Billionaire George Soros’s Small Cap Picks Include US Airways Group Inc (LCC)

Caesars Entertainment Corp (NASDAQ:CZR) was another of Soros’s small cap picks; he and his investment team more than doubled the size of their position in the struggling casino owner. The company is not expected to be profitable either this year or next year, and its financial statements show that it is highly levered. In addition, revenue was actually down last quarter compared to the first quarter of 2012. Caesars Entertainment Corp (NASDAQ:CZR) is also popular among short sellers, with 29% of the float held short, and we’d certainly advise against buying at this time.

The filing disclosed ownership of 1.1 million shares of Energen Corporation (NYSE:EGN), which acts as an oil and gas exploration and production company as well as a distributor of natural gas in the state of Alabama. With trailing and forward P/Es of 16 and 14, respectively, Energen Corporation (NYSE:EGN) doesn’t qualify as a pure value stock though it’s also not clearly overpriced as we suspect some of Soros’s other picks might be. While revenue was up strongly in its most recent quarter compared to the same period in the previous year, however, earnings fell slightly.

Shutterfly, Inc. (NASDAQ:SFLY) doesn’t seem like a good buy to us, and with Acacia Research Corp (NASDAQ:ACTG) we’d need to see the company do better going forward. Caesars Entertainment Corp (NASDAQ:CZR) seems like it is getting close to being distressed, given how much debt is on the company, and if anything we might want to look into the cost to borrow the company’s shares. US Airways Group Inc (NYSE:LCC) is a potential value play, though as we mentioned the industry as a whole carries low multiples and it might be worth comparing the company to peers which do not face integration risks.

Disclosure: I own no shares of any stocks mentioned in this article.