In this article we take a look at the best stocks to buy in 2024 based on billionaire George Soros’s hedge fund portfolio.
Billionaire George Soros has been one of the most active and divisive figures in the Wall Street. Often a right-wing target, the billionaire handed over the control of his $25 billion empire to his son Alexander Soros last year. The 93 year-old Hungarian American is known as the philosopher investor in the Wall Street, mainly due to his contributions to philosophy and his deep desire to leave his mark in the world of philosophy, which many believe he fulfilled thanks to his General Theory of Reflexivity for capital markets.
George Soros founded Soros Fund Management in 1970. Since its inception through 2010, the fund posted on average a 20% annual rate of return. A Wall Street Journal report earlier this year said that Soros Fund Management has posted a compound annual return of 13.5% over the past three years through June 30, 2023.
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George Soros in his book The New Paradigm of Financial Markets wrote a chapter titled “Autobiography of a Failed Philosopher” in which he talked in detail about how many, including his son and his biographer, started accepting the idea that Soros was a failed philosopher. Soros talks in detail about his childhood, his relationship with his father who at one point, according to Soros, lost all ambition in life and did not amass any wealth. A Jew by birth, Soros decided to come to the UK after the Nazi occupation of Hungary. Soros’ first interactions with philosophy started when he was impressed by the works of Karl Popper. But Soros’ dreams of creating a career in philosophy could not realize for several reasons, some of which he talks about in his book:
“I would have preferred to stay within the safe walls of academe—I even had a teaching assistant job prospect at the University of Michigan in Kalamazoo, but my grades were not good enough, and I was forced to go out into the real world. After several false starts, I ended up working as an arbitrage trader, first in London and then in New York.* At first I had to forget everything I had learned as a student in order to hold down my job, but eventually my college education came in very useful. In particular, I could apply my theory of reflexivity to establish a disequilibrium scenario or boom-bust pattern for financial markets. The rewarding part came when markets entered what I called far-from-equilibrium territory because that is when the generally accepted equilibrium models broke down.”
For this article we scanned Billionaire Soros’s Soros Fund Management’s Q1 portfolio and chose its top 9 stock picks. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
9. Uber Technologies Inc (NYSE:UBER)
Billionaire George Soros’s Q1’2024 Stake Value: $46,683,579
Billionaire George Soros’s hedge fund cut its stake in Uber Technologies Inc (NYSE:UBER) by 13% in the first quarter, ending the period with a $46.7 million stake in the ride-hailing company. Uber Technologies Inc (NYSE:UBER) reported Q1 results last month. Revenue in the quarter jumped 15.1% year over year to $10.13 billion, beating estimates by $40 million. Mobility revenue rose 30% during the quarter and delivery revenue was 4% higher, while freight revenue fell 4%. Uber bulls believe Uber Technologies Inc’s (NYSE:UBER) diversification across several segments protects it from volatility as growth in mobility sometimes offsets declines in other sectors and vice versa. Uber Technologies Inc (NYSE:UBER) is also expanding its delivery segment with partnerships and new features, with a goal to cut its reliance on the Mobility segment.
Uber Technologies Inc (NYSE:UBER) P/E stands at near 100, which is much higher than the industry median. However, given Uber Technologies Inc’s (NYSE:UBER) earnings are expected to grow 148.80% in 2025 on a YoY basis and revenue growth could come in at around 15%, the stock’s valuation isn’t outlandishly high. Based on its 2025 EPS estimate of $2.09, the stock is trading at 30X its earnings, which is justifiable given the growth estimates.
RiverPark Large Growth Fund stated the following regarding Uber Technologies, Inc. (NYSE:UBER) in its first quarter 2024 investor letter:
“Uber Technologies, Inc. (NYSE:UBER): UBER was a top contributor in the quarter following better than expected 4Q23 earnings and 1Q24 guidance. Gross bookings of $37.6 billion were up 22% year over year. Mobility gross bookings of $19.3 billion grew 29% over last year driven by a combination of product innovation and driver availability. Delivery gross bookings of $17 billion were up 19% from last year and continued to be strong throughout the quarter. 4Q Adjusted EBITDA of $1.3 billion, up $618 million year over year, was better than management’s guidance of $1.2 billion, and the company generated $768 million of free cash flow, up from a cash loss of $303 million last year. Management guided to continuing growth in 1Q Gross Bookings (20% growth) and Adjusted EBITDA (of $1.3 billion). The company hosted a well-received analyst day in February during which it guided to three year compounded annual growth rates for gross bookings of mid-to-high single digits and EBITDA of 30-40%, both above investor expectations. The company also guided to free cash flow conversion of 90% of EBITDA.
UBER remains the undisputed global leader in ride sharing, with a greater than 50% share in every major region in which it operates. The company is also a leader in food delivery, where it is number one or two in the more than 25 countries in which it operates. Moreover, after a history of losses, the company is now profitable, delivering expanding margins and substantial free cash flow. We view UBER as more than a ride sharing and food delivery service; we also see it as a global mobility platform with 142 million users (by comparison, Amazon Prime has 200 million members) and the ability to penetrate new markets of on-demand services, such as package and grocery delivery, travel, and hourly worker staffing. Given its $5.4 billion of unrestricted cash and $4.8 billion of investments, the company today has an enterprise value of $165 billion, indicating that UBER trades at 21x our estimates of next year’s free cash flow.”
8. Jacobs Solutions Inc (NYSE:J)
Billionaire George Soros’s Q1’2024 Stake Value: $53,936,017
Engineering solutions company Jacobs Solutions Inc (NYSE:J) is one of the notable stocks in billionaire George Soros’ Q1 portfolio. Soros’s fund owns a $54 million stake in Jacobs Solutions Inc (NYSE:J). In May Jacobs Solutions Inc (NYSE:J) reported second quarter results. Adjusted EPS in the period came in at $1.91, beating estimates by $0.05. Revenue in the quarter jumped 4.9% year over year to $4.3 billion, meeting estimates. Jacobs Solutions Inc (NYSE:J) plans to spin off its Critical Mission Solutions and Cyber & Intelligence Government Services business to focus more on infrastructure and sustainability business and expand margins. Analysts expect the company to see a 300bps margin expansion due to the spin-off.
Analysts are especially bullish on the company’s water business. During the first quarter, the company’s water business bookings jumped on a YoY basis. Jacobs’ Direct potable reuse (DPR) is gaining popularity in the US, Europe, Australia and Asia as it can send highly treated sewage water back into drinking water distributions. The company has won a $191 million project in Florida for a water reclamation facility.
As of the end of the first quarter of 2024, 34 hedge funds reported owning stakes in Jacobs Solutions Inc (NYSE:J). Jacobs Solutions shares have a forward P/E of 17.32, lower than the industry median of 18.66. Wall Street expects the company’s earnings to grow 10.00% next year and by 9.90% on a per-annum basis over the next five years. This makes Jacobs Solutions Inc (NYSE:J) an undervalued play. Jacobs is one of the best stocks to buy in 2024 according to Soros’s fund.
Madison Sustainable Equity Fund stated the following regarding Jacobs Solutions Inc. (NYSE:J) in its fourth quarter 2023 investor letter:
“Jacobs Solutions Inc. (NYSE:J) was down after missing earnings expectations and providing 2024 guidance below expectations. While revenue growth remains strong with high single digit growth, costs were higher than expected mostly related to the carrying cost of the upcoming spin of its government services business. We estimate that post the spin, Jacobs will have a higher growth rate and higher margin profile with an improved balance sheet.”
7. Booking Holdings Inc. (NASDAQ:BKNG)
Billionaire George Soros’s Q1’2024 Stake Value: $64,975,331
Booking Holdings Inc. (NASDAQ:BKNG) is one of the leaders in the online travel industry, where online travel market worldwide had gross travel revenues (GTV) of $546 Billion as of the end of 2023 and the market is expected to grow at a CAGR of 12% per year through to FY2032. Analysts believe Booking Holdings Inc. (NASDAQ:BKNG) is positioned well to ride the wave of the massive rise in online travel demand as people prefer to spend on experiences instead of stuff. During the first quarter, Booking Holdings Inc.’s (NASDAQ:BKNG) revenue jumped 17% year over year to $4.4 billion, while adjusted EBITDA was 53% YoY. EPS in the period saw a 67% jump. Room nights booked, a key metric for Booking.com, jumped 9% in the quarter to 300 million.
Amid Booking Holdings Inc.’s (NASDAQ:BKNG) investments in AI, partnerships, advertising revenue and expansion, analysts expect continued earnings growth. According to data from Yahoo Finance, Booking Holdings Inc.’s (NASDAQ:BKNG) earnings are expected to grow 17.20% next year and at 22% for the following five years on a per-annum basis. Despite the growth, Booking Holdings Inc. (NASDAQ:BKNG) shares are trading at 28 times their earnings, compared to the industry median of 18. Based on its 2025 EPS estimate, the stock is trading at a forward P/E of 18, which makes the stock’s valuation attractive. Booking is one of the best stocks to buy in 2024 according to Soros’s fund.
Wedgewood Partners stated the following regarding Booking Holdings Inc. (NASDAQ:BKNG) in its first quarter 2024 investor letter:
“Booking Holdings Inc. (NASDAQ:BKNG) contributed negatively to relative performance. The Company grew bookings on their platforms +16% and reported +22% growth in adjusted operating income during their fourth quarter of 2023. We think the market is cautious about the Company’s results for 2024 because they will be lapping very high levels of growth compared to those in 2023 (full year 2023 bookings growth +24%). However, Booking’s end markets continue to be quite healthy, outside of geographies affected by war because consumers still have plenty of wallet share to re-dedicate to travel compared to pre-COVID-19 numbers. We applaud the Company as they aggressively repurchase shares at valuation levels well below the market and peers. This should serve to compound our ownership in Booking’s business, which has exceptional pro2itability.”
6. Aramark (NYSE:ARMK)
Billionaire George Soros’s Q1’2024 Stake Value: $66,958,680
Billionaire George Soros’s fund increased its stake in food service and facilities services provider Aramark (NYSE:ARMK) by 298% in the first quarter of 2024, ending the period with a $67 million stake in Aramark (NYSE:ARMK).
Last month the company posted fiscal Q2 results. Adjusted EPS in the period came in at $0.29, beating estimates by $0.02. Revenue in the quarter jumped 7.4% year over year to $4.2 billion, missing estimates by $40 million. For full year the company is expecting revenue growth of 9% and adjusted EPS growth of 30% to 35%. Aramark (NYSE:ARMK) is also a dividend-paying stock, with a 1.14% dividend yield. The company has been consistently increasing its dividend each year since 2014. As of the end of March the stock’s dividend payout ratio is just 0.33, attractive when company to peers where the industry average payout ratio is 0.59. The stock is trading at 17x its 2025 EPS estimate, which is not much higher than the industry median of 16.1. Given the company’s EPS growth estimates and Wall Street’s expectations of earnings growth of 24% for the company in 2025, the stock looks attractively valued. Aramark is one of the best stocks to buy in 2024 according to Soros’s fund.
Artisan Select Equity Fund made the following comment about Aramark (NYSE:ARMK) in its Q3 2023 investor letter:
“Aramark (NYSE:ARMK) was our weakest performer this quarter. The company reported strong Q2 results. Revenue grew 15%, and operating margins expanded. Both the contract catering and uniforms divisions showed good progress, and the company raised its guidance for the year. We suspect the share price performed poorly for a couple of reasons. First, the company has a fair bit of debt, and interest expense will increase if the debt is refinanced at today’s higher rates rather than paid down. However, the company is focused on debt reduction and does not pay a large dividend, giving it ample resources to pay down its debt. Second, the company spun off its uniform business to shareholders at the end of the quarter. This business is more cyclical than the catering business, and it came to market with a high degree of financial leverage. With fears around a recession, we believe investors steered clear of Aramark for lack of interest in the uniform business. We immediately sold our shares in the uniform business, Vestis, given its cyclicality and leverage. As of this writing, Vestis’ shares were down more than 20%.”
5. CRH Plc (NYSE:CRH)
Billionaire George Soros’s Q1’2024 Stake Value: $68,278,672
Building materials company CRH Plc (NYSE:CRH) ranks fifth on our list of the best stocks to buy in 2024 according to billionaire George Soros. While the billionaire’s fund cut its stake in CRH Plc (NYSE:CRH) by 46% in the first quarter, it still owns a $68 million stake in CRH Plc (NYSE:CRH). CRH Plc (NYSE:CRH) accounts for about 1.13% of the total portfolio of Soros Fund Management. Operating in 29 countries, CRH Plc (NYSE:CRH) is on an acquisition spree to expand more. CRH Plc (NYSE:CRH) is expected to spend $4 billion on acquisitions in 2024 and invest $1 billion in growth capital expenditure. CRH Plc (NYSE:CRH) is also a great stock in terms of shareholder value. CRH Plc’s (NYSE:CRH) share buybacks are expected to be around $1.2 billion in 2024, including the recently announced $300 million for Q2. CRH Plc (NYSE:CRH) has been paying dividends consistently since 2018. Analysts believe CRH Plc (NYSE:CRH) is poised to benefit from the huge infrastructure spending and housing projects in the US in the coming years, irrespective of the outcome of the election. CRH Plc’s (NYSE:CRH) EBITDA margin over the past ten years doubled from 9% to 18%, while FCF has grown at a CAGR of 13%. CRH Plc’s (NYSE:CRH) forward P/E is around 14, lower than the industry median of 15.6. CRH Plc’s (NYSE:CRH) earnings are expected to grow about 10% YoY next year and at 10.27% over the next five years on a per-annum basis. CRH Plc’s (NYSE:CRH) sales are expected to rise by 5.5% in 2025. Based on this growth and low P/E ratio, CRH is an undervalued dividend-paying stock.
L1 Long Short Fund stated the following regarding CRH plc (NYSE:CRH) in its first quarter 2024 investor letter:
“CRH plc (NYSE:CRH) (Long +25%) shares continued to rally strongly after the company delivered strong Q4 FY23 numbers and provided FY24 guidance ~5% ahead of consensus expectations. The company is a significant beneficiary of the exceptional growth in U.S. infrastructure spending which will underpin many years of robust demand. The Infrastructure Investment and Jobs Act (‘IIJA’), Inflation Reduction Act (‘IRA’) and the Chips and Science Act will together add roughly US$2 trillion in investment to ageing U.S. infrastructure. These market tailwinds, together with CRH’s ability to drive value-accretive M&A, position the company to deliver consistent double-digit earnings growth over the medium term.”
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