The latest 13F season has arrived, when many money managers issue required reports on their holdings. It can be worthwhile to pay attention, as you might get an investment idea or two by seeing what some major investors have been buying and selling.
For example, consider George Soros, known to some folks these days for his politics and philanthropy. His fame initially stemmed from his wealth, though, which is a result of his outstanding investing prowess. He founded Soros Fund Management back in 1973, and under its umbrella, the Quantum funds racked up an amazing record, reportedly averaging close to 20% annual growth over four decades. As The New York Times has explained: "His huge gains have come from macro bets, which aim to profit from global economic trends by trading currencies, commodities, bonds and other securities. Mr. Soros made his name, however, betting on currencies." Soros has noted, though, that hedge funds can't beat the market due to fees.
Soros Fund Management's reportable stock portfolio totaled $11.8 billion in value as of Sept. 30, 2013. Its latest 13F report shows that it established new positions in Cadence Design Systems (NASDAQ: CDNS ) and Regions Financial Corporation (NYSE: RF ) and increased its shares of Teva Pharmaceutical Industries (NYSE: TEVA ) by 158%, leaving it as its third-largest holding.
With a market capitalization near $4.5 billion, Cadence Design Systems is a relatively small company, specializing in design automation software and design intellectual property for semiconductors, among other things. (Its processors are in Microsoft's Xbox One, for example.) The company's fourth quarter featured revenue up 9%, slightly beating estimates, and net income down but in line with expectations. Management noted: "2013 was a great year for Cadence. We introduced six new innovative, internally developed products. We made three important acquisitions to build out our fast growing IP portfolio."
Southeast-focused regional bank Regions Financial, yielding 1.1%, is trading near a 52-week high. (It tripled its dividend in 2013.) The bank emerged from the recent financial crisis in relatively good shape, having repaid its TARP obligation back in 2012. It did well in 2013, improving its debt and capital structure and lowering its funding costs. Its net interest margin has increased steadily in recent quarters. Regions Financial's fourth quarter was a bit mixed, with earnings down from year-ago levels but full-year earnings up over the previous year, and loans rising as well. Bulls like the bank's mobile ambitions and its innovations, such as its Regions Savings Secured Loan, a new fixed-rate installment loan responding to demand for (dangerous) payday loans.
Teva has reported some mixed results recently. Its oral multiple sclerosis drug laquinimod received a negative opinion from Europe's regulators in January, but last week it received a positive opinion from Europe for its asthma and COPD treatment, DuoResp Spiromax. Also in 2014, the FDA approved its supplemental new drug application for a less frequently administered Copaxone formulation, targeting multiple sclerosis (MS) and gave full approval to oncology drug Synribo. Bulls like Teva Pharmaceutical Industries' strong position in generic drugs, as it boasts more than 140 product registrations awaiting FDA approval. Still, it faces patent expirations and competing drugs, as do its peers. Teva Pharmaceuticals recently bought NuPathe and its FDA-approved patch for migraines. Its stock yields 2.4%.
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