Top Holdings of Soros Management Fund

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It’s important to follow big fund managers, as sometimes (if not always) they have access to resources that individual investors don’t. According to recent filings, Soros Management Fund has huge holdings in the following stocks, but is there any juice left in them?

American International Group (NYSE: AIG)

<table> <tbody> <tr> <td> <p>Company</p> </td> <td> <p>P/E</p> </td> <td> <p>PEG</p> </td> <td> <p>P/B</p> </td> </tr> <tr> <td> <p>AIG</p> </td> <td> <p>2.36x</p> </td> <td> <p>0.16x</p> </td> <td> <p>0.49x</p> </td> </tr> </tbody> </table>

Soros Management Fund owns 15.22 million shares of the company. Coming from the brink of extinction, AIG has been one of the biggest turnaround stories in recent years. YTD its shares are up by 41%, and AIG still appears to be undervalued. The company has been continually delivering solid performance, and in the recent quarter its pre-tax net operating income rose by 75%. AIG recently merged all its insurance entities, as management believes it would save operating costs.

During the crisis in 2008 the US Treasury provided $182 billion worth of support to the company, in return for its shares. The Treasury recently announced that it has sold its entire stake in AIG for a profit of $22.7 billion.  The company also agreed to sell off its aircraft leasing business to a Chinese firm for $4.8 billion. The deal is expected to close in mid-2013, and would allow AIG to focus on its core competencies. It’s not hard to conclude why AIG is one of the favorite stocks amongst hedge fund managers, and one of the top holdings of Warren Buffett.

Denbury Resources (NYSE: DNR)

George Soros owns around 4.26 million shares of this oil and gas company. Denbury Resources recently sold off its Bakken shale assets to Exxon Mobil (NYSE: XOM). In addition to $1.6 billion cash, Denbury Resources got Exxon’s Hartzog Draw field in Wyoming and the Webster field in Texas. Exxon’s long term strategy is to enter high margin oil production, and this deal would increase its acreage in the Bakken region by 50%. However, Denbury Resources is keen on increasing its carbon dioxide wells.

Enhanced Oil Recovery (abbreviated as EOR) is a generic term for techniques for increasing the amount of crude oil that can be extracted from an oil field. This technique involves gas injection into the wells, and the carbon dioxide is the most common gas. With access to cheap CO2, Denbury Resources has beating its EOR market competition. DNR plans to use the cash to purchase more CO2 wells, and also agreed to purchase Exxon’s LaBarge Field in Texas.

Shares of Denbury Resources trade at a forward P/E of 14.31, indicating that the stock is on the edge of being undervalued. The company enjoys a gross profit margin of 78%, and analysts expect its annual EPS growth to be around 12% for the next 5 years.

Cheniere Energy (NYSEMKT: LNG)

Natural gas costs around 4 times more outside the country than it costs in the US. But the shortage of natural gas liquefaction plants in the US discourages LNG exports. However, Cheniere Energy was granted permission to develop its LNG export plant at Sabine Pass, the first US liquefaction plant to be developed over the last 50 years. The LNG terminal at Sabine Pass will have a send out capacity of 4Bcf/d, and is the largest receiving re-gasification terminal in the world. LNG exports plant is expected to begin operations by 2015, and the company has already signed contracts with willing buyers in the Middle East. Additionally, management recently announced its plans to expand the facility by 50%. The company has been reporting sound financials, and its growth prospects justify why Soros Management Fund owns 4.59 million shares of the company.


PiyushArora has no positions in the stocks mentioned above. The Motley Fool owns shares of American International Group, Denbury Resources, and ExxonMobil and has the following options: long JAN 2014 $25.00 calls on American International Group. Motley Fool newsletter services recommend American International Group. 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. Is this post wrong? Click here. Think you can do better? Join us and write your own!

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