George Soros Doubling Down on Apple Inc. (AAPL), Bullish on Big Banks: Citigroup Inc. (C), JPMorgan Chase & Co (JPM)

Page 1 of 2

In the hedge fund universe, 13F filing season is in full bloom, and while these positions are reported to the SEC with a 45-day delay, this actually improves investors’ ability to beat the market because, on average, fund managers are early into their investments. Our research has shown that hedge funds’ consensus stock picks beat the market handily, and ($BHFI quote)the MarketWatch Insider Monkey Billionaire Hedge Fund Index is a perfect example of this phenomenon. In 2012, this index returned 24.3%, beating the S&P 500 ETF (SPY) by 8 percentage points (see the details of our market-beating strategy).

He’s a hedge fund kahuna that needs no introduction, so let’s take a look at George Soros and the rest of his investment team’s key moves from the fourth quarter.

Bullish on big banks

The global banking industry as a whole has returned more than 25% over the past year, and Soros’s fund, aptly named Soros Fund Management, was playing this fiddle in the fourth quarter.

After sitting in the No. 50 spot in Soros’s 13F portfolio at the end of the third quarter, Citigroup Inc. (NYSE:C) is now the hedgie’s top common stock holding. Soros also upped his stake in JPMorgan Chase & Co (NYSE:JPM) by more than 150% over this three-month period, while taking a new position in Morgan Stanley (NYSE:MS).

Combined, this trio represented an exposure of greater than $510 million at the end of last year, and shares of each banking stock have risen by double-digits in 2013 thus far. From a valuation standpoint, Citigroup is the most attractive of the bunch at a mere 0.7 times book, and its global focus gives it an added growth advantage. The bank has also seen multiple high-level insiders buying shares since last November—yet another bullish indicator to be aware of.

Doubling down on Apple Inc. (NASDAQ:AAPL)

Here’s where it gets really interesting. As the latest round of 13F filings have fluttered in, hedge funds have been all overSOROS FUND MANAGEMENT the map with regard to Apple Inc. (NASDAQ:AAPL). The tech giant was the smart money’s top consensus pick at the end of the third quarter, and despite its continued selloff, Soros and his team felt comfortable upping their stake by a little over 115% last quarter. Apple is obviously undervalued, but the key question investors must ask themselves is: can the company expand its investor base?

A dividend yield near 2.3% offers a solid payout, but with its overhyped treasure trove of cash, the company can make its shares more attractive to income-oriented investors. It appears that Apple Inc. (NASDAQ:AAPL)’s so-called “secret” hedge fund may be preparing for such a move.

Even if a dividend boost or a lengthened share buyback are off the table, Apple still offers better growth prospects than Google Inc (NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT) and most other large-cap tech companies out there.

The sell-side expects Cupertino to average earnings growth of 18%-19% a year over the next half-decade, and a PEG near 0.5 indicates Mr. Market isn’t anywhere close to accurately judging this potential.

Who’s the best of the rest aside from Apple Inc. (NASDAQ:AAPL) and the big banks?

Page 1 of 2
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

On the Move: The 10 Fastest Growing Businesses in 2015

Fast Money: The 10 Highest Paying Fast Food Restaurants

Mixing It Up: The 14 Best Music Mashups of 2014

Rito Pls Buff: The 10 Least Played Champions in LoL Season 4

10 Covers of Popular Songs that are Better than the Originals

Must See TV: The 9 Most Anticipated Shows of 2015

The 15 Biggest Box Office Bombs of All Time

10 Things The World Can’t Stand About Americans

Picture Perfect: The 6 Smartphones with the Best Cameras

The 10 Best Countries To Work In the World

A Profitable Day At The Track: 5 Tips For Betting On Horses

Tearing You Apart: 6 Bad Habits That Ruin Relationships

Learning on the Job: The 6 Biggest Mistakes Parents Make

Shopaholics Rejoice: The 12 Biggest Malls in the World

Fright Night: 10 Horror Movies Based on True Stories

Mach Mania: The 10 Fastest Jets in the World

Military Heavyweights: The 10 Countries with the Most Tanks

All In: The 7 Richest Poker Players in the World

Abracadabra: The 10 Best Magicians in the World

The 10 Richest Asian Countries in the World in 2014

Eyes in the Sky: 10 Things You Need to Know About Drones

Rising Stars: The 6 Best Silicon Valley Startups

Military Muscle: The 5 Most Advanced Armies in South America

All that Glitters: The 7 Most Luxurious Jewelry Brands in the World

5 Things You Didn’t Know About ISIS but Should

Empowering Your Money: The 5 Best Energy Stocks to Invest In

The 11 Best Android Apps You Can’t Get on iOS

The 10 Most Important International Conflicts in 2014

Mood Enhancers: The 20 Most Uplifting Songs of all Time

Lover Beware: The 8 Countries that Cheat the Most

Breath of Fresh Air: The 25 Countries with the Best Air Quality on the Planet

Singles Beware: The 8 Worst Mistakes Made on First Dates

Healthy and Happy: The 10 Countries with Lowest Healthcare Costs

The 6 Best Company Team Building Activities to Build Workplace Camaraderie

Ships Ahoy: The 10 Busiest Shipping Ports in the World

10 Productivity Tips to Save You Time and Help You Do More With Less

Grab a Bite: The Most Popular Fast Food Restaurants in America

Friday Night Thirst: The 10 Most Popular Cocktails in the World

The 6 Greatest Unsolved Mysteries We May Never Figure Out

7 Useless Products You Never Should’ve Bought

The 5 Reasons Why You’re Single and Miserable

The 7 Most Addictive Foods in the World We Can’t Stop Eating (Even Though We Should)

5 Amazing Places You Can Swim with Dolphins

The Top 7 Most Livable Countries In The World

The 10 Most Expensive Baseball Cards Ever Pulled From A Pack

The 5 Easiest Second Languages to Learn for English Speakers

Silver Spoon: The 6 Richest Families in the World

The 20 Countries with the Largest Prison Populations in the World

The Top 10 Richest Actors in the World

The 10 Best Airline Stocks to Invest In Before They Fly Too High

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!