Billionaire investor and philanthropist George Soros is one of the most famous figures in the investing world, earning himself the enviable moniker “The Man Who Broke the Bank of England” after he made over $1 billion in profit from shorting the British pound in 1992.
The 89-year-old Soros still ranks as the 162nd richest person in the world according to Forbes, having a net worth of $8.3 billion even after shifting $18 billion from his family office Soros Fund Management to the Open Society Foundations in 2018, which has primarily funded left-leaning groups with progressive agendas, including Black Lives Matter. Because of those affiliations, as well as donating over $10 million to Hillary Clinton’s presidential bid in 2016, Soros has become more famous in recent years as a villain of the political right.
George Soros - Soros Fund Management
Now operating as a family office, George Soros’ Soros Fund Management delivered exceptional returns to its clients during its four-decade run as a public hedge fund, averaging annual returns of over 20% and becoming one of the largest hedge funds in the world at its peak with $28 billion in assets under management in 2011.
Soros Fund Management has continued to post strong results since converting into a family office, including 24% gains in 2013 (though that actually trailed the S&P 500, which gained 30% that year), and 8.9% gains in 2017. There have been some duds mixed in there as well however, including just 0.9% gains in 2018.
While George Soros’ reputation as one of the all-time great investors will never be tarnished, the same can’t be said about hedge funds as a whole, as their hedged returns couldn't keep pace with the unhedged returns of the market indices over the past decade. That doesn’t mean their stock picks aren’t worth tracking however. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 56 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 34% through August 17. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free enewsletter below to receive our stories in your inbox.
According to Soros Fund Management’s latest 13F filing for the reporting period of September 30, the fund added 46 new stocks to its portfolio and sold out of 55 positions. Some of its biggest moves during the third quarter were in chipmakers and consumer discretionary stocks, while it greatly reduced its exposure to telecommunications companies. Soros also jumped on several companies in the process of being acquired, as well as multiple Q3 IPOs.
Without further ado, let’s check out the Top 10 Stocks Billionaire George Soros Just Bought.
NXP Semiconductors NV (NASDAQ:NXPI) kicks off the list after Soros Fund bought 70,000 shares of the chipmaker during Q3. NXP ranked as one of hedge funds’ favorite stocks in 2017 and 2018, but has lost close to 30% of its hedge fund shareholders since then among the select group of high performing funds tracked by Insider Monkey.
The semiconductor industry posted a 5.8% year-over-year increase in global sales during September, while global chip sales rose by the same amount as smartphone demand intensifies following pandemic-induced shipment difficulties earlier in the year. Sales were particularly strong in the Americas, rising by just over 20% year-over-year. In addition to mobile, it was a big rebound in sales to the auto industry that helped spur NXPI’s strong Q3 results that have pushed shares up by 13% over the past two weeks.
Soros Fund bought 91,000 shares of paint, coatings and materials supplier PPG Industries Inc (NYSE:PPG) during Q3, opening a new stake valued at $11.1 million as of September 30. Several other hedge funds took an interest in PPG during Q3, including Benjamin Smith’s Laurion Capital Management and Ira Unschuld’s Brant Point Investment Management.
First Eagle Investment Management took a large position in PPG at depressed prices during the first quarter and expressed its optimism for the stock’s prospects in its Q1 investor letter, stating:
“PPG has a history of conservative balance sheet management and strong capital allocation and has generated positive free cash flow for more than 40 consecutive years. Early-2020 weakness in PPG’s share price, due primarily to its exposure to cyclical weakness in autos and industrial production, enabled us to add this business to the portfolio at what we considered an attractive price.”
The position has been a huge winner for First Eagle, as PPG shares have gained over 70% since the end of Q1, resulting in over $50 million in profit for the firm based solely on the size of its holding at the end of Q1 (it would add more than 300,000 additional PPG shares in Q2).
400,000 shares of National General Holdings Corp (NASDAQ:NGHC) were snapped up by Soros Fund Management during Q3, a position worth $13.5 million at the end of the quarter. NGHC, which ranks as one of the 76 Best Insurance Dividend Stocks To Invest In, was owned by 17 of the hedge funds tracked by Insider Monkey as of June 30. It’s proven to be a popular stock thus far among Q3 filers given its new status as a merger arbitrage stock, as John Orrico’s Water Island Capital and Robert Emil Zoellner’s Alpine Associates each opened large new stakes in NGHC during Q3.
It was announced in early July that The Allstate Corporation (NYSE:ALL) would acquire NGHC in an all-cash deal valued at $4 billion, or $34.50 per share. In an interesting twist to the deal, the special dividend being paid to NGHC shareholders could be reduced by $1.00 if the company fails to meet its earnings growth expectations throughout the remainder of 2020. Investors don’t seem too concerned that that will be the case, as the stock has been trading around the $34.10 mark since the deal was announced.
One of the 30 Most Popular Stocks Among Hedge Funds in Q2, Walt Disney Company (The) (NYSE:DIS) looks to be well on its way to achieving the same distinction in Q3 after Soros and several other hedge funds tracked by Insider Monkey took stakes in the media and entertainment giant during the quarter. For its part, Soros Fund bought 150,000 DIS shares valued at $18.61 million on September 30.
The purchase by Soros comes after Disney shares have endured a rare slump in 2020 brought about by the pandemic, sliding by 4.34%. They have rallied by over 11% in recent days however following Pfizer Inc. (NYSE:PFE)’s announcement of the results of a promising Covid-19 vaccine.
A vaccine would certainly be a huge boon for Disney’s struggling theme parks division, though Daniel Loeb of Third Point pointed out the silver lining to the situation in his fund’s Q2 investor letter, stating:
“A slew of sell‐side analysts had recently downgraded the stock but we believed they failed to grasp that the pandemic also provided Disney with an important opportunity – to accelerate a plan to bring its blockbuster content directly to the consumer via streaming, which will further elevate Disney’s position as the world’s pre‐ eminent media company. Streaming is Disney’s biggest market opportunity ever with potentially $500 billion of revenue spread across over a growing market of 750 million current broadband homes globally ex‐China, dwarfing the size of Disney’s current addressable markets (roughly $100 billion between global box offices and theme parks). Disney’s dominant position in the global media landscape sets up the company to take a meaningful chunk of the growing DTC streaming market, shown by the early success of Disney+. In less than nine months, Disney+ attained 60 million global subscribers, a milestone that took Netflix over seven years to meet.”
Rounding out the first-half of our list of George Soros’ top new stock picks is Maxim Integrated Products Inc. (NASDAQ:MXIM), the second chipmaker on the list to catch Soros’ attention. Soros Fund bought 294,369 shares of MXIM during Q3, giving it a position valued at $19.90 million on September 30.
Maxim ranked among the 10 US Companies With Highest Revenue Exposure To China, with 35.7% of its revenue coming from the country. That didn’t stop Analog Devices, Inc. (NASDAQ:ADI) from agreeing to acquire the company in an all-stock deal back in July, which is expected to be completed next summer. ADI is getting a company on the rise, as Maxim’s earnings per share have skyrocketed over the past three years.
Click to continue reading and see theTop 5 Stocks Billionaire George Soros Just Bought. Disclosure: None. Top 10 Stocks Billionaire George Soros Just Bought is originally published at Insider Monkey.
