Soros Chooses these Tech Stocks over Facebook
Mike is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
What is the difference between George Soros and Mark Zuckerberg? Well George is about 5 times older than Zucks, but the major difference is the stocks in their portfolios. Mr. Zuckerberg has one trillion (or less) shares of Facebook (NASDAQ: FB) and Soros has zero. As anybody that was glanced at financial news in the last couple months knows, Facebook has dropped about 16% since its much anticipated IPO and Zuckerberg’s fortune has taken a hit. As far as we know, Soros has had no interest in Facebook unless his shares are hidden in the Bahamas somewhere. Will he have any interest in the future? He does own some big name tech stocks so it is possible.
Recently, Soros initiated a position in the online bookstore-turned-ecommerce-hub-of-the-world, Amazon.com (NASDAQ: AMZN). The tech company has endured a rocky past year with prices swinging from $175 to $245, but altogether it has gained about 9%. It has a crazy high PE at this point due to the company’s growth prospects and record of surprising investors with great earnings. Plus those Kindles are consistently flying off the (virtual) shelves with a company operating cash flow of over $3 billion for the past 3 years. We will have to see if Soros decides to expand his position in the online retailer.
Usually value stocks aren’t found in the tech world but Dell (NASDAQ: DELL) has been one for a while now. It has even appeared in Joel Greenblatt’s Magic Formula Stock list. If you like the business, the price has become a lot cheaper in the last two months. The stock fell by 27%! It had been drifting down for a while and then got slammed by disappointing Q1 revenue and earnings. Soros bought his first shares of the company in Q1 and could be loving the cheaper price, as long as the Q1 earnings didn’t scary him off. The Q1 earnings were $635 million for a company with a market value of $21 billion so Dell is looking attractive from a PE perspective. Dell appears to be making moves into the enterprise software business with its recent offer for Quest Software. Maybe Quest can bring some growth to the computer company.
The worldwide consumer craze over Apple (NASDAQ: AAPL) products has definitely benefited Mr. Soros and a whole horde of hedge funds. It has been a hedgy fav for a few quarters. Soros made about 20% on his holdings but reduced his shares in Q1. Apple has had massive growth in the past, however, experts are wondering if it possible to carry on at this pace. What industry will the Apple army revolutionize next? The TV industry? Even if they don’t grow, their enormous brand loyalty will help them bring in large profits for decades.
Soros also held Apple’s tech rivals: Google (NASDAQ: GOOG). I guess Google is kind of a Facebook rival too…at least they’re trying to be with Google +. George sold out his position in Q1 this year without realizing a profit. Maybe he was afraid of Facebook and their quick push into the online advertising market. Or maybe Soros has not been pleased with the new leadership.
I hope Soros is a huge Facebook user with 1,000 friends, hundreds of photo albums, and a nice crop on Zynga’s Farmville, but it’s more likely that he doesn’t care about using the network. I also doubt he has ever been a huge Kindle or iPad user though. He seems to care about any company though if he can make money off it!
mthiessen has no positions in the stocks mentioned above. mthiessen runs a partnership that invests in public and private companies. The Motley Fool owns shares of Apple, Amazon.com, Facebook, and Google. Motley Fool newsletter services recommend Amazon.com, Apple, and Google. 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.