In this article, we discuss the top 10 large-cap stock picks from George Soros’ stock portfolio.
George Soros, a Hungarian-American businessman, founded Soros Fund Management in 1970. Soros Fund Management is a New York-based hedge fund which carved its place as one of the most profitable funds on Wall Street, however, it is now structured as a family office. The George Soros stock portfolio is worth $5.6 billion as of the second quarter of 2022, and the billionaire makes highly leveraged investments keeping in mind the currency movements and commodity prices, as well as fundamental macroeconomic and market analysis. The condition of the housing market also plays an important role in his investment decisions. Soros tends to invest in large-cap, small-cap, exchange traded funds, and both growth and value plays.
Large-cap stocks are usually perceived as less risky. These tend to be companies that are very stable and dominate their respective sectors, with market capitalization ranging from $10 billion to $200 billion. These prominent firms have fortress balance sheets and the ability to withstand market volatility. Large-cap companies also usually return a percentage of their profits to shareholders as dividends, which helps investors navigate a downturn in the economy relatively better. Some of the best large-cap stocks in the George Soros stock portfolio are Salesforce, Inc. (NYSE:CRM), NIKE, Inc. (NYSE:NKE), and Intuit Inc. (NASDAQ:INTU).
Our Methodology
We selected the top large-cap stock picks from George Soros’ stock portfolio as of the end of the second quarter of 2022 for this analysis. Insider Monkey’s database of 895 elite hedge funds tracked as of the end of the second quarter of 2022 was used to assess the hedge fund sentiment around the securities.
George Soros Stock Portfolio: Top Large-Cap Stock Picks
10. Liberty Broadband Corporation (NASDAQ:LBRDA)
Number of Hedge Fund Holders: 27
Liberty Broadband Corporation (NASDAQ:LBRDA) is a Colorado-based communications company that provides a range of wireless, data, video, voice, and managed services to residential customers, businesses, government entities, and educational and medical institutions. In Q2 2022, the George Soros stock portfolio had 1.75 million shares of Liberty Broadband Corporation, worth $202.35 million and representing 3.6% of the total 13F securities. Liberty Broadband Corporation has been part of the Soros portfolio since the second quarter of 2016.
On May 10, Deutsche Bank analyst Bryan Kraft maintained a Buy recommendation on Liberty Broadband Corporation but lowered the firm’s price target on the shares to $158 from $196.
According to Insider Monkey’s second quarter database, Liberty Broadband Corporation was part of 27 public stock portfolios, compared to 26 in the prior quarter. Boykin Curry’s Eagle Capital Management held the leading position in the company, comprising 8.30 million shares worth $960.2 million.
Like Salesforce, Inc., NIKE, Inc., and Intuit Inc., Liberty Broadband Corporation is one of the top large-cap picks from the George Soros stock portfolio.
Alphyn Capital made the following comment about Liberty Broadband Corporation in its Q3 2022 investor letter:
“In retrospect, I wish I had cut the position in Liberty Broadband Corporation more aggressively last quarter. Fears of fixed wireless and fiber competition have weighed heavily on Charter and Liberty’s share prices. Tom Rutledge’s unexpected early retirement from the CEO role has not helped matters.
I believe the sentiment is now overly pessimistic, and the valuation once again attractive. Revenue growth from broadband ads will likely stall as fixed wireless access programs take a bite out of cable subscribers over the next five years. 4 However, Charter has a fast-growing mobile phone business through an MVNO (mobile virtual network operator) agreement with Verizon. Given its cost-effective access to Verizon’s mobile telephony infrastructure, it provides a branded mobile phone service to retail customers at competitive rates. For example, Unlimited pricing starts at $29.99/month, including taxes and fees, vs. $35-55/month plus taxes and fees for Verizon’s plans.
Wireless generates approximately $725m in revenues for Charter per quarter, around 6% of the total, and is growing 40% per year. Should this continue, Wireless could return Charter to mid-single-digit revenue growth and “drive meaningful EBITDA for Charter,” as revenues scale over a low cost base. With approximately 25m non-Charter potential wireless customers within the area it serves, there is plenty of room for growth.”
9. Rivian Automotive, Inc. (NASDAQ:RIVN)
Number of Hedge Fund Holders: 35
Rivian Automotive, Inc. (NASDAQ:RIVN) is a California-based company that designs, develops, manufactures, and sells electric vehicles and related accessories. Rivian Automotive, Inc. is the largest holding in the George Soros stock portfolio, with 17.8 million shares worth $459 million, representing 8.17% of the total securities. Soros Fund Management added Rivian Automotive, Inc. to its portfolio in the last quarter of 2021.
On October 11, after a conversation with the management, Mizuho analyst Vijay Rakesh said that Rivian Automotive, Inc.’s vehicle recall is “relatively minor” and that its manufacturing lines have already been updated. He believes Rivian Automotive, Inc. has seen the issue on “less than 1%” of vehicles and the company forecasts the cost of fixing the recall to be “minimal”. The analyst noted that the headlines are “worse than reality” and maintained a Buy rating on the shares with a $65 price target.
Among the hedge funds tracked by Insider Monkey, 35 funds reported owning stakes worth $1.6 billion in Rivian Automotive, Inc. at the end of Q2 2022, compared to 29 funds in the prior quarter worth $4 billion. Philippe Laffont’s Coatue Management is the biggest position holder in the company, with 18.8 million shares worth $486 million.
Here is what Baron Fifth Avenue Growth Fund has to say about Rivian Automotive, Inc. in its Q2 2022 investor letter:
“Rivian Automotive, Inc. designs, manufactures, and sells consumer and commercial electric vehicles. Shares of Rivian declined 48.2% in the second quarter as investors continued rotating out of long-duration assets and have become increasingly concerned about capital intensity and cash burn.
At the same time, Rivian continues to be impacted by supply chain issues which are causing delays in its production ramp. Rivian is addressing those challenges by diversifying its supply chain to alleviate shortages while also consolidating the number of variants in development to reduce cash burn (the company guided that current cash will be enough to support the company’s future platform launch ‘R2’ in 2025). Rivian recently reported stronger-than-expected second quarter production numbers while reiterating its annual guidance of producing 25,000 units.
As semiconductor shortages ease, we believe that the company will be able to rapidly ramp its production. We retain conviction in the shares given management’s vision, Rivian’s product positioning, the company’s relationship with Amazon.com, and its strong balance sheet. As of the end of the first quarter, Rivian had $17 billion of cash and cash equivalents, which will help it overcome the current challenges while taking advantage of the long-term opportunity as the market transitions to electric vehicles.”
8. Aptiv PLC (NYSE:APTV)
Number of Hedge Fund Holders: 43
Aptiv PLC (NYSE:APTV) was founded in 2011 and is based in Dublin, Ireland. The company manufactures and sells electrical, electronic, and safety technology solutions to the automotive and commercial vehicle markets worldwide. In the second quarter of 2022, the George Soros stock portfolio lifted its Aptiv PLC stake by 1%, holding 246,055 shares worth nearly $22 million. The stock has been part of the Soros portfolio since Q2 2020.
On September 28, Berenberg analyst Jared Maymon assumed coverage of Aptiv PLC with a Buy rating and a $130 price target. The analyst noted that content per vehicle is increasing and Aptiv PLC is gaining share. He believes Aptiv PLC is well positioned to capture a significant share of an expanded total addressable market in the long term.
According to Insider Monkey’s data, 43 hedge funds were long Aptiv PLC at the end of June 2022, compared to 48 funds in the earlier quarter. Ian Simm’s Impax Asset Management is the largest stakeholder of the company, with 4.6 million shares worth $417 million.
Here is what ClearBridge Investments Sustainability Leaders Strategy has to say about Aptiv PLC in its Q1 2022 investor letter:
“The acceleration in electrification of transport should support electric vehicle (EV)-related stocks like Aptiv, which came under pressure in the quarter on concerns the auto cycle is past its peak. Aptiv provides a range of solutions for the auto industry, including autonomous driving technologies, safety technologies, components, and wiring. The large exposure of APTV to EVs should lead to long-term value as EVs continue their growth, boosted by their relative attractiveness as prices at the pump hit near-historic highs.”
7. D.R. Horton, Inc. (NYSE:DHI)
Number of Hedge Fund Holders: 44
D.R. Horton, Inc. (NYSE:DHI) is a Texas-based homebuilding company that constructs and sells residential homes under the D.R. Horton, America’s Builder, Express Homes, Emerald Homes, and Freedom Homes brands. In Q2 2022, the George Soros stock portfolio featured nearly 3 million shares of D.R. Horton, Inc., worth $197 million and representing 3.5% of the total holdings.
Raymond James analyst Buck Horne on October 21 downgraded D.R. Horton, Inc. to Outperform from Strong Buy with a price target of $77, down from $103. The downgrade factors in the analyst’s more concerned outlook on the housing market as mortgage rates have driven affordability to uncharted highs. However, he remains constructive on D.R. Horton, Inc. in this environment as the sector’s most cost-efficient producer of single-family housing.
Among the hedge funds tracked by Insider Monkey, D.R. Horton, Inc. was part of 44 public stock portfolios at the end of June 2022, compared to 52 in the last quarter. John Armitage’s Egerton Capital Limited is the leading position holder in the company, with 7.6 million shares worth $504 million.
Here is what Third Avenue Management specifically said about D.R. Horton, Inc. in its Q2 2022 investor letter:
“D.R. Horton, Inc. is the largest homebuilder in the US by volume (the company sold more than 90k homes in the past year) with a well-recognized focus on delivering quality product at the entry-level price point (its average selling price is less than $400k) and market-leading positions in key Sunbelt markets.
While the near-term outlook for DR Horton remains uncertain given the adjustments occurring in the US residential markets, the medium-to-long-term prospects for volume-based homebuilders with super-strong balance sheets and scale advantages continue to be promising in Fund Management’s view. More specifically, (i) residential inventories remain around record-low levels in most major markets when gauged by aggregate units available (see chart below), (ii) demand for single-family residences seem to have multiple secular drivers as the largest generation in US history (the “millennial cohort”) enters its prime home buying years and desires more space not only due to “life events” but also “remote” and “hybrid” working arrangements, and (iii) significant inflation in rental rates for multi-family units in urban areas has left the rent-to-own proposition for single-family homes in suburban areas in a compelling range (particularly in the Sunbelt region which is experiencing outsized job growth and wage growth relative to broader national figures).
In Fund Management’s view, the two industry participants that seem most likely to take part in this shift include DR Horton and Lennar Corp. (a long-held position in the Fund). In conjunction, these two “blue-chip builders” now account for approximately 10% of the Fund’s capital, as well as roughly one out of every five new homes built in the Sunbelt. They would also qualify under Third Avenue Founder Marty Whitman’s “Safe and Cheap” maxim as both companies are nearly “net-cash” (i.e., more cash than debt) with common stocks trading at less than five times trailing earnings, on average.”
6. Accenture plc (NYSE:ACN)
Number of Hedge Fund Holders: 61
Accenture plc (NYSE:ACN) is an American-Irish professional services company, providing technology support, application modernization, enterprise architecture, software and quality engineering, data management, intelligent automation comprises robotic process automation, and natural language processing, among others. Securities filings for the second quarter of 2022 reveal that Soros Fund Management held 119,862 shares of Accenture plc (NYSE:ACN), worth $33.2 million and representing 0.59% of the total portfolio. The hedge fund strengthened its hold on the stock by 4% in Q2 2022.
On September 22, Accenture plc (NYSE:ACN) declared a $1.12 per share quarterly dividend, a 15.5% increase from its prior dividend of $0.97. The dividend is payable to shareholders on November 15. The company’s board has also approved $3 billion in additional share repurchase authorization, bringing total outstanding repurchase authorization to approximately $6.1 billion.
JPMorgan analyst Tien-tsin Huang on October 14 and reiterated an Overweight rating on Accenture plc (NYSE:ACN) but lowered the firm’s price target on the shares to $306 from $329. The analyst revised estimates down to reflect currency headwinds.
Among the hedge funds tracked by Insider Monkey, Accenture plc (NYSE:ACN) was part of 61 public stock portfolios at the end of Q2 2022, compared to 63 in the last quarter. Nicolai Tangen’s Ako Capital is the biggest position holder in the company, with 2.3 million shares worth $636 million.
In addition to Salesforce, Inc., NIKE, Inc., and Intuit Inc., Accenture plc (NYSE:ACN) is one of the premier large-cap stock picks of billionaire George Soros.
Here is what Baron Durable Advantage Fund has to say about Accenture plc (NYSE:ACN) in its Q2 2022 investor letter:
“Accenture plc provides consulting and technology services to corporate clients worldwide. Quarterly financial results exceeded Street expectations with 22% revenue growth and 23% operating income growth. However, shares fell 17.5% during the quarter due to adverse foreign currency movements weighing on next quarter’s guidance and investor concerns about macroeconomic uncertainty impacting client demand. We believe demand for Accenture’s services will be resilient over the long term and the company will continue gaining share in a large global market helping its clients digitally transform.”
5. QUALCOMM Incorporated (NASDAQ:QCOM)
Number of Hedge Fund Holders: 71
QUALCOMM Incorporated (NASDAQ:QCOM) is a California-based company specializing in the development and commercialization of foundational technologies for the wireless industry worldwide. As of Q2 2022, the George Soros stock portfolio holds 229,582 shares of QUALCOMM Incorporated worth $29.3 million. The hedge fund strengthened its hold on the stock by 49% in the June quarter.
On November 2, QUALCOMM Incorporated reported a FQ4 non-GAAP EPS of $3.13, in line with market consensus. The revenue of $11.4 billion climbed 22.1% year-over-year, outperforming Street estimates by $40 million. There has been an inventory surplus in the semiconductor sector, given a quick deterioration in demand and the easing of supply constraints. The company now expects a Q1 FY2023 revenue of $9.2 billion to $10 billion, versus a consensus revenue estimate of $12.05 billion. QUALCOMM Incorporated forecasts a Q1 non-GAAP EPS of $2.25-$2.45, compared to a consensus EPS estimate of $3.43.
HSBC analyst Frank Lee on October 24 initiated coverage of QUALCOMM Incorporated with a Buy rating and a $180 price target. QUALCOMM Incorporated has “the most complete technology offering of any chip maker,” especially in modems and radio frequency front end connectivity chips, the analyst told investors. He believes this will allow QUALCOMM Incorporated to enhance its product portfolio beyond the weak smartphone segment into autos and internet-connected devices.
According to Insider Monkey’s Q2 data, 71 hedge funds were bullish on QUALCOMM Incorporated, compared to 73 funds in the prior quarter. Alkeon Capital Management is a prominent position holder in the company, with 4.2 million shares worth over $541 million.
In its Q4 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and QUALCOMM Incorporated was one of them. Here is what the fund said:
“Market strength continued in the fourth quarter, with only the communication services sector down in the Russell 1000 Value Index. Portfolio returns benefited from the strong performance of semiconductor maker QUALCOMM Incorporated, which has executed exceptionally well in pursuing the transition to 5G, growing both content and share due to its leadership position in cellular technology. The chipmaker recently outlined a number of peripheral growth opportunities outside of mobile markets, including automotive (where it hopes to leverage its strong presence in the automotive infotainment space into advanced driver assistance systems), Internet of Things (including opportunities in the PC market, VR/AR market, and factory automation) and radio frequency (where mmWave adoption globally, including China, would drive substantial upside).”
4. NIKE, Inc. (NYSE:NKE)
Number of Hedge Fund Holders: 72
The George Soros stock portfolio boosted its NIKE, Inc. stake by 18% in the second quarter of 2022, holding 348,235 shares worth $36.6 million, representing 0.63% on the total 13F securities. Soros Fund Management has owned a stake consistently in the American apparel and athleisure company since Q4 2020, although it initially invested in NIKE, Inc. back in Q4 2010.
On October 13, Raymond James analyst Rick Patel initiated coverage of NIKE, Inc. with an Outperform rating and a $99 price target. The stock is down year-to-date, crushed by industry-related constraints and macro headwinds, and the analyst expects a “challenging” second half of the year. While it is impossible to call the trough in equities, the analyst believes investors should adopt a longer-term view.
According to Insider Monkey’s data, 72 hedge funds were bullish on NIKE, Inc. at the end of the second quarter of 2022, compared to 67 funds in the preceding quarter. Ken Fisher’s Fisher Asset Management is the largest stakeholder of the company, with 8.5 million shares valued at $873 million.
Here is what Leaven Partners has to say about NIKE, Inc. in its Q3 2022 investor letter:
“Nike: NKE shares were a top detractor this quarter on higher inventory balances leading to lower-than-expected gross margins for the next couple of quarters. The company reported 1Q23 sales and EPS beats, but freight costs, markdowns, and the strong dollar weighed on gross margins. Nike continues to expect low double-digit currency-neutral sales growth, but the strong dollar will reduce overall sales growth and discounted inventory will further reduce gross margins for the year.
Nike is, by far, the leading athletic footwear, apparel, and equipment company in the world with over $46 billion in revenue, $6 billion in 2021 annual free cash flow, and over $4 billion of excess cash. After working through its near-term currency and gross margin issues, we expect the company to return towards management’s guidance of at least 10% annual revenue growth, and return to its accelerating profit growth, as longer-term we expect margins to be materially aided by rising average sales prices (from both increased pricing and a mix shift to more premium products), the company’s deep innovation pipeline, a secular shift from the company’s traditional wholesale channels to a more direct-to-consumer approach (now 35% of revenues up from 16% ten years ago), and a more streamlined supply chain. We believe that the continued global secular growth trend towards active wear will continue to aid Nike’s top-line growth, while we expect the combined gross and operating margin improvements from its initiatives will drive long-term mid-teens or higher annual EPS growth for the foreseeable future.”
3. Intuit Inc. (NASDAQ:INTU)
Number of Hedge Fund Holders: 75
Intuit Inc. is a California-based company specializing in financial management and compliance products and services in the United States, Canada, and internationally. The company operates through four segments – Small Business & Self-Employed, Consumer, Credit Karma, and ProConnect. George Soros’ hedge fund boosted its Intuit Inc. stake by 24% in Q2 2022, holding 76,574 shares worth $29.5 million.
After Intuit Inc. revealed that Credit Karma has experienced more deterioration during the last few weeks of the first quarter, but at the same time reported that Q1 results are forecasted to be ahead of guidance and reaffirmed its full-year FY23 operating income and EPS guidance, Morgan Stanley analyst Keith Weiss said that this pre-announcement raises confidence in the primary business, despite Credit Karma and Mailchimp weakness. Reiterating FY23 targets indicates management’s commitment to achieving profitability, “which should be rewarded by investors,” added the analyst, who maintained an Overweight rating and a $550 price target on Intuit Inc. shares on November 2.
According to the second quarter database of Insider Monkey, 75 hedge funds were long Intuit Inc., compared to 82 funds in the prior quarter. Terry Smith’s Fundsmith LLP is the biggest stakeholder of the company, with 2.3 million shares worth $914 million.
Here is what RiverPark Large Growth Fund has to say about Intuit Inc. in its Q3 2022 investor letter:
“We took advantage of its 2022 price decline to add a small position in Intuit. INTU is a leading SaaS software solutions provider to small businesses, consumers, and professional accountants, best known for its QuickBooks accounting and TurboTax tax preparation platforms. INTU recently strengthened its personal finance offerings with the acquisitions of Mint and Credit Karma, and its small business offering with the acquisition of email marketing platform Mailchimp. The company is benefitting from the secular shift to digitization for both businesses and consumers. Given its vast amount of valuable personal finance and tax customer data from its 100 million + customer installed base, the company can apply artificial intelligence to the data to generate actionable intelligence for customers, as well as a large cross-selling opportunity across its products.
Given INTU’s less than 5% penetration of its $300 billion market, we believe the company can grow its top-line mid-teens, while improving its high-margin business model of greater than 80% gross margins and greater than 35% EBITDA margin, leading to high-teens EPS growth for the foreseeable future. At about 2% of revenue, the company also requires limited capital expenditures, producing significant and growing FCF, which INTU has used for acquisitions, a small dividend, debt repayment and stock buybacks.”
2. T-Mobile US, Inc. (NASDAQ:TMUS)
Number of Hedge Fund Holders: 96
T-Mobile US, Inc. (NASDAQ:TMUS) is a Washington-based company that provides mobile communications services in the United States, Puerto Rico, and the United States Virgin Islands. The George Soros stock portfolio held 317,556 shares of T-Mobile US, Inc. in Q2 2022, worth $42.7 million and representing 0.76% of the total securities. Soros Fund Management increased its T-Mobile US, Inc. stake by 12% in the June quarter. Despite missing market estimates on Q3 financial results, investors are positive on the stock given the subscriber strength and an optimistic outlook.
On October 28, Cowen analyst Paul Gallant raised the price target on T-Mobile US, Inc. to $201 from $187 and kept an Outperform rating on the shares. The analyst said that the company reported strong Q3 results highlighted by market-leading phone adds, attractive churn upside, upside margins, and raised 2022 guidance.
According to Insider Monkey’s data, 96 hedge funds were long T-Mobile US, Inc. at the end of Q2 2022, compared to 91 funds in the earlier quarter. Andreas Halvorsen’s Viking Global is the largest position holder in the company, with 9.17 million shares worth $1.23 billion.
In its Q4 2021 investor letter, ClearBridge Investments shared its stance on T-Mobile US, Inc.:
“As mentioned, the communication services sector has come under some pressure, and irrational pricing competition has negatively impacted wireless industry growth and profitability of late, weighing on T-Mobile. Faced with these headwinds, and with pressure from other wireless carriers and cable companies that could cause the company to cede share in subscriber growth in 2022, we exited our position in the fourth quarter.”
1. Salesforce, Inc. (NYSE:CRM)
Number of Hedge Fund Holders: 116
Salesforce, Inc., an American provider of customer relationship management technology, is one of the top large-cap picks from the George Soros stock portfolio. The hedge fund strengthened its hold on Salesforce, Inc. by 139% in Q2 2022, with 627,509 shares worth $103.5 million, representing 1.84% of the total 13F portfolio. Salesforce, Inc. stock climbed on October 18 as activist Jeff Smith’s Starboard Value took up a “significant” stake in the company.
Piper Sandler analyst Brent Bracelin on October 20 maintained an Overweight rating on Salesforce, Inc. but lowered the firm’s price target on the shares to $175 from $200. “Software valuations might be nearing a bottom, but fundamentals are not,” the analyst wrote in a research note. He sees multiple factors that could further challenge billings, revenue, and free cash growth estimates into 2023, and he “proactively” trimmed growth assumptions and targets across software “to better reflect these elevated near-term risks.”
According to Insider Monkey’s Q2 data, 116 hedge funds were bullish on Salesforce, Inc., compared to 114 funds in the prior quarter. Harris Associates is a significant stakeholder of the company, with more than 5 million shares valued at $829 million.
Here is what Cooper Investors Global Equities Fund has to say about Salesforce, Inc. in its Q3 2022 investor letter:
“It seems unfashionable to discuss technology stocks given the current market mood, but we are observing positive signs from US software companies in terms of their journey along the ‘HubrisHumility’ cycle. We have trimmed and concentrated our software exposure significantly over the last 18 months down to two cloud-native SAAS players, Workday and Salesforce. We met with both businesses during our trip and came away encouraged from language indicating increased focus on profitability and cost control.
We see significant optionality in these businesses to grow at the same time as expanding margins and free cash flow. The discussions increased our conviction that returns on capital are now becoming a priority for CEOs and CFOs in this sector who are talking for the first time about cost discipline, reduced capex, more measured hiring practices, a reduction in the level of stock-based compensation and scaled back M&A ambitions. Salesforce in a recent earnings update announced its first ever buyback for US$10bn…” (Click here to see the full text)
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This article is originally published at Insider Monkey.
