In this article, we will look at 10 undervalued stocks to buy according to George Soros’ hedge fund, Soros Fund Management.
George Soros is an American billionaire investor and hedge fund manager of Soros Fund Management. According to Forbes, as of March 2022, Mr. Soros’ net worth is valued at $8.6 billion. In 1992, Mr. Soros earned the title of “the man who broke the bank of England” after he made a profit of $1 billion during the 1990 economic crisis, as a result of placing short bets on pound sterling.
Before Soros Fund Management
Mr. Soros attended the London School of Economics as a philosophy major. He went on to earn a Master of Science in the very discipline and graduated from his alma mater in 1954. He began his investment career as a clerk at Singer and Friedlander in 1954. He, later on, went to work as a trader at F.M. Mayer and Wertheim and Co., where he specialized in European securities. While working at F.M. Mayer, Mr. Soros started theorizing one of his college professor’s ideas, which later on became what is now known as George Soros’ theory of reflexivity. The theory of reflexivity is based on the idea that market values do fluctuate based on human error when trading, and not only by global economic events.
In 1963, Mr. Soros scored a vice president job at Arnhold and S. Bleichroeder. In 1966, he found a fund with $100,000 to implement his trading strategies. In 1969, Mr. Soros started the Double Eagle hedge fund with Henry H. Arnhold with an initial capital of $4 million, of which $250,000 was his own money and the rest was that of investors. The fund proved to be a success and went on to help Mr. Soros in founding his hedge fund, Soros Fund Management.
Soros Fund Management
Mr. Soros founded Soros Fund Management in 1970, the fund that became known as one of the most profitable investment firms in 2010. The fund’s compound annual returns had averaged out to about 20% per year. The fund has a diverse portfolio populated with investments in the bond market, the foreign exchange market, public and private companies, commodities, and venture capital funds.
As of the fourth quarter of 2021, Soros Fund Management has upped its stakes in 29 stocks, exited out of 65 company stocks, added 94 new securities, and decreased its stakes in 36 companies. The fund has a top ten holdings concentration of 61.69% and has a 13F portfolio worth over $7.30 billion.
The fund’s top 13F holdings include Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG), and Liberty Broadband Corporation (NASDAQ:LBRDA). However, for this list, we will be mentioning the top 10 undervalued stocks on Soros Fund Management’s investment portfolio by stake value regardless of where they rank overall.
George Soros of Soros Fund Management
Our methodology
To compile this list of 10 undervalued stocks to buy according to George Soros’ hedge fund, we scoured Soros Fund Management’s Q4 2021 investment portfolio. To determine undervalued stocks, we checked each stock’s price-to-earnings ratio on Yahoo Finance. Finally, we selected stocks that had a trailing twelve months PE ratio of less than 15.
Moreover, we included the hedge fund sentiment and analyst rating for each stock. As of the fourth quarter of 2022, Insider Monkey tracks 924 hedge funds. We believe hedge fund sentiment helps determine which stocks are popular among investor circles today and can aid our readers in making informed investment decisions.
Without further ado, let’s look at 10 undervalued stocks to buy according to George Soros’ hedge fund.
10 Undervalued Stocks to Buy According to George Soros’ Hedge Fund
10. Synchrony Financial (NYSE:SYF)
Soros Fund Management’s Stake Value: $8,719,000
Percentage of Soros Fund Management’s 13F Portfolio: 0.11%
Number of Hedge Fund Holders: 34
PE ratio: 4.77
Synchrony Financial (NYSE:SYF) operates as a consumer financial services company in the United States. It provides credit products, such as credit cards, commercial credit products, and consumer installment loans. By the end of the fourth quarter of 2021, Synchrony Financial (NYSE:SYF) was a part of 34 hedge fund portfolios. The total stakes of these funds in the company were valued at $1.38 billion, up from $1.37 billion in the previous quarter with 35 positions.
Barclays analyst Mark DeVries raised his price target on Synchrony Financial (NYSE:SYF) to $64, up from $63, and maintained an Overweight rating on the shares.
On 28 January 2022, Synchrony Financial (NYSE:SYF) released its earnings for the fiscal fourth quarter of 2021 for which the company beat on revenue. The company reported earnings per share of $1.34 and generated revenues that amounted to $2.37 billion, beating revenue estimates by $131.42 million.
Soros Fund Management’s stakes in Synchrony Financial (NYSE:SYF) equated to $8.71 million at the close of the fourth quarter of 2021. The investment covers 0.11% of the fund’s portfolio. Other popular stock picks of billionaire investor George Soros include Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG), and Liberty Broadband Corporation (NASDAQ:LBRDA).
9. CI Financial Corp. (NYSE:CIXX)
Soros Fund Management’s Stake Value: $9,188,000
Percentage of Soros Fund Management’s 13F Portfolio: 0.12%
Number of Hedge Fund Holders: 17
PE ratio: 9.99
This February, CI Financial Corp. (NYSE:CIXX) announced its plans to acquire Corient Capital Partners. Corient Capital Partners is a wealth management firm that is managing over $5 billion of wealthy individuals and families all over the United States. The acquisition is expected to be completed by the second quarter of 2022.
On February 25, 2022, CI Financial Corp. (NYSE:CIXX) announced that its board of directors had declared a quarterly cash dividend of $0.18 per share, up 26.8% from the prior dividend of $0.14. The stock’s forward yield at the time was 4.42%, and its trailing-twelve-month yield as of 14 March 2022 sits at 3.61%. The dividend is payable on July 15, 2022, to shareholders of record on June 30, 2022.
CI Financial Corp. (NYSE:CIXX) is steadily gaining popularity among investors circles. By the end of the fourth quarter of 2021, 17 hedge funds held stakes in the company that amounted to $203.69 million. This is compared to 13 positions in the third quarter of 2021 when stakes were valued at $186.29 million. It can be concluded that the hedge fund sentiment around CI Financial Corp. (NYSE:CIXX) is positive.
8. Lithia Motors, Inc. (NYSE:LAD)
Soros Fund Management’s Stake Value: $10,557,000
Percentage of Soros Fund Management’s 13F Portfolio: 0.14%
Number of Hedge Fund Holders: 56
PE ratio: 8.76
Lithia Motors, Inc. (NYSE:LAD) operates as an automotive retailer in the United States, primarily operating through the Domestic, Import, and Luxury segments. This February, Wells Fargo analyst Colin Langan raised his price target on Lithia Motors, Inc. (NYSE:LAD) to $362, up from $345, and reiterated an Overweight rating on the shares in light of the company’s fourth-quarter earnings for 2021.
On February 9, 2022, Lithia Motors, Inc. (NYSE:LAD) reported fourth-quarter 2021 earnings for which the company beat estimates. The company reported earnings per share of $11.39, beating estimates by $1.33. Lithia Motors, Inc. (NYSE:LAD) announced that its revenue for the quarter was $6.31 billion, up 60.07% year over year from $3.94 billion, and above revenue estimates by $155.99 million. Moreover, the stock has gained 7.51% year to date.
Lithia Motors, Inc. (NYSE:LAD) was spotted on 56 hedge fund portfolios at the close of the fourth quarter of 2021. The total value of these stakes was in excess of $2.62 billion. Soros Fund Management was one of the hedge funds of these 56, having stakes in the company worth over $10.55 million. The investment accounts for 0.14% of the funds Q4 2021 investment portfolio.
Along with Lithia Motors, Inc. (NYSE:LAD), Soros Fund Management holds significant stakes in Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG), and Liberty Broadband Corporation (NASDAQ:LBRDA).
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: 41
PE ratio: 9.91
This February, Shell plc (NYSE:SHEL) released earnings for the fiscal fourth quarter of 2021 in which the company beat on both EPS and revenue. The company’s EPS for the quarter was recorded at $1.66, beating expert estimates by $0.41. Shell plc’s (NYSE:SHEL) revenue has grown 93.87% year over year and came out at $85.28 billion, beating revenue estimates by $26.62 billion. On top of this, the stock has gained 22% over the past six months.
This March, JPMorgan analyst Christyan Malek raised her price target on Shell plc (NYSE:SHEL) to 2,600 GBP from 2,500 GBP and maintained an Overweight rating on the shares.
Insider Monkey identified Shell plc (NYSE:SHEL) to be a part of 41 investment portfolios by the end of the fourth quarter of 2021. The total stake of these funds in the company was valued at $2.63 billion, up from $2.05 billion in the third quarter of 2021, when Shell plc (NYSE:SHEL) was present of 33 hedge fund portfolios.
Here’s what Goehring & Rozencwajg Associates, an investment management firm, had to say about the stock for 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 plc (NYSE:SHEL) 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 is has already promised, sell assets, and prioritize return of cash to shareholder which can be reallocated into low-carbon areas of the market.”
Shell plc (NYSE:SHEL) 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 plc (NYSE:SHEL)’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 plc (NYSE:SHEL)’s oil and natural gas production would collapse – something that may have already started.”
6. BGC Partners, Inc. (NASDAQ:BGCP)
Soros Fund Management’s Stake Value: $14,495,000
Percentage of Soros Fund Management’s 13F Portfolio: 0.19%
Number of Hedge Fund Holders: 26
PE ratio: 13.23
BGC Partners, Inc. (NASDAQ:BGCP) operates as a financial brokerage and technology company, headquartered in New York. The company has operations in the United States, France, other Europe, the United Kingdom, other Americas, Asia, Australia, Africa, and the Middle East.
At the close of the fourth quarter of 2021, 26 hedge funds held stakes in BGC Partners, Inc. (NASDAQ:BGCP), up from 23 positions in the previous quarter. The total value of these stakes was in excess of $314.92 million. Soros Fund Management’s stake in BGC Partners, Inc. (NASDAQ:BGCP) was valued at $14.49 million. The investment accounts for 0.19% of the fund’s fourth-quarter 2021 investment portfolio.
This February, Credit Suisse analyst Gautam Sawant initiated coverage of BGC Partners, Inc. (NASDAQ:BGCP), giving the stock a $7 price target and an Outperform rating.
5. Academy Sports and Outdoors, Inc. (NASDAQ:ASO)
Soros Fund Management’s Stake Value: $15,080,000
Percentage of Soros Fund Management’s 13F Portfolio: 0.2%
Number of Hedge Fund Holders: 47
PE ratio: 4.86
Academy Sports and Outdoors, Inc. (NASDAQ:ASO) operates as a sporting goods and outdoor recreational products retailer in the United States. This March, it was announced that Academy Sports and Outdoors, Inc. (NASDAQ:ASO) would replace Kraton (NYSE:KRA) in the S&P SmallCap 600, since DL Chemical will be acquiring Kraton (NYSE:KRA) on March 15, 2022.
Last December, Goldman Sachs analyst Kate McShane raised her price target on Academy Sports and Outdoors, Inc. (NASDAQ:ASO) and upgraded the stock to Buy from Neutral. Moreover, the stock has gained 35.96% over the past twelve months.
Academy Sports and Outdoors, Inc. (NASDAQ:ASO) has been popular among investor circles lately. By the end of the fourth quarter of 2021, 47 hedge funds were identified that held stakes in the company, worth in excess of $964.98 million.
4. OneMain Holdings, Inc. (NYSE:OMF)
Soros Fund Management’s Stake Value: $16,560,000
Percentage of Soros Fund Management’s 13F Portfolio: 0.22%
Number of Hedge Fund Holders: 44
PE ratio: 4.35
By the close of the fourth quarter of 2021, 44 hedge funds held stakes in OneMain Holdings, Inc. (NYSE:OMF) worth $1.02 billion. This is compared to 41 hedge funds in the previous quarter with stakes worth $1.04 billion. Soros Fund Management’s stake in the company was valued at $16.56 million by the end of Q4 2021. The investment covers 0.22% of the fund’s 13F portfolio.
On December 2, 2021, Seaport Global analyst Bill Ryan initiated coverage of OneMain Holdings, Inc. (NYSE:OMF) with a Neutral rating and no price target.
This February, OneMain Holdings, Inc. (NYSE:OMF) declared a quarterly cash dividend of $0.95 per share quarterly up 35.7% from the prior dividend of $0.70 per share. The stock had a forward yield of 7.3% at the time, and as of March 13, 2022, the stock’s dividend yield sits at 8.85%.
On February 2, 2022, OneMain Holdings, Inc. (NYSE:OMF) released earnings for the fiscal fourth quarter of 2021, in which the company beat on EPS by $0.03. The company reported earnings per share of $2.38 and generated revenues amounting to $1.02 billion, up 3.44% year over year from $987 million.
Miller Value Partners, an investment management firm, shared its insights on OneMain Holdings, Inc. (NYSE:OMF) in its fourth-quarter 2021 investor letter. Here’s what the experts at Miller Value had to say:
“OneMain Holdings (OMF) dropped 8.4% over the period. The company reported Q3 EPS of $2.37, +9% Y/Y and ahead of consensus of $2.30 driven by interest income of $1.1Bn and a portfolio yield of 23.77%. Originations of $3.9Bn rose +34% Y/Y, driving end of period receivables to $18.9Bn while net charge-offs of 3.5% improved 167bps. Management maintained FY21 strategic priorities, including managed receivables growth of 8%-10%, a stable yield (>24%), and net charge-offs of 4.2%. Additionally, the company repurchased $100M of stock as part of Apollo Global Management’s 10.01M secondary offering while also increasing their current buyback authorization to $300M (from $200M).”
3. Ally Financial Inc. (NYSE:ALLY)
Soros Fund Management’s Stake Value: $32,894,000
Percentage of Soros Fund Management’s 13F Portfolio: 0.45%
Number of Hedge Fund Holders: 90
PE ratio: 5.03
Ally Financial Inc. (NYSE:ALLY) operates as a digital financial services company that provides various digital financial products and services to consumer, commercial, and corporate customers. The company’s primary operations target the United States and Canada markets.
This January, Ally Financial Inc. (NYSE:ALLY) raised its dividend by 20% to $0.30 per share from the prior dividend of $0.25. The company also announced a $2.0 billion share buyback program which will continue till December 31, 2022. The company recently completed its share repurchase program in 2021 and is expected to repurchase further shares in the first quarter of 2022.
This January, Ally Financial Inc. (NYSE:ALLY) released its earnings for the fiscal fourth quarter of 2021. The company reported earnings per share of $2.02, beating estimates by $0.05. The company’s revenue grew by 11% year over year and came out to $2.20 billion, beating estimates by $136.98 million.
There were 90 hedge funds found in Insider Monkey’s database that held stakes in Ally Financial Inc. (NYSE:ALLY) at the end of the fourth quarter of 2021. The total value of these stakes came to $7.13 billion, up from $6.41 billion in the prior quarter with 77 positions. The hedge fund sentiment around the stock is therefore positive.
2. General Motors Company (NYSE:GM)
Soros Fund Management’s Stake Value: $50,422,000
Percentage of Soros Fund Management’s 13F Portfolio: 0.68%
Number of Hedge Fund Holders: 90
PE ratio: 6.20
This February General Motors Company (NYSE:GM) released earnings data for the fiscal fourth quarter of 2021. The company’s earnings per share for the quarter were valued at $1.35, beating expert EPS estimates by $0.20, and the company generated $33.58 billion in quarterly revenues.
On February 2, 2022, RBC Capital analyst Joseph Spak raised his price target on General Motors Company (NYSE:GM) to $85 from $74 and reiterated an Outperform rating on the shares in light of the company’s strong Q4 2021 earnings.
General Motors Company (NYSE:GM) has always been an investors’ favorite. As of the fourth quarter of 2021, 90 hedge funds were found to have held stakes in the company. The total value of these stakes amounted to $7.13 billion. This is compared to 77 positions in the third quarter of 2021, with a total stake of $6.41 billion. Judging by these numbers, it is evident that the hedge fund sentiment for General Motors Company (NYSE:GM) is positive.
Here’s what RLT Capital had to say about General Motors Company (NYSE:GM) in its fourth-quarter 2021 investor letter:
“Despite my enthusiasm for GM’s competitive positioning in the years to come, it’s the decidedly unsexy legacy operations that keep GM’s cash registers ringing in the here and now. On that front, investor enthusiasm for the current manufacturing – and financing – of internal combustion engines remains pretty muted by most measures. And understandably so:
-GM’s operations are capital intensive,
-GM’s marketplace is highly competitive (and with excess capacity to boot),
-GM’s supply chain is super complex (e.g., semi shortage, tariffs, etc),
-GM’s labor force is (very) unionized,
-GM’s liabilities are aplenty and long-dated (e.g., warranties, recalls, lawsuits, etc),
-GM’s operations have ample – and unavoidable – commodity exposure (in both raw materials & the resulting impact on product demand/mix), and
-There’s no shortage of debt to consider.Although that hardly represents a comprehensive accounting of the risks that crowd GM’s disclosures, it’s more than sufficient to obscure the many positives to be found under GM’s hood. Of particular note is GM’s strong showing across seemingly every facet of the changes looming over the broader automotive industry:
-Internal Combustion Engines (ICE): If you think all the talk about electric and/or autonomous vehicles is either total hogwash or still decades into the future . . . GM’s legacy business has you covered. For as long as consumers continue to demand ICE powered vehicles, GM will capably meet said demand. In fact, despite the many headwinds faced by the entire automotive industry in 2021, GM still capably sold ~6.3 million vehicles, and generated ~$113.6 billion of automotive-related revenues…” (Click here to see the full text)
1. D.R. Horton, Inc. (NYSE:DHI)
Soros Fund Management’s Stake Value: $393,542,000
Percentage of Soros Fund Management’s 13F Portfolio: 5.38%
Number of Hedge Fund Holders: 54
PE ratio: 6.50
D.R. Horton, Inc. (NYSE:DHI) operates as a homebuilding company in the United States. On February 2, 2022, the company released earnings for the fiscal first quarter of 2022, in which the company beat on both EPS and revenue. The company’s earnings per share were reported to be $3.17, beating estimates by $0.37. D.R. Horton, Inc. (NYSE:DHI) generated revenues of over $7.05 billion, up 18.88% year over year from $5.93 billion, and beat revenue estimates by $330.48 million.
This January, D.R. Horton, Inc. (NYSE:DHI) was initiated at UBS by analyst John Lovallo with a Buy rating and $135 price target.
Out of the 924 elite hedge funds being tracked at Insider Monkey, 54 held stakes in D.R. Horton, Inc. (NYSE:DHI) at the close of the fourth quarter of 2021. The total value of these stakes amounted to $2.83 billion, up from $2.18 billion in the third quarter of 2021, when 51 hedge funds held stakes in the company.
D.R. Horton, Inc. (NYSE:DHI) is ranked third among Soros Fund Management’s top five 13F holdings for the fourth quarter of 2021. The fund’s stake in the company was valued at $393.54 million, which makes up 5.38% of its investment portfolio.
You can also take a look at George Soros’ Top 10 Stock Picks and 10 Best Undervalued Stocks to Buy Now According to Reddit.
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Disclosure. None. 10 Undervalued Stocks to Buy According to George Soros’ Hedge Fund is originally published on Insider Monkey.
