5 Big Buys By George Soros

Dr. Osman is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

George Soros is a Hungarian-American business mogul, who is considered as one of history's most successful investors. He is famous in particular for currency speculation. He made $1 billion in a single day in September 1992 for shorting the pound. A philanthropist and an activist, Soros managed the Quantum Fund, which is well known for having gained an annual return of 30 percent on the average between 1970 and 2000.

Soros Fund Management's total portfolio value moved up slightly to $6.9 billion from $6.8 billion in the first quarter of this year. However, this level was still below that of the same quarter last year, which amounted to $7.11 billion. More recently, during the second quarter Soros sold 83 positions and took 70 new ones bringing his total to 221, with a total market value of $3.582 billion. Conversely, in 2011, Soros' famous Quantum Fund had lost $3.8 billion. Soros also performed miserably in 2010, when his fund gained only 2.63 percent compared to the 13 percent S&P average.

Of particular note, in the second quarter of this year billionaire George Soros put Wal-Mart (NYSE: WMT) at the top of his portfolio, and ventured into data management solutions company NetApp (NASDAQ: NTAP). Like John Paulson, Soros has also substantially increased his gold holdings during this period. Soros Fund Management's current portfolio consists of nearly 13 percent consumer services, 9.4 percent technology, 5.6 percent each for consumer goods and industrials, 4.8 percent basic materials, 3.2 percent each for health care and financials, and 55.2 percent in other areas.

Here are George Soros' biggest buys for the second quarter:

<table> <tbody> <tr> <td> <p>Company</p> </td> <td> <p>Shares Held</p> </td> <td> <p>%Change</p> </td> <td> <p>% of Portfolio</p> </td> </tr> <tr> <td> <p>Wal-Mart Stores, Inc.</p> </td> <td> <p>4.8 million</p> </td> <td> <p>New</p> </td> <td> <p>4.87%</p> </td> </tr> <tr> <td> <p>General Electric Company</p> </td> <td> <p>8.57 million</p> </td> <td> <p>585%</p> </td> <td> <p>2.58%</p> </td> </tr> <tr> <td> <p>NetApp, Inc.</p> </td> <td> <p>4.476 million</p> </td> <td> <p>New</p> </td> <td> <p>2.06%</p> </td> </tr> <tr> <td> <p>SPDR Gold Shares</p> </td> <td> <p>0.88 million</p> </td> <td> <p>176%</p> </td> <td> <p>1.98%</p> </td> </tr> <tr> <td> <p>Dish Network Corp.</p> </td> <td> <p>4.440 million</p> </td> <td> <p>114%</p> </td> <td> <p>1.83%</p> </td> </tr> </tbody> </table>

Wal-Mart Stores

Wal-Mart is a retail giant with a market capitalization of $245 billion. George Soros just acquired nearly five million shares of WMT, putting it at the top of his portfolio with a share of nearly five percent. With an annual sales growth of 5.11 percent over the last five years, and quarterly earnings that grew by 8.36 percent (yoy), Wal-Mart has also earned the attention of Capital World, FMR LLC, and Wellington Management.

Shares of Wal-Mart were selling at about $74.60, at the time of writing. This company is also an industry leader in terms of earnings per share. This will likely continue into next year, as the company has an EPS estimate of 5.36, higher than its current EPS of 4.75. Over the next five years, this is estimated to grow annually at a rate of 8.79 percent. At present, investors tend to take greater risks than previously with the nation's retail leader. The P/E ratio of 15.36, is notably higher than February's 12.70, but is slightly lower than July's 15.74.

Meanwhile, the company's return on equity is high enough at 23.58 percent. Wal-Mart is poised to further expand its overseas operations when it opens over 20 million square feet of space in 2013. However, these plans could face challenges as the Arkansas-based retailer is currently in the midst of a bribery investigation involving its Mexican subsidiary.

General Electric (NYSE: GE)

George Soros just increased its position in GE five-fold, so that the company now comprises about three percent of his portfolio. General Electric is one of the largest conglomerates around the world. The company had a tough time during the financial crises, but it is gradually recovering.

The Fairfield-based company's stock is selling at about $22.71. GE has a market capitalization of $218 billion. It has a current EPS of 1.15, which is higher than the industry's 0.49, but far lower than those of competitors such as Koninklijke Philips Electronics (3.45) and Siemens (6.24). However, earnings-per-share is expected to grow by 12.34 percent next year, and then 12.73 percent annually for the next five years.

Investors are more willing to take a gamble on GE as its P/E ratio grows. The P/E ratio is at 16.70, and has been consistently growing ever since the last quarter of 2011. In fact, GE's P/E ratio is higher than those of Siemens and Universal Electronics. GE's impressive 3.28 percent dividend yield is also clear evidence that investors should consider this stock.

NetApp, Inc.

NetApp, Inc. is based in Sunnyvale, California. Founded recently in 1992, NetApp performs services related to networked storage solutions. With a market capitalization of nearly $12.7 billion, NTAP provides storage and data management applications among many other things to multi-sector clients worldwide. NTAP stocks were selling at $34.52, as of the time of writing.

Soros bought 4.476 million NTAP shares so it now comprises over two percent of his total holdings. The company's return on equity currently stands at 12.92 and is showing an encouraging profit margin of 8.52 percent. NetApp's P/E ratio is too high compared to the industry average at 24.48, but the forward P/E looks much better at 16.36. Future growth will most likely be predicated on the widening of the company's business networks. Already, NetApp has announced alliances with a number of other media companies, including Actus Digital, Rorke Data, Digital Rapids, and five others.


In contrast to last year's big sale of gold holdings, Soros more than doubled gold shares in the second quarter of this year. In fact, he bought $130 million worth of shares in the world's top exchange-traded fund: GLD. As a result of the recent displays of confidence from gold investors, the price of GLD has drastically increased over the past month. In addition, the latest announcement from the Federal Reserve of its commitment to input certain necessary policy accommodations has further pushed the price of gold up to reach what is a five-month peak level. The price of gold hit $1,692.70 per ounce at the end of August. Its growth is expected to continue as investors look to it as a safe option in these times of economic instability. The recent buying spree of central banks, and the expected increase of gold markets in developing economies, further support the claim that gold is once more a positive addition to an investor's portfolio.

Dish Network Corp. (NASDAQ: DISH)

During the period in question, Soros also doubled his holdings in Dish Network. He now has 4.44 million shares of the second largest satellite television company in the United States. This company is showing robust growth with an EPS of 2.71. Moreover, DISH's P/E of 11.8 is lower than that of its competitors, Comcast and DIRECTV, as well as the figures reported by the industry overall.

In terms of profitability, DISH has a net margin of 8.46 percent. This hasn't reached below five percent since the end of 2009. Its sales have been growing at a rate of 7.43 percent during the last five years. This satellite TV Company has a market capitalization of $14.4 billion and 14 million subscribers, as of the end of 2011. DISH has also made several acquisitions this year, including the DBSD North America and TerreStar networks. The fundamental ratios suggest that DISH is slightly undervalued relative to its peers.

Interested in Reading More?

For GE, the recent financial crisis struck a blow, but management took advantage of the market's dip to make strategic bets in energy. If you're a GE investor, you need to understand how these bets could drive this company to become the world's --infrastructure leader--. At the same time, you need to be aware of the threats to GE's portfolio. To help, we're offering comprehensive coverage for investors in a premium report on General Electric, in which our industrials analyst breaks down GE's multiple businesses. You'll find reasons to buy or sell GE, and you'll receive continuing updates as major events unfold during the year. To get started, click here now.


ecofinstat has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.

blog comments powered by Disqus