Every quarter, many money managers have to disclose what they’ve bought and sold, via “13F” filings. Their latest moves can shine a bright light on smart stock picks.
George Soros is known to some folks these days for his politics and philanthropy, but his fame stems from his wealth, which is a result of his outstanding investing prowess. He founded Soros Fund Management back in 1973, and under its umbrella, the Quantum funds racked up an amazing record, reportedly averaging close to 20% annual growth over four decades. He has noted, though, that hedge funds can’t beat the market due to fees.
As The New York Times has explained, “His huge gains have come from macro bets, which aim to profit from global economic trends by trading currencies, commodities, bonds and other securities. Mr. Soros made his name, however, betting on currencies.”
Soros Fund Management’s reportable stock portfolio totaled $9.2 billion in value as of June 30, 2013.
So what does Soros Fund Management’s latest quarterly 13F filing tell us? Here are a few interesting details:
The biggest new holdings are J.C. Penney and Herbalife. Other new holdings of interest include CST Brands and LSI Corp (NASDAQ:LSI). CST Brands, spun off from Valero Energy, is a retailer operating about 1,900 gas stations and convenience stores. In its second quarter, it reported net income down 60% and revenue down 4%, but still topped analyst expectations for revenue and earnings. The drop was largely due to volatile fuel prices last year delivering some higher prices. CST Senior Vice President and Chief Financial Officer Clay Killinger noted, “We believe that we are in a good position coming out of the spin… Ending the second quarter with $414 million in cash, and the additional liquidity available to us from our credit facilities, helps position us to grow for years to come.”
Semiconductor company LSI Corp (NASDAQ:LSI), with a new dividend yielding 1.6%, looks attractive with its forward P/E ratio of 13. Its second-quarter report was strong, with its CEO waxing bullish: “We expect both our storage and networking businesses to be up in the third quarter, with new product cycles contributing to our growth.” About the new dividend, he noted, “”The dividend we announced today, coupled with our ongoing share buyback program, further demonstrates our confidence and continued commitment to shareholder return.” Analysts at Zacks have upgraded the stock to Outperform, noting repeated estimate-topping results.
Soros Fund Management reduced its stake in lots of companies, including Acacia Research and SanDisk. Among holdings in which it increased its stake was Micron Technology, Inc. (NASDAQ:MU). Micron Technology, Inc. (NASDAQ:MU) is sitting near a 52-week high and has more than doubled in value over the past year. Its purchase of Japanese manufacturer Elpida has boosted expectations, as it enhances Micron Technology, Inc. (NASDAQ:MU)’s capacity, its pricing power, and its relationship with Apple. It also delivers cash, which Micron Technology, Inc. (NASDAQ:MU) might use for share buybacks or to reinstate its long-discontinued dividend. Some worry, though, about competition, the industry’s cyclicality, and Micron Technology, Inc. (NASDAQ:MU)’s debt levels. Micron Technology, Inc. (NASDAQ:MU) beat expectations for both revenue and earnings in its last quarter, and recently announced that it was cutting more than 1,000 jobs. Analysts at R.W. Baird recently downgraded the stock on supply chain concerns, but other researchers, such as RBC Capital, are bullish, expecting strength in memory chip prices.