Every quarter, large money-managers have to disclose what they've bought and sold via "13F" filings. While Fools don't always (or even usually) follow what the big money does, we can often glean an idea or two by tracing their footsteps.

Last year, famed investor George Soros invested about $575 million combined into struggling retailer J.C. Penney (NYSE:JCP) and embattled purveyor of healthy stuff Herbalife (NYSE:HLF). This quarter's 13F filing shows that Soros has cut Penney loose completely after selling a large chunk last quarter, and that he increased his stake in Herbalife by 52%, or about $100 million based on prices during the quarter.

While trying to mirror another investor's portfolio -- especially with dated information like a 13F -- isn't usually a smart way to invest, we may be able to use Soros' actions as a starting point to a better understanding of these companies as investments. 

Let's take a closer look at the story, and what's going on with J.C. Penney and Herbalife.

Movin' on, movin' up 
Here's what Herbalife and J.C. Penney shares have done since the quarter when Soros first opened positions in the companies last year:

HLF Chart

HLF data by YCharts

It looks like Soros is convinced that Herbalife -- which saw its stock price peak in January before falling sharply in February and March -- has plenty of room to run, and isn't put off by the short attack from fellow hedge fund billionaire Bill Ackman, who has taken an almost crusade-like stance against the company, saying at different times that Herbalife is operated like a "Ponzi scheme," and that he would take his fight against the company "to the ends of the earth."

On the other hand, Soros' fund fully exited its position in Penney -- and likely at a 40% loss -- apparently giving up on the company's chances at making a full turnaround. 

Getting out too soon? Probably not
Depending on your take, some may think Soros exited J.C. Penney too early. After all, the company reported increased same-store sales in both of the past two quarters, and has made a dent in its operating losses. According to the most recent quarterly earnings report, management is projecting that it will be cash-flow breakeven for the fiscal year, based on heavy cost-cutting efforts, the planned closure of 33 stores, and refocusing its products and brand to appeal to its legacy customer base. 

The rub? J.C. Penney still lost $352 million, and reported negative-$250 million in operating income in the quarter. And even with the improvements in same-store sales, the company is still well off sales from two years ago and hasn't started the store closings yet. 

The Herbalife saga continues 
Bill Ackman's attacks against Herbalife have only increased over the past quarter, and depending on when Soros added shares, he's either up or down. Whether Soros and his managers are sold on the long-term viability of Herbalife, or are just riding the momentum, remains to be seen. The company has grown sales and earnings per share more than 40% over the past two years, before seeing net income fall last quarter:

HLF Chart

HLF data by YCharts

However, the stock price is down 20% in 2014, and the company recently made the decision to respond to Ackman's attacks on the company, potentially taking this from an investor showdown, to the kind of distracting -- and very public -- fight that could hurt the company's efforts to attract new members and sellers. It strikes me as a bad move for the company to get into a public argument with Ackman. Frankly, it could lend credence to his claims in the eyes of a lot of potential investors and -- more importantly -- customers who might otherwise not even known about Ackman's claims.

Final thoughts: Avoid the noise 
When it comes to J.C. Penney, don't mistake a little progress with a full turnaround. The company is still losing money, and not generating enough cash to cover operations. Until the company breaks those trends and demonstrates that it can sustain itself without outside funding, there's just too much risk of permanent loss of capital for investors. 

As to Herbalife, as long as Ackman continues his fight to uncover what he views as illegal activity, there's just too much noise and speculation in the market. Soros may have tossed another $100 million at the stock, but he's worth more than $25 billion, and his Herbalife position is less than 3% of his stock holdings, so it's very low risk for him. Most importantly, invest based on your risk profile, and long-term goals, and don't get caught up in what hedge fund billionaires -- even successful ones like Soros -- are doing. 

Jason Hall has no position in any stocks mentioned. The Motley Fool has options on Herbalife. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.