NASDAQ:EXA), Abeona Therapeutics (NASDAQ:ABEO), and Hercules Offshore (NASDAQ:HERO).

The spreadsheet below highlights Soros' significant US long stock positions as of Q1 2016:

Disclosure: I am/we are long DOW, EBAY, PYPL.

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.

Editor's Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.