George Soros’ portfolio during the second quarter saw plenty of action with the fund doubling down on its bearish bets to position for a potential market meltdown. The fund doubled its S&P 500 (SPY) index put option during the June quarter, pushing the position to its largest in the portfolio. The S&P 500 put accounts for 8% of Soros’ portfolio according to the 13F filing available for the period ended June 30. George Soros is also heavily short the Russell 2000 index and increased his put options of the index by a very significant 259% during the quarter. This is the fund’s second largest position representing 5.8% of the portfolio.
In addition, during the quarter the fund trimmed its third largest position, South American agricultural company Adecoagro S.A. (AGR) by 3%, and also reduced its fifth largest holding Interoil Corp (IOC) by 2%. Motorola Solutions Inc (MSI) was the fourth largest position on June 30 as Soros increased his MSI holdings during the quarter by 26%. Motorola Solutions accounts for roughly 3.7% of the fund’s 13F portfolio.
Nearly half of its top 20 holdings are notes issued by companies that include Lawson Software Inc (LWSN), N I I Holdings Inc (NIHD), J D S Uniphase Corp (JDSU), Cadence Design Systems Inc (CDNS), and Blackboard Inc (BBBB).
Interesting stock moves during the quarter include 100% increase in Polo Ralph Lauren Corp (RL), and a 22% increase in Lawson Software Inc (LWSN). Polo Ralph Lauren is the fund’s ninth largest holding and accounts for 2% of the portfolio while Lawson Software is the 20th largest holding and accounts for 1% of the portfolio.
George Soros has a stellar track record of beating the market during his career. Academic studies also show that corporate insiders beat the market by several percentage points every year. We believe investors should be able to generate higher returns than the market by imitating George Soros’ and insiders’ stock picks.
George Soros has changed his view on the cancer drug company Dendreon (DNDN) as the fund has cut its position by half during the second quarter. Shares of Dendreon collapsed recently after the firm sharply reduced its sales estimates. At the end of June, Dendreon accounted for 1.4% of the fund, and was the 15th biggest holding. The good news is that there is an insider purchase after the price collapse which implies that now maybe the time to buy DNDN.
Some other stocks in Soros’ portfolio witnessed insider purchases as well. Cable company Charter Communications Inc. (CHTR), which is in the fund’s portfolio saw a market purchase of $1.2M by company officer Winfrey Christopher in August. Likewise there was a $2.1M market purchase by director Quillen Michael in coal producer Alpha Natural Resources (ANR), another Soros holding.
George Soros also owns telecom service provider CenturyLink (CTL). Four insiders of the firm have bought a combined $1M in the stock since the start of August. And automaker General Motors (GM), one of Soros’ holding, saw seven executives buying a combined $1.5M worth of GM since March. Danaher and Fedex also had one insider purchase during the past 6 months.