Tracking George Soros's Portfolio - Q4 2016 Update

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Includes: ABEO, ABX, AGRO, ALLT, AMAT, AMZN, ARNI, BAC, CACQ, CHDN, CRC, CVS, CZR, DXJ, EBAY, EEM, EXA, EXFO, FB, FXI, GS, GSUM, HPE, IMOS, INTC, IWM, KEG, KSS, LAMR, LBRDK, LILA, LILAK, MDLZ, MGM, MODN, NFLX, ORCL, PYPL, QTM, SIGM, SPY, SUPV, TIVO, TMUS, TVPT, TWX, UNIT, URI, VMW, WMB, WUBA, XLF, ZTS
by: John Vincent

Summary

Soros' 13F portfolio increased from $4B to $4.32B this quarter. The number of positions decreased from 224 to 207.

They added Facebook and Key Energy Services while dropping Barrick Gold, MGM Resorts Puts and CVS Health Calls.

A fairly large stake in iShares Russell 2000 ETF Puts was added this quarter while reducing the Puts on S&P 500 SPDR ETF.

This article is part of a series that provides an ongoing analysis of the changes made to George Soros's US stock portfolio on a quarterly basis. It is based on George Soros's regulatory 13F Form filed on 02/14/2017. 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 Q3 2016.

Soros Fund Management invests globally and the long positions in the US market reported in the 13F filings represent ~13% of the overall portfolio. The 13F portfolio increased ~9% this quarter from $4B to $4.32B. The number of positions decreased from 224 to 207. Very small stock positions and large debt holdings together account for over ~43% 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 equity positions. The top three individual stocks held are Liberty Broadband (NASDAQ:LBRDK), Adecoagro (NYSE:AGRO) and TiVo Corporation (NASDAQ:TIVO).

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

New stakes:

Facebook Inc. (NASDAQ:FB) & Calls: FB is a 1.80% of the portfolio stake established this quarter at prices between $115 and $133 and the stock is now at $134.

Note: FB is a good trading stock for Soros and has seen several previous roundtrips. The most recent trading pattern follow: FB was a minutely small ~0.10% portfolio stake as of Q1 2015. It was increased to a fairly large ~2% of the portfolio position in Q2 2015 at prices between $77.50 and $89. Q3 2015 saw a ~30% reduction at prices between $82 and $98.50 and that was followed by a ~55% reduction the following quarter at prices between $90 and $109. Q1 2016 saw a further ~46% reduction at prices between $94 and $116 and the elimination the following quarter was at prices between $109 and $121.

iShares Russell 2000 (NYSEARCA:IWM) PUTS, Industrial SPDR (NYSEARCA:XLF) PUTS, and iShares MSCI Emerging Market ETF (NYSEARCA:EEM) PUTS: These new short stakes together are fairly large at ~11% of the portfolio.

Note 1: IWM short position has wavered over the years. A ~5% portfolio stake as of Q2 2016 was built up over the previous three quarters when the underlying traded between $95 and $120. It was disposed last quarter as the ETF traded between $114 and $126. The position was rebuilt back up to a large 7.65% stake this quarter as the underlying traded between $115 and $138. IWM currently goes for ~$139.

Note 2: EEM Puts position has also wavered over the years: EEM Puts at ~7% of the portfolio was the second-largest 13F position after SPY Puts in Q3 2014. The vast majority of the stake was purchased in Q2 2014 when the share price traded between $41.50 and $46. The entire position was eliminated in Q4 2014 when EEM share price varied between $37.50 and $42.50. A ~1.5% stake was established this quarter as the underlying traded between $34 and $38. It is now at $38.55.

Note 3: The activity in the ETFs on their own does not indicate a clear bias as Soros is known to use them to hedge other parts of his portfolio.

Key Energy Services (NYSE:KEG), Time Warner (NYSE:TWX), Goldman Sachs (NYSE:GS) Calls, Kohl's Corp. (NYSE:KSS), and Oracle Corp. (NYSE:ORCL) Calls: These are small new stakes established this quarter.

Note: Soros has a 6.6% ownership stake in Key Energy Services. It emerged from bankruptcy last December.

United Rentals (NYSE:URI) Puts and Lamar Advertising (NASDAQ:LAMR) Puts: These are small new short stakes established this quarter.

Stake Disposals:

Barrick Gold (NYSE:ABX): The ABX stake was the largest individual stock position in the 13F at ~6% of the portfolio in Q1 2016. It was purchased at prices between $7.38 and $15.18 and almost eliminated the following quarter at prices between $13.50 and $21.35. Last quarter, the position was built back up to a 1.26% portfolio stake at prices between $17 and $23. The disposal this quarter was at prices between $14 and $18.50. The stock is now at $20.50.

Note: ABX has seen several roundtrips in the portfolio over the years.

CVS Health (NYSE:CVS) Calls: The stake was minutely small in Q2 2016. Last quarter saw the position built up to a ~1.5% portfolio position as the underlying traded between $89 and $98. It was eliminated this quarter as the stock traded between $73.50 and $89. CVS currently trades at $79.45.

MGM Resorts (NYSE:MGM) Puts: This short position was established in Q2 2016 as the underlying traded between $21 and $25. Last quarter saw the stake built up to a 1.80% portfolio position (~160% increase) as MGM traded between $22.50 and $26.50. The disposal this quarter happened as MGM traded between $25.50 and $30. It is now at $26.86.

iShares China Large-Cap ETF (NYSEARCA:FXI), iShares MSCI Emerging Market ETF and Wisdomtree Japan Hedged Equity (NYSEARCA:DXJ): These are index ETF stakes established last quarter but eliminated this quarter. EEM was a 2.30% portfolio stake while the other two were below 1% each.

Note: FXI and EEM are both frequently traded in Soros' portfolio.

58.com (NYSE:WUBA) and Intel Corporation (NASDAQ:INTC): These are very small stakes (less than ~1% of the portfolio each) established last quarter but disposed of this quarter.

Applied Materials (NASDAQ:AMAT) and Liberty Global Lilac (NASDAQ:LILA) (NASDAQ:LILAK): These are very small (less than ~0.5% of the portfolio each) stakes that were increased last quarter but eliminated this quarter.

Communications Sales & Leasing (CSAL): The very small 0.5% stake in CSAL was reduced last quarter and disposed of this quarter.

Stake Increases:

California Resources Corp. (NYSEMKT:CRC) and T-Mobile US (NASDAQ:TMUS): These were minutely small positions last quarter. CRC saw a ~60% increase to a ~1% portfolio stake this quarter at prices between $9.50 and $21.50. The stock currently trades at $17.64. TMUS saw a ~220% increase to a ~1% portfolio position at prices between $45 and $59. It currently goes for $60.61.

Grupo Supervielle (NYSE:SUPV), Model N Inc. (NYSE:MODN), EXA Corp. (NASDAQ:EXA) and Mondelēz (NASDAQ:MDLZ): These are very small (less than ~0.6% of the portfolio each) stakes that were increased this quarter.

Note: Soros controls ~10% of MODN and ~9% of EXA.

Stake Decreases:

Liberty Broadband: LBRDK is the largest individual stock position by far at ~14% of the portfolio. The stake was established in Q2 2016 at prices between $55 and $60.50. The stock is now well above that range at $86.35. Last quarter saw a marginal increase while there was minor trimming this quarter.

S&P 500 SPDR (NYSEARCA:SPY) Puts: SPY stake has varied over the years. Recent activity follow: In Q1 2015 the SPY Puts were a large ~11% portfolio stake. The following quarter saw a reversal: The SPY Puts stake was reduced while adding a huge position in SPY Calls. Q3 2015 saw a reduction in both the positions. The net was a very small ~1.46% position in SPY Puts. In Q4 2015, the SPY Calls were sold while SPY Puts were increased significantly. H1 2016 saw a huge increase to a ~18% portfolio stake in the Puts. Last quarter saw a ~83% reduction in the Puts and that was followed by a ~25% selling this quarter. The remaining position is at 2.55% of the portfolio.

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

TiVo Corporation previously Rovi: TIVO is a ~2% of the portfolio stake purchased in Q2 2016 at prices between $15 and $20.50. The stock is now at $21. Last quarter saw a marginal increase while this quarter saw a minor reduction.

Note: ROVI has had a previous roundtrip: a small 0.65% portfolio stake was almost eliminated in Q4 2015 at prices between $8.69 and $17.71 and the remnant position was disposed the following quarter.

Williams Companies (NYSE:WMB): WMB is now at 1.69% of the 13F portfolio. It was established last quarter at prices between $20 and $31. This quarter saw a ~25% selling at prices between $28 and $32. The stock currently trades at $28.

Zoetis (NYSE:ZTS): ZTS is a ~1% 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 ~30% increase at prices between $39.50 and $50. Q1 2016 saw a ~30% reduction at prices between $39 and $48 and that was followed by a ~45% selling the following quarter at prices between $44 and $49. There was a one-third reduction last quarter at prices between $47.50 and $52.50. The stock currently trades at $52.78. Soros is harvesting gains. There was minor trimming this quarter.

Netflix Inc. (NASDAQ:NFLX) & Calls: NFLX is a 0.79% portfolio stake established last quarter at prices between $86 and $100 and reduced by ~55% this quarter at prices between $98 and $128. The stock is now at $142.

PayPal Holdings (NASDAQ:PYPL): PYPL is a 0.74% 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. Q4 2015 saw a one-third reduction at prices between $31 and $38 and that was followed by another ~55% reduction the following quarter at prices between $31.20 and $41.32. Q2 2016 saw another ~40% reduction at prices between $34 and $40.50. PYPL currently trades at $42.15. There was a marginal reduction over the last two quarters.

eBay Inc. (NASDAQ:EBAY): EBAY is a 0.46% portfolio stake. The original fairly large 5.4M share stake was purchased in Q1 & Q3 2015 at prices between $22.50 and $29. Q4 2015 saw a ~35% reduction at prices between $24 and $29.50 while the following quarter saw a ~8% increase. There was a combined ~80% selling over Q2 & Q3 2016 at prices between $23 and $33. The stock currently trades at $33.54. There was a minor reduction this quarter.

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

Amazon.com (NASDAQ:AMZN), Bank of America (NYSE:BAC), Caesars Acquisition (NASDAQ:CACQ), Caesars Entertainment (NASDAQ:CZR), ChipMOS Tech. (NASDAQ:IMOS), Hewlett Packard Enterprise (NYSE:HPE), Kraft-Heinz (NASDAQ:KHC), and VMware Inc. (NYSE:VMW): These are very small (less than ~0.6% of the portfolio each) stakes that saw further reductions this quarter.

Kept Steady:

Adecoagro S A (AGRO): AGRO was the largest individual stock position at ~5% of the US long portfolio as of Q4 2015. It was reduced by ~45% the following quarter at prices between $11 and $13.50 and another ~15% in Q2 2016. The original stake is from prior to its IPO. The stock currently trades at around $12.45 compared to the IPO price of $11. The current stake is the second-largest individual stock position at 2.86% of the 13F portfolio.

Note: Soros controls ~10% of AGRO.

Churchill Downs (NASDAQ:CHDN) and Travelport Worldwide (NYSE:TVPT): These stakes were kept steady in the last three quarters. CHDN position is at 1.35% of the portfolio while TVPT is at 0.78%.

Although the relative sizes are very small, it is significant that Soros has significant ownership stakes in the following businesses: Arno Therapeutics (OTCPK:ARNI), Quantum Corp. (NYSE:QTM), Gridsum Holding ADR (NASDAQ:GSUM), Abeona Therapeutics (NASDAQ:ABEO), Allot Communications (NASDAQ:ALLT), Sigma Designs (NASDAQ:SIGM) and EXFO Inc. (NASDAQ:EXFO).

The spreadsheet below highlights Soros's significant US long stock positions as of Q4 2016:

Disclosure: I am/we are long BAC, INTC, 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.

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