In this article, we will look at 5 undervalued stocks to buy according to George Soros’ hedge fund, Soros Fund Management. If you wish to read about George Soros’ biography, his early-stage investment career, and his investment philosophy, you can go to 10 Undervalued Stocks to Buy According to George Soros’ Hedge Fund.
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.
