In this article, we discuss 10 new stock picks of billionaire George Soros.
Soros Fund Management was founded in 1970 by George Soros, a Hungarian-American billionaire investor and hedge fund manager. The hedge fund has large investments in the information technology, finance, consumer discretionary, and communications sectors, as per the Q4 13F filings.
Based in New York City and investing primarily in public and private equity, fixed income markets, foreign exchange, commodities, and venture capital funds, Soros Fund Management has a top ten holdings concentration of 61.69%, with Rivian Automotive, Inc. (NASDAQ:RIVN) as the largest holding in the portfolio, representing 28.14% of the total Q4 securities.
Soros Fund Management has a 13F portfolio worth $7.30 billion, and the fund purchased 94 new stocks, bought additional stakes in 29 securities, sold out of 65 equities, and reduced holdings in 36 companies in the fourth quarter of 2021. The fund’s top buys were Rivian Automotive, Inc., Cerner Corporation (NASDAQ:CERN), and Sea Limited (NYSE:SE), whereas, it reduced holdings in Liberty Broadband Corporation (NASDAQ:LBRDA), Zoom Video Communications, Inc. (NASDAQ:ZM), and Amazon.com, Inc. (NASDAQ:AMZN).
The most notable stocks in the fourth quarter portfolio of Soros Fund Management included Alphabet Inc. (NASDAQ:GOOG), General Motors Company (NYSE:GM) and salesforce.com, inc. (NYSE:CRM).
Our Methodology
We used the Q4 2021 portfolio of Soros Fund Management for this analysis, selecting the newest stock picks of the hedge fund for the period.
George Soros of Soros Fund Management
New Stock Picks of Billionaire George Soros
10. Hertz Global Holdings, Inc. (NASDAQ:HTZ)
Soros Fund Management’s Stake Value: $9,996,000
Percentage of Soros Fund Management’s 13F Portfolio: 0.13%
Number of Hedge Fund Holders: N/A
Hertz Global Holdings, Inc. (NASDAQ:HTZ) is a Florida-based car rental company that offers rental and car leasing services across 160 countries including North America, Europe, Latin America, Africa, Asia, Australia, the Caribbean, the Middle East, and New Zealand.
Soros Fund Management acquired a stake in Hertz Global Holdings, Inc. in Q4 2021, buying 400,000 shares of the company, worth roughly $10 million.
On November 29, shares of Hertz Global Holdings, Inc. gained 7.25% in pre-market trading after the company announced a share repurchase program to buy back up to $2 billion of its outstanding common stock.
Barclays analyst Brian Johnson on January 20 lowered the price target on Hertz Global Holdings, Inc. to $26 from $28 and kept an Overweight rating on the shares. The analyst reduced estimates modestly and points to “what now may be the peak for earnings revisions, near term, in the rental car space”. According to Johnson, “valuations appear to be coming in slightly, though we still see room for earnings and multiples to converge”.
Among the hedge funds tracked by Insider Monkey, Knighthead Capital held a prominent stake in Hertz Global Holdings, Inc., with 181.45 million shares worth $4.5 billion.
Just like Alphabet Inc., General Motors Company, and salesforce.com, inc. (NYSE:CRM), Hertz Global Holdings, Inc. is a notable addition to billionaire George Soros’ hedge fund as of Q4 2021.
9. Aurora Innovation, Inc. (NASDAQ:AUR)
Soros Fund Management’s Stake Value: $11,260,000
Percentage of Soros Fund Management’s 13F Portfolio: 0.15%
Number of Hedge Fund Holders: N/A
Aurora Innovation, Inc. (NASDAQ:AUR) is a Pennsylvania-based company that creates self-driving vehicle technology to support autonomous driving. Aurora Innovation, Inc. has partnered with industry leaders like Uber Technologies, Inc. (NYSE:UBER), NVIDIA Corporation (NASDAQ:NVDA), and Toyota Motor Corporation (NYSE:TM).
In the fourth quarter of 2021, Soros Fund Management purchased 1 million shares of Aurora Innovation, Inc., worth $11.26 million, representing 0.15% of the firm’s Q4 portfolio.
Aurora Innovation, Inc. and U.S. Xpress Enterprises, Inc. (NYSE:USX) announced on February 14 a collaboration to explore the deployment of the Aurora Driver within U.S. Xpress Enterprises, Inc.’s operations. This strategic collaboration is designed to fine-tune Aurora Innovation, Inc.’s autonomous driver-as-a-service product, Aurora Horizon, for efficient deployment at commercial scale.
Goldman Sachs analyst Mark Delaney initiated coverage of Aurora Innovation, Inc. on December 15 with a Neutral rating and a $13 price target. The analyst believes that Aurora Innovation, Inc. is well positioned to be successful in the autonomous market in the long run, especially in trucking. However, he noted that there are several risks that remain related to the time to market/development, regulations, and competition.
Citadel Investment Group, a leading Wall Street fund founded by billionaire Ken Griffin, held the leading stake in Aurora Innovation, Inc. as of Q3 2021, with 5.80 million shares worth $57.6 million.
8. TPB Acquisition Corporation I (NASDAQ:TPBA)
Soros Fund Management’s Stake Value: $12,863,000
Percentage of Soros Fund Management’s 13F Portfolio: 0.17%
Number of Hedge Fund Holders: N/A
TPB Acquisition Corporation I (NASDAQ:TPBA) is a blank check company that was incorporated in 2021 and is based in San Francisco, California. The company was created with the intention of effecting mergers, capital stock exchange, asset acquisition, corporate reorganization, and similar business combinations within the food, agriculture, biomanufacturing, and life sciences sectors.
On February 19, 2021, TPB Acquisition Corporation I announced that it plans to raise $250 million by offering 25 million units at a price of $10, which would result in a market value of $313 million.
In Q4 2021, Soros Fund Management purchased 1.3 million TPB Acquisition Corporation I shares, worth $12.8 million, representing 0.17% of the firm’s total 13F holdings for the period.
7. Shell plc (NYSE:SHEL)
Soros Fund Management’s Stake Value: $13,005,000
Percentage of Soros Fund Management’s 13F Portfolio: 0.17%
Number of Hedge Fund Holders: 33
Shell plc (NYSE:SHEL) is a Netherlands-based company that operates in the energy and petrochemical sectors worldwide. Shell plc (NYSE:SHEL) is a new arrival in the Q4 portfolio of Soros Fund Management, with the firm purchasing 300,000 shares of the company, valued at $13 million. The stock accounts for 0.17% of the fund’s 13F portfolio.
On February 3, Shell plc (NYSE:SHEL) declared a quarterly dividend of $0.4 per average diluted share, offering a forward yield of 3.61%. The dividend is payable on March 28, to shareholders of record on February 18. The company also announced share buybacks of $8.5 billion for H1 2022, including $5.5 billion of Permian divestment proceeds.
In a press release on February 3, Shell plc (NYSE:SHEL) reported a Q4 non-GAAP EPS of $0.83, beating estimates by $0.17. Revenue for the period came in at $85.28 billion, up 93.9% year-on-year, surpassing consensus estimates by $26.62 billion.
BofA analyst Christopher Kuplent initiated coverage of Shell plc (NYSE:SHEL) with a Buy rating and a $66 price target after the company completed the collapse of its dual listings and changed its name from Royal Dutch Shell to Shell plc (NYSE:SHEL). After the company’s “solid” Q4 results and 2022 outlook, he highlights Shell plc (NYSE:SHEL) as one of his top picks in European Big Oils.
Among the hedge funds monitored by Insider Monkey, 33 funds held long positions in Shell plc (NYSE:SHEL) in Q3 2021, down from 38 funds in the preceding quarter. Fisher Asset Management held the biggest stake in the company, with more than 18 million shares worth $809 million.
Here is what Goehring & Rozencwajg Associates has to say about Shell plc (NYSE:SHEL) in its Q3 2021 investor letter:
“Royal Dutch Shell’s ESG challenges continue unabated. A Dutch court ruled in May that Royal Dutch Shell must cut its CO2 output by 45% by 2030 to align their policies with the Paris Climate Accord. In a statement issued after the verdict, a Shell spokesperson acknowledged that “urgent action is needed on climate change and the company is accelerating efforts to reduce emissions.” If the pressure from the Dutch court system was not enough, an activist shareholder has proposed breaking the company apart to address ESG concerns. On October 27th, Third Point Management announced the following.
“If Shell pursues this type of strategy it would probably lead to an acceleration of carbon dioxide reduction. […] Breaking Shell into two operating units would create a standalone legacy energy business (upstream, refining, and chemicals) that could slow capex beyond what it has already promised, sell assets, and prioritize return of cash to shareholders which can be reallocated into low-carbon areas of the market.”
Shell has already cut spending dramatically over the last decade. After having peaked at $39 bn in 2013, upstream capital spending fell to only $17 bn in 2020 – a drop of nearly 60%. Spending has barely recovered in the three quarters of 2021. A lack of spending has already impacted production. Proforma for the 2016 acquisition of BG Group, Shell’s total production has fallen 13% since capital spending peaked in 2013. These trends are accelerating: Shell’s production over the first nine months of 2021 have fallen 7% compared with the same period last year.
If Royal Dutch Shell’s upstream capital spending remains at today’s depressed levels, we estimate the company will only be able to replace 30% of production with new reserves and that production will fall 40% over the next nine years. If spending is further curtailed (as is being proposed), Shell’s oil and natural gas production would collapse – something that may have already started.”
6. Peloton Interactive, Inc. (NASDAQ:PTON)
Soros Fund Management’s Stake Value: $13,341,000
Percentage of Soros Fund Management’s 13F Portfolio: 0.18%
Number of Hedge Fund Holders: 62
Peloton Interactive, Inc. (NASDAQ:PTON) offers interactive fitness products and online subscription-based workout lessons to customers across North America and internationally. Soros Fund Management acquired a $13.3 million stake in Peloton Interactive, Inc. in Q4 2021, which represents 0.18% of the firm’s total 13F securities.
On February 8, Peloton Interactive, Inc. reported its Q4 results, posting a loss per share of $1.22, missing estimates by $0.30. The $1.13 billion revenue increased 6.49% from the prior-year quarter, but missed estimates by $17.35 million.
MKM Partners analyst Rohit Kulkarni on February 10 raised the price target on Peloton Interactive, Inc. to $35 from $30 but kept a Neutral rating on the shares after its Q4 results, updated outlook, and management changes. According to the analyst, Peloton Interactive, Inc.’s new CEO has a tremendous track record of creating shareholder value, and at-home connected fitness should see a larger market opportunity in the “new normal”, but the stock is now a “show-me story”.
Tiger Global Management held the leading stake in Peloton Interactive, Inc. in Q3 2021, with more than 7 million shares worth $626.4 million. Overall, 62 hedge funds reported owning stakes in Peloton Interactive, Inc. in the third quarter, with collective stakes amounting to $4.6 billion.
Despite struggles, Peloton Interactive, Inc. remains a famous stock, just like Alphabet Inc., General Motors Company, and salesforce.com, inc. (NYSE:CRM).
Here is what Miller Value Partners Opportunity Equity has to say about Peloton Interactive, Inc. in its Q4 2021 investor letter:
“Money losing growth stocks posted the biggest losses late in the year. Jim Cramer termed this behavior getting “pelotoned,” as Peloton is the poster child for what we experienced. At recent prices ($31.33 as of close 1/14/22), Peloton is more than 80% off its highs. It’s reversed nearly all its pandemic gains, trading at levels close to the IPO price ($29).
We previously owned Peloton, so we know the company well. We bought Peloton after the IPO based on our belief it was a misunderstood consumer brand pegged as a faddish hardware company.
It benefited enormously from the pandemic as demand surged and customer acquisition costs plummeted. We expected these dynamics to reverse as the environment normalized from stay-at-home. We sold in late 2020 because we thought it was fully valued around $100. Growing risks created a poor risk/reward.
At current prices, it’s interesting once again and we’ve resumed work on it. Market sentiment towards money losers remains quite negative. Peloton’s prospects, like others, ultimately depend on its ability to drive free cash flow over the long term. We reference Peloton because it’s an extreme example of behavior we’ve seen more broadly.”
5. TransDigm Group Incorporated (NYSE:TDG)
Soros Fund Management’s Stake Value: $14,953,000
Percentage of Soros Fund Management’s 13F Portfolio: 0.20%
Number of Hedge Fund Holders: 63
Soros Fund Management purchased 23,500 shares of TransDigm Group Incorporated (NYSE:TDG) in Q4 2021, worth approximately $15 million, representing 0.20% of the firm’s total 13F securities. TransDigm Group Incorporated is an Ohio-based company that manufactures engineered aerospace components.
Publishing its Q4 results on February 8, TransDigm Group Incorporated announced earnings per share of $3.00, missing estimates by $0.17. The $1.19 billion revenue missed estimates by roughly $42 million.
On February 9, Morgan Stanley analyst Kristine Liwag raised the price target on TransDigm Group Incorporated to $801 from $762 and kept an Overweight rating on the shares. Though the company reported a top and bottom line miss in fiscal Q1 driven by its Defense segment, EBITDA margins remained strong, commercial aftermarket activity continued to strengthen, and sequential bookings growth outpaced sales growth in the quarter, the analyst told investors in a bullish note.
A total of 63 hedge funds were bullish on TransDigm Group Incorporated in Q3 2021, up from 57 funds in the quarter prior. Stockbridge Partners held a significant stake in TransDigm Group Incorporated as of September 2021, with 1.5 million shares worth approximately $971 million.
Here is what Vulcan Value Partners has to say about TransDigm Group Incorporated in its Q2 2021 investor letter:
“TransDigm Group Inc., another material contributor during the quarter, is an aerospace manufacturer providing highly engineered, niche components for use on commercial and military aircraft. The vast majority of the company’s profits come from aftermarket sales. Its business was impacted by the global pandemic; however, the company has been able to maintain margins despite strong revenue headwinds, and it continues to generate strong free cash flow.”
4. Warby Parker Inc. (NYSE:WRBY)
Soros Fund Management’s Stake Value: $15,282,000
Percentage of Soros Fund Management’s 13F Portfolio: 0.20%
Number of Hedge Fund Holders: 12
Warby Parker Inc. (NYSE:WRBY) is a New York-based online retailer of prescription glasses and fashion eyewear, which has now expanded to physical retail stores across the United States and Canada.
Soros Fund Management acquired a position in Warby Parker Inc. in the fourth quarter of 2021, buying 328,216 shares of the company, worth $15.2 million. The stock accounts for 0.20% of the fund’s Q4 securities.
Loop Capital analyst Anthony Chukumba on December 10 lowered the price target on Warby Parker Inc. to $52 from $60 and kept a Hold rating on the shares. The price target cut reflects rising inflation, which may negatively impact the valuations that investors are willing to pay for high growth companies like Warby Parker Inc., the analyst conveyed to investors in a research note.
Billionaire Daniel Sundheim’s D1 Capital Partners held the biggest stake in Warby Parker Inc., owning over 8 million shares worth $432.5 million. Overall, 12 hedge funds were bullish on the stock in the third quarter.
3. Bowlero Corp. (NYSE:BOWL)
Soros Fund Management’s Stake Value: $84,788,000
Percentage of Soros Fund Management’s 13F Portfolio: 1.16%
Number of Hedge Fund Holders: N/A
Bowlero Corp. (NYSE:BOWL) is a New York-based company that operates bowling centers. Soros Fund Management acquired 9.40 million shares of Bowlero Corp. in Q4 2021, valued at $84.78 million, representing 1.16% of the firm’s total 13F securities.
In a press release on February 9, Bowlero Corp. reported a Q2 net loss of C$34.5M. The company’s revenue came in at C$205.19 million, up 11% year-over-year, outperforming estimates by C$7.29 million. On February 7, Bowlero Corp. announced that its board of directors has approved a repurchase program for up to $200 million of its outstanding shares of Class A common stock and warrants through February 3.
Woodson Capital Management held the leading stake in Bowlero Corp. at the close of the third quarter of 2021, with 1.50 million shares worth roughly $15 million.
2. Cerner Corporation (NASDAQ:CERN)
Soros Fund Management’s Stake Value: $108,658,000
Percentage of Soros Fund Management’s 13F Portfolio: 1.48%
Number of Hedge Fund Holders: 36
Cerner Corporation is an American supplier of health informatics software, devices, and hardware. Soros Fund Management acquired 1.17 million shares of Cerner Corporation in Q4 2021, worth $108.6 million, representing 1.48% of the firm’s 13F portfolio.
On February 11, Oracle Corporation (NYSE:ORCL) announced that it extended the tender offer for shares of Cerner Corporation to March 16, from a prior date of February 15. In December, Oracle announced its intention to acquire Cerner Corporation for $95 per share in cash, pushing further into the healthcare tech space.
KeyBanc analyst Donald Hooker on December 21 downgraded Cerner Corporation to Sector Weight from Overweight without a price target after news that the company plans to be acquired by Oracle Corporation. The analyst believes the acquisition price of $95 per share fully values Cerner Corporation.
In Q3 2021, 36 hedge funds reported owning stakes in Cerner Corporation, amounting to $1.27 billion, as compared to 38 funds in the prior quarter, holding stakes in Cerner Corporation worth $1.39 billion. Jeffrey Smith’s Starboard Value LP is the biggest stakeholder of the company as of September 2021, with 3.2 million shares valued at approximately $229 million.
Here is what Cooper Investors Global Equities Fund (Hedged) has to say about Cerner Corporation in their Q1 2021 investor letter:
“The investment in Cerner, made just over a year ago, was based on what we perceived to be a Low-Risk Turnaround opportunity as a refreshed management team sought to increase margins, reduce capex and utilize balance sheet latency with buybacks and acquisitions. Taking account of the tough 2020 for Cerner’s hospital client base the company did a reasonable job executing on these initiatives. However, moving into 2021 more recent observations around intentionality and focus led to a reassessment of the investment proposition, particularly relative to the portfolio’s other technology and software investments.”
1. Rivian Automotive, Inc. (NASDAQ:RIVN)
Soros Fund Management’s Stake Value: $2,056,770,000
Percentage of Soros Fund Management’s 13F Portfolio: 28.14%
Number of Hedge Fund Holders: N/A
Rivian Automotive, Inc. is the largest holding in the fourth quarter portfolio of Soros Fund Management, with the firm acquiring 19.8 million shares of Rivian Automotive, Inc. in Q4, worth more than $2 billion, representing 28.14% of the total 13F securities for the period.
Rivian Automotive, Inc. is a California-based manufacturer of electric adventure vehicles, focusing mainly on pickup trucks and sports utility vehicles.
JPMorgan analyst Ryan Brinkman lowered the price target on Rivian Automotive, Inc. on January 26 to $84 from $104 and kept a Neutral rating on the shares. The analyst slightly lowered expectations for Q4 Rivian units to $800 from $900, but the reduction in the price target is a consequence of a higher assumed discount rate.
Here is what Greenlight Capital has to say about Rivian Automotive, Inc. in its Q4 2021 investor letter:
“We made a material gain in Rivian (RIVN) as a result of its IPO. We met RIVN’s sponsors in 2018 as part of our continued work on electric vehicles, and were favorably impressed by their technology and discipline. In mid-2020, we made a small investment at a $10 billion valuation. In November, RIVN went public at a $70 billion valuation and traded to a peak valuation of $162 billion. We hedged in the options market to lock in a minimum valuation of about $120 billion for a good chunk of our position. While we are believers in the company, we did not have material exposure at year end.”
You can also take a look at Morgan Stanley’s Top 10 Stock Picks for 2022 and 15 Worst Stock Picks of Cathie Wood.
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This article is originally published at Insider Monkey.
