Legendary speculator and billionaire George Soros has returned to active trading after a long hiatus. The last time ‘the man who broke the Bank of England’ actively participated in the investment decision-making process at his family office, Soros Fund Management, was way back in 2007, when he placed bets against the housing market and made $1 billion in profits. According to the Wall Street Journal, one of the reasons that pushed Mr. Soros to become active in the markets again was the departure of Soros Fund Management’s former CIO, Scott Bessent, who left last year to start his own hedge fund. Over the last few months, Mr. Soros has been quite vocal about his bearishness on China and the repercussions that will result in the global economy due to the upheaval in the Chinese economy. He has also been taking large bets on gold and gold mining companies as a hedge against turmoil in the equities market. In this article we will take a look at five stocks that Soros Fund Management was buying shares of ahead of the second quarter and discuss how they have been performing of late.
Through extensive research, we determined that imitating some of the picks of hedge funds and other institutional investors can help generate market-beating returns over the long run. The key is to focus on the small-cap picks of these investors, since they are usually less followed by the broader market and are less price-efficient. Our backtests that covered the period between 1999 and 2012, showed that following the 15 most popular small-caps among hedge funds can help a retail investor beat the market by an average of 95 basis points per month (see more details here).
#5. Crown Castle International Corp (NYSE:CCI)
– Shares owned by Soros Fund Management (as of March 31): 354,519
– Value of holding (as of March 31): $30.66 Million
Let’s start with Crown Castle International Corp (NYSE:CCI), which Soros Fund Management initiated a stake in during the first quarter. Shares of the Texas-based real estate investment trust (REIT) have appreciated by 9.74% in 2016, with nearly all of those gains coming in the last two months. The REIT currently pays a quarterly dividend of $0.88 per share, which based on its current market price, translates into an attractive annual dividend yield of 3.75%. Soros Fund Management was one of many funds that initiated a stake in Crown Castle International Corp (NYSE:CCI) during the first quarter. During that period, the ownership of the REIT among the funds tracked by Insider Monkey increased to 47 from 38 and the aggregate value of their holdings in it also saw an increase of almost 10%. Funds that boosted their stake in Crown Castle International included Jim Simons‘ Renaissance Technologies, which upped its holding by 168% to 2.07 million shares.
#4. JD.Com Inc(ADR) (NASDAQ:JD)
– Shares owned by Soros Fund Management (as of March 31): 1.3 Million
– Value of holding (as of March 31): $34.36 Million
While Mr. Soros has been quite bearish on China, his family office increased its holding in Chinese e-commerce firm JD.Com Inc(ADR) (NASDAQ:JD) by 56% during the first quarter. Since the start of 2016, JD.Com Inc(ADR) (NASDAQ:JD) has lost nearly one-third of its market value. Shares of the company took a big hit on June 7 after a report published on SumZero called the company “wildly overpriced”. JD.Com Inc(ADR) reported mixed first quarter numbers recently. While the company’s loss of $0.02 per share was in-line with analysts’ consensus expectation, its revenue of $8.23 billion missed projections by nearly $40 million. Chase Coleman‘s Tiger Global Management reduced its stake in the company by 27% to 44.00 million shares during the first quarter.
Three more stocks that Soros Fund Management was buying during the first quarter are examined on the next page.