George Soros, the veteran billionaire investor who is widely known as ‘the man who broke the bank of England’ has dramatically increased his fund, Soros Fund Management‘s stake in MaxLinear, Inc. (NYSE:MXL) according to a recent filing with the Securities and Exchange Commission. The investment firm now owns some 2.69 million shares of MaxLinear, up from 766,700 shares that it held as of March 31. The stake represents 5.19% of the company’s outstanding common stock.
With a net worth of $24.2 billion the 84-year-old George Soros occupies the 29th spot on Forbes’ list of world’s richest billionaires. In 2011, Soros returned all capital from outside investors and now runs the firm as a family office. Although the day-to-day operations of the fund are taken care of by its chief investment officer, Scott Bessent, Soros still remains involved with the fund. Soros established his firm in 1969 with $12 million. By the end of March, the market value of the firm’s public equity portfolio stood at $10.16 billion, with technology and finance stocks representing 26% and 20% of the holdings respectively. The turnover ratio for the quarter was at the high end of the spectrum at 62.95%. In 2014, Soros Fund generated 8% returns as compared to the industry’s average of 3.3%, according to HFR.
As far as the importance of tracking hedge funds is concerned, we discovered through our research that a portfolio of the 15 most popular small cap picks of hedge funds beat the S&P 500 Total Return Index by nearly a percentage point per month between 1999 and 2012. On the other hand the most popular large cap picks of hedge funds underperformed the same index by 7 basis points per month during the same period. In forward tests since August 2012 through March 2015 the top 15 small-cap stocks beat the market by a hefty 79.4 percentage points (read the details here). Hence a retail investor needs to isolate himself from the herd of investors chasing large-cap stocks and take advantage of the prevalent arbitrage opportunities in the market by concentrating on these money-making small-cap stocks.
Soros initiated a position in MaxLinear, Inc. (NYSE:MXL) during the first quarter. The $627.90 million tech company’s stock has surged by more than 44% so far this year. This compares extremely favorably with the semiconductors industry, which has risen by nearly 8% during the same period.
In its financial results for the first quarter, the provider of highly integrated, radio-frequency analog and mixed-signal semiconductor solutions for broadband communications applications, beat both the top and bottom line estimates, reversing a past trend of it consistently failing to meet expectations. Since MaxLinear, Inc. (NYSE:MXL) has considerable exposure to China (71% of its 2014 revenues came from the world’s second-largest economy), it is set to benefit from the future rise in technological investments in the country.