Hungarian-born George Soros is oft-known as “The Man Who Broke the Bank of England.” Though now retired, his investment style was categorized as global macro. Soros gained some notoriety when he shorted ~£10 billion on September 16, 1992, giving rise to the day’s name as “Black Wednesday.” Soros made an estimated $1.1 billion USD as the UK withdrew from the European Exchange Rate Mechanism causing the pound to devalue, resulting in his moniker. Five years later, the UK Treasury estimated the cost of Black Wednesday at £3.4 billion. When Soros made that massive bet, he was the chairman of Soros Fund Management, which he founded in 1969 and was the main advisor for the Quantum Funds. In 2000, the fund lost billions in technology stock investments, bringing its AUM down from $10 billion to $4 billion in a year. After that debacle, Soros Fund Management restructured, merging the Quantum Fund with the Quantum Emerging Growth Fund to form the Quantum Endowment Fund that would aim to lower risk and be less speculative. Last July, with nearly $28.0 billion in AUM, the fund returned ~$1 billion to investors to focus on family investments and avoid some hedge fund disclosure requirements that would be imposed by Dodd-Frank legislation.
Here are George Soros’ top holdings at the end of the first quarter:
|MICRON TECHNOLOGY INC||MU||829,819||2%|
|SPDR S & P 500 E T F TRUST||SPY||509,336||3116%|
|POWERSHARES QQQ TRUST||QQQ||294,856||New|
|J D S UNIPHASE CORP||JDSU||289,672||0.23|
|ADECOAGRO S A||AGRO||274,402||0%|
|SARA LEE CORP||SLE||159,234||697%|
|LUCENT TECHNOLOGIES INC.||155,499||New|
|DIGITAL RIVER INC||DRIV||146,665||New|
Some of Soros’ new additions to the portfolio that made it into the top 10 holdings include the Nasdaq 100 (QQQ), Lucent Technologies (549463), and Digital River (DRIV). Other new buys include CVR Energy (CVI), Chevron (NYSE:CVX), and Suntrust Banks (STI). He also added a considerable number of S&P 500 (SPY) and Sara Lee (NYSE:SLE) shares. With SLE implementing strategic initiatives such as the recently announced rebranding of its North American business to Hillshire Brands, we like SLE over competitors like Hain Celestial (NYSE:HAIN) and Bridgford Foods (BRID). SLE trades at 19.9x forward earnings and HAIN trades at 25.6x, (BRID is running a net loss so a P/E ratio is not applicable). Billionaires Dan Loeb and James Dinan are among the hedge fund managers with large positions in Sara Lee (see James Dinan’s favorite stocks).
The big news amongst mega-oil large caps is the fourth round of bidding for oil and gas exploration of new blocks in Iraq with the auctions run by The Iraqi central government. 39 foreign companies including Chevron (CVX) and British Petroleum (NYSE:BP) are participating. Exxon Mobil (NYSE:XOM) has been excluded due to its deal with the Kurdish Regional Government (KRG) to explore blocks in the region. Estimates indicate that that the blocks up for sale hold ~10 billion barrels of oil and ~29 trillion cubic feet of natural gas. We like mega-cap oil stocks. Chevron, BP, and Exxon all have single digit PE ratios. They will get cheaper if the slide in oil prices continue but they are attractive investments for long-term investors at this time. Soros Fund Management’s heaviest weighting goes to Technology at 7.3% followed by Oil & Gas and Consumer Goods at 5.7% apiece.