In this article, we discuss the 10 stocks that billionaire George Soros is buying.
George Soros, the Hungarian-born American billionaire who runs Soros Fund Management, one of the most successful hedge funds in the world, has been in the news recently after his spokesperson told news agency Reuters that the investor was supportive of a new plan to tax the unrealized market gains of billionaires based in the United States. The US is home to around 700 billionaires, the most in any part of the world, and House Democrats have pushed the proposal to help fund a massive infrastructure plan.
However, since the proposal was not very well-received, it was shelved from an already contentious social spending framework released by the White House in late October that is yet to be approved. When Soros is not stirring up controversy in political power circles, he is blowing away the finance world with his moves at the market. Latest 13F filings show that the portfolio value of his fund was $5.4 billion at the end of the third quarter of 2021, down from $5.9 billion at the end of the second quarter.
The billionaire, through his hedge fund, made new purchases in 76 stocks, additional purchases in 32, sold out of 83, and reduced holdings in 26 equities. The top ten holdings comprise over 50% of the total portfolio. Some of the top stocks include Amazon.com, Inc. (NASDAQ:AMZN), Activision Blizzard, Inc. (NASDAQ:ATVI), and Alphabet Inc. (NASDAQ:GOOG), among others discussed in detail below. Soros has a personal net worth of more than $8.5 billion, placing him among the 100 richest Americans.
Our Methodology
These were picked from the investment portfolio of Soros Fund Management at the end of the third quarter of 2021. Companies in which the fund increased stake by 50%, when compared to filings for the second quarter, were preferred.
The hedge fund sentiment around each stock was calculated using the data of 873 hedge funds tracked by Insider Monkey.
Billionaire George Soros Is Buying These Stocks
10. Airbnb, Inc. (NASDAQ:ABNB)
Number of Hedge Fund Holders: 58
Percentage Increase in Stake During Q3: 43%
Airbnb, Inc. (NASDAQ:ABNB) owns and operates an online travel and lodging platform. The stock has rallied in recent weeks after the firm reported a 70% year-on-year increase in quarterly revenue between June and September as pent-up travel and vacation demand resulted in a massive increase in bookings, a trend expected to last into the holiday season.
Latest data shows that Soros Fund Management owned 77,500 shares of Airbnb, Inc. at the end of the third quarter of 2021 worth $13 million, representing 0.24% of the portfolio.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in Airbnb, Inc. with 3.4 million shares worth more than $526 million.
In its Q2 2021 investor letter, Worm Capital LLC, an asset management firm, highlighted a few stocks and Airbnb, Inc. (NASDAQ:ABNB) was one of them. Here is what the fund said:
“Throughout the quarter, you may have noticed that we averaged into a significant position in Airbnb (ABNB). Though the stock has been a relative underperformer since its February highs, we are highly confident about the company’s prospects and its ability to generate meaningful compounded returns over time.
Some history: We have been following Airbnb’s journey for several years, long before the company went public earlier this year. (In fact, nine years ago, in November 2012, Eric profiled the company for Inc.: “Airbnb Is Changing Travel.”)
Whenever we underwrite a new investment, we look for a few key attributes that help us determine the potential long-term value of a business, as well as its risks. In particular, we focus on management (Are they founders? Do they have skin the game? Are they playing the long game?), addressable market size (How big is the opportunity?), its relative growth and creativity to expand (Are they constantly innovating to make the product better for their customers?), margin expansion (Where can we find operating leverage in the model?), its status in the industry (Are they the dominant player? Can they
take market share from incumbents?), business risks (What are we missing? Are customers dissatisfied? What do employees say?) and probably a dozen more elements that are critical to our process. It’s only then do we take out the pencils do the valuation work.
In short, ABNB fulfills pretty much every element of a business model we’re attracted to: First, it’s highly scalable marketplace-based business model that unites buyer and seller with observable flywheel effects. (This is an important observation, in that the platform creates significant economic value for millions of hosts who rely on Airbnb, which in turn attracts new hosts who identify the opportunity, which creates more inventory, which turn attracts more travelers, which attracts more hosts, and soon.) Second, it has a global focus with significant opportunities to expand its operating leverage; Third,
its management—which is still founder-led—stands out to us as long-term thinkers capable of handling crisis, which the team demonstrated throughout the pandemic by dropping operating costs and turning the business into a more efficient, lean organization. (Like Churchill said: “Never let a good crisis go to waste.”).”
9. Accenture plc (NYSE:ACN)
Number of Hedge Fund Holders: 52
Percentage Increase in Stake During Q3: 51%
Accenture plc (NYSE:ACN) is an Ireland-based professional services company. According to regulatory filings, Soros Fund Management owned 75,500 shares in the company at the end of September 2021 worth $24 million, representing 0.44% of the portfolio.
Barclays analyst Ramsey El-Assal recently kept an Overweight rating on Accenture plc (NYSE:ACN) stock and raised the price target to $384 from $335, appreciating the strong earnings of the firm in the fourth fiscal quarter.
Among the hedge funds being tracked by Insider Monkey, London-based investment firm Ako Capital is a leading shareholder in Accenture plc (NYSE:ACN) with 2.2 million shares worth more than $718 million.
8. Salesforce.com, Inc. (NYSE:CRM)
Number of Hedge Fund Holders: 108
Percentage Increase in Stake During Q3: 57%
Salesforce.com, Inc. (NYSE:CRM) provides enterprise cloud computing solutions. The company recently announced that it had signed a global strategic partnership with DocuSign, an electronic contract manager. As part of the deal, the two firms are set to develop artificial intelligence-based solutions to automate the contract process further.
The hedge fund of billionaire George Soros owned 111,000 shares of Salesforce.com, Inc. at the end of the third quarter of 2021 worth more than $30 million, representing 0.55% of the total portfolio.
Among the hedge funds being tracked by Insider Monkey, Washington-based investment firm Soros Fund Management is a leading shareholder in Salesforce.com, Inc. with 13.4 million shares worth more than $3.2 billion.
In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Salesforce.com, Inc. (NYSE:CRM) was one of them. Here is what the fund said:
“We added to our software-as-a-service (SaaS) exposure with the initiation of SaaS leader salesforce.com, which develops software for customer relationship management (we added Workday, which enterprise resource planning applications, last quarter). Saleforce.com is well-positioned in the most attractive end markets in software and will benefit from secular drivers such as remote work and the digital transformation. Salesforce.com is a sustainability leader as well, with a commitment to carbon-neutral cloud, toward which it has set a goal of 100% renewable energy for global operations by fiscal year 2022. The company has a strong focus on equality, in terms of equal rights, pay, education and opportunity. As a data company it has been leading on workforce disclosures and seeks to have 50% of its U.S. workforce made up of underrepresented groups by 2024.”
7. Eagle Materials Inc. (NYSE:EXP)
Number of Hedge Fund Holders: 36
Percentage Increase in Stake During Q3: 58%
Eagle Materials Inc. (NYSE:EXP) operates in the construction materials industry. Soros Fund Management owned 130,000 shares in the company at the end of September 2021 worth $17 million, representing 0.31% of the portfolio of the fund.
On October 26, investment advisory Citi maintained a Buy rating on Eagle Materials Inc. stock and raised the price target to $170 from $167, noting the successful passage of the infrastructure bill was a strong growth catalyst for the firm in the months ahead.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Anomaly Capital Management is a leading shareholder in Eagle Materials Inc. with 227,550 shares worth more than $29 million.
6. Snowflake Inc. (NYSE:SNOW)
Number of Hedge Fund Holders: 70
Percentage Increase in Stake During Q3: 74%
Snowflake Inc. (NYSE:SNOW) owns and runs a cloud-based data platform. The firm has recently unveiled new product features for businesses aimed at improving data sharing and interaction with customers. These features have been received well by analysts that have raised price targets on the stock following their release.
Latest securities filings reveal that Soros Fund Management owned 26,000 shares in Snowflake Inc. at the end of the third quarter of 2021 worth $7.8 million.
At the end of the second quarter of 2021, 70 hedge funds in the database of Insider Monkey held stakes worth $12.5 billion in Snowflake Inc., down from 71 in the preceding quarter worth $12.9 billion.
Here is what RiverPark Funds has to say about Snowflake Inc. (NYSE:SNOW) in its Q1 2021 investor letter:
“We also established a position in Snowflake during the quarter. Snowflake offers cloud-based data storage and analytics, generally termed “data warehouse-as-a-service.” The data warehousing market—created by the massive, growing amount of user, customer, and account data and the need to search and analyze it—has historically stored its data on physical servers located on-premises. The cloud data platform market—storing data off-premises on cloud servers—is a relatively new $70 billion+ market. Significantly, incremental warehouse data capacity and renewals are expected to be driven by and to the cloud, with more than 75% of databases in the cloud by 2022.
Snowflake requires absolutely no infrastructure management from its users, is fully scalable for each customer, runs on Amazon, Microsoft, or Google cloud platforms, and most critically, Snowflake helps companies analyze their data. The company also has a unique, customer-aligned billing model based on usage. All of which has led to Snowflake being among the leaders of this highly fragmented market, posting 124% revenue growth last year. SNOW’s growth comes from the combination of more customers—which grew 73% last year—and customers buying more services—the company boasts an amazing 150%+ net customer retention. The company’s growing scale has also led to increasing gross margin and operating leverage, up 1,100 basis points and 8,200 basis points, respectively, over the past two years. The company has guided to FCF break-even this year, and with the company’s capital expenditure-light model—Snowflake uses the public cloud for hosting—we expect FCF to grow much faster than revenue growth, which we forecast to grow comfortably more than 50% per year for the next several years. Additionally, we have great confidence in the SNOW management team, which previously had an enormously successful run guiding one of our other core Cloud software holdings ServiceNow.”
5. IHS Markit Ltd. (NYSE:INFO)
Number of Hedge Fund Holders: 61
Percentage Increase in Stake During Q3: 81%
IHS Markit Ltd. (NYSE:INFO) provides research and consulting services. Regulatory filings show that Soros Fund Management owned 2.4 million shares in the company at the end of the third quarter of 2021 worth over $284 million, representing 5.25% of the portfolio.
Deutsche Bank analyst Sameer Kalucha has a Buy rating on IHS Markit Ltd. stock with a price target of $127. The analyst recently appreciated the merger of the company with S&P Global, another market research firm.
At the end of the second quarter of 2021, 61 hedge funds in the database of Insider Monkey held stakes worth $5.9 billion in IHS Markit Ltd., up from 54 in the previous quarter worth $4 billion.
In its Q1 2021 investor letter, Artisan Partners, an asset management firm, highlighted a few stocks and IHS Markit Ltd. (NYSE:INFO) was one of them. Here is what the fund said:
“We ended our campaign in IHS Markit. IHS Markit is a global provider of information services to the financial services, automotive and energy sectors. Since beginning our investment campaign in 2009, we have been attracted to the company’s position relative to the meaningful secular tailwind driving demand for data and analytics to help guide business decisions. The company announced in Q4 it is merging with S&P Global, one of the largest credit ratings agencies globally and a provider of benchmarks, data and analytics to the global capital and commodities markets. We believe the combination provides a good level of cost and revenue synergies which will help drive profit growth, and S&P Global has a solid track record of acquiring and integrating new businesses. However, we exited our position as the combined entity will be well beyond our mid-cap market cap mandate.”
4. Nuance Communications, Inc. (NASDAQ:NUAN)
Number of Hedge Fund Holders: 72
Percentage Increase in Stake During Q3: 112%
Nuance Communications, Inc. (NASDAQ: NUAN) provides artificial intelligence services. Software giant Microsoft purchased the company back in June for $20 billion and has filed for European approval in this regard as well. Microsoft is one of the largest holdings of Soros and this is perhaps why the investor increased stake in Nuance ahead of the completion of the purchase.
According to the latest data, Soros Fund Management owned 2.8 million shares in Nuance Communications, Inc. at the end of September 2021 worth $156 million, representing 2.9% of the portfolio.
Among the hedge funds being tracked by Insider Monkey, New York-based firm Coatue Management is a leading shareholder in Nuance Communications, Inc. with 13 million shares worth more than $732 million.
In its Q2 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Nuance Communications, Inc. (NASDAQ:NUAN) was one of them. Here is what the fund said:
“In general, improving growth companies are taking specific actions to enhance their growth profiles going forward, whether through a restructuring, business model change, new management team or more productive use of assets. Another recent example is Nuance Communications, which was simplified and reorganized under new leadership in 2018 and subsequently acquired by Microsoft for a significant premium this quarter. This continues the Strategy’s long track record of positioning successfully to benefit from consolidation, with more than 80 companies having been acquired since inception.”
3. NIKE, Inc. (NYSE:NKE)
Number of Hedge Fund Holders: 67
Percentage Increase in Stake During Q3: 140%
NIKE, Inc. (NYSE:NKE) markets athletic footwear, apparel, equipment, and accessories. Securities filings show that Soros Fund Management owned 72,000 shares in the company at the end of the third quarter of 2021 worth $10.4 million, representing 0.19% of the portfolio.
NIKE, Inc. has an impressive dividend history and recently declared a quarterly dividend of $0.305 per share, an increase of close to 11% from the previous dividend of $0.275. The forward yield was 0.71%.
Among the hedge funds being tracked by Insider Monkey, London-based investment firm Fundsmith LLP is a leading shareholder in NIKE, Inc. with 8.7 million shares worth more than $1.3 billion.
In its Q4 2020 investor letter, Dynamo Cougar, an asset management firm, highlighted a few stocks and NIKE, Inc. (NYSE:NKE) was one of them. Here is what the fund said:
“Nike used to have a very traditional IT infrastructure, which was the starting point for their transformation. Back in 2013 the company had most of their IT in one data center and two distinct IT and software development teams. The infrastructure was organized in a way that all IT solutions, such as Nike.com and Nike apps, were running on the same servers and databases. The result was that any change had to be approved and then deployed with the next release. It was a very manual process, depended on a number of different vendors, and had to be approved by a waterfall process involving both the software and the IT teams. As of 2018, the company has four AWS regions, 150 software engineers, three development locations, and multiple data center locations. In the process, the company decided that they would not just lift and shift their existing applications from their own servers to the public cloud, but instead decided to rethink every single component of their IT organization. The results show that this transformation worked. The organization went from one software deployment every two months to 2.6 deployments per day. Nike went from 90% manual software testing to 100% automated testing, which freed up a lot of developer time. They managed to reduce the time to make small changes on the website and apps from 3 hours to 5 seconds, which means they could react to sports and similar live events. In the past it took more than six months to add a new experience to their digital services, and today it takes one day. In the past they would have a 3-month lead time for new hardware and today they can scale and deploy without any lead time.5 The IT infrastructure now supports 50+ commerce countries versus 6 in 2012, supports 25 languages versus 7, and enables the e-commerce site to access the inventory of 500+ retail stores.
The early move to the cloud and the willingness to adapt to the new environment also allowed Nike to benefit from some significant learnings. For instance, the company first used the Cassandra database when they moved to the cloud. However, due to many technical limitations, it would not allow them to scale for peak demand. Peak demand was becoming a big problem because the Nike SNKRS App would launch products with very limited availability, which meant that millions of people would access the app at the same time. Nike then decided to move to the AWS DynamoDB database (a platform offering), which allowed them to scale up prior to these launches, and thereby spend 98% less than with Cassandra, while offering the same service. In addition, they managed to monitor the launches in real time, which allowed them to react to problems and error messages within seconds. The vast amount of data that is generated within this very short period is now analyzed with machine learning techniques to improve the stability, reliability, and optimization of future launches. The company is working on a number of other efforts that benefit from the cloud environment, such as the implementation of RFID whose data output is managed through the AWS IoT offering.
The benefits of this transformation to the consumer are clear. Nike can now deal with higher demand, deal with sudden spikes in orders, offer better product recommendations, offer more customization, provide better product fulfillment, and more. In addition, the company benefits from a leaner and more efficient IT organization, better product conversion, more feedback data from customers, social integration into products, and ultimately a more satisfied costumer. We think Nike’s continued investment into their modern IT stack will be a key differentiator for their competitive positioning.”
2. Booking Holdings Inc. (NASDAQ:BKNG)
Number of Hedge Fund Holders: 100
Percentage Increase in Stake During Q3: 145%
Booking Holdings Inc. (NASDAQ:BKNG) provides online travel and restaurant reservation services. The company recently posted earnings for the third quarter, reporting earnings per share of $37.70, beating estimates by $4.67. The revenue over the period was $4.6 billion, up 77% year-on-year.
Soros Fund Management owned 4,404 shares in Booking Holdings Inc. at the end of September 2021 worth $10.45 million, representing 0.19% of the portfolio.
At the end of the second quarter of 2021, 100 hedge funds in the database of Insider Monkey held stakes worth $6.9 billion in Booking Holdings Inc., down from 103 in the previous quarter worth $6.8 billion.
In its Q2 2021 investor letter, Nelson Capital Management, an asset management firm, highlighted a few stocks and Booking Holdings Inc. (NASDAQ:BKNG) was one of them. Here is what the fund said:
“In the consumer discretionary sector, we trimmed pandemic winners in favor of companies we believe will outperform in a recovery period. Pent-up travel demand is another investment theme we believe will flourish, prompting us to buy a position in Booking Holdings (tkr: BKNG, see Featured Equity).”
1. Spotify Technology S.A. (NYSE:SPOT)
Number of Hedge Fund Holders: 48
Percentage Increase in Stake During Q3: 215%
Spotify Technology S.A. (NYSE:SPOT) provides audio streaming services. At the end of the third quarter of 2021, Soros Fund Management owned 31,500 shares in the company worth $7 million, representing 0.13% of the portfolio.
On October 28, investment advisory KeyBanc maintained an Overweight rating on Spotify Technology S.A. stock and raised the price target to $365 from $340, noting that ad-supported revenue and podcast trends for the firm were improving.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Tiger Global Management LLC is a leading shareholder in Spotify Technology S.A. with 3.1 shares worth more than $870 million.
In its Q4 2020 investor letter, Guardian Fund, an asset management firm, highlighted a few stocks and Spotify Technology S.A. (NYSE:SPOT) was one of them. Here is what the fund said:
“At the current share price, Spotify basically only represents a fraction of the value they will be able to unlock in the growing market of audio entertainment. The key for Spotify is to change a variable cost base into a fixed cost base just like Netflix has. As the market share of the big labels, measured by the daily hours of engagement of the big labels, is declining, Spotify will be able to adjust its business model and create enormous operational leverage meaning that profitability will grow faster than expenses.
The music catalogue is not the business model. The value lies in the machine learning that drives discovery and engagement, the original content from people like Michelle Obama, Kim Kardashian, and Joe Rogan, the data analytics and distribution for artists, the direct and social relations artists can have with fans through music and videos. We believe that Spotify will be worth at least five times more in 2030.”
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This article is originally published at Insider Monkey.
