$10 Billion Fund Eliminates Its Stake in Citigroup Inc. and Regions Financial Corp.

With the SEC 13F filings in the books, we can see what the fund that was started by a man now worth $23 billion has been buying and selling. It turns out he hasn't taken too kindly to the banks.

In the last quarter of 2013 we learned Soros Fund Management had bought a total of $320 million worth of Citigroup (NYSE: C  ) , JPMorgan Chase (NYSE: JPM  ) , and Regions Financial (NYSE: RF  ) . Yet the opinion on those banks must've changed quickly, as by the end of March, all three had been sold off:


Source: Company SEC filings.

And while the fund has delivered a remarkable track record -- the reported average annual growth stands at an astounding 20% over a 40-year stretch -- it must be noted that it's active in the markets. In fact, of the roughly 240 different investments it had in at the end of 2013, roughly a third of them were gone by March.

We do take the long-term perspective here, but at times a quick glance into the different moves by a well-known and well-regarded investor like George Soros can provide a solid idea or two.

Citigroup Tower. Source: Flickr / asibiri.

Of the three big-bank sell-offs, the most understandable is probably Citigroup. To put it simply, it has had a tough start to 2014. In February it announced that it had to slash $360 million off its net income thanks to fraud from its unit in Mexico. Less than one month later we learned it was the only bank to fail the yearly Comprehensive Capital Analysis and Review from the Federal Reserve. And while it may have delivered solid results in the first quarter, of all the positions Soros amassed, Citigroup undoubtedly had the most troubling of trends.

Next on the list is Regions Financial, which represented just a hair above 10% of $320 million in holdings of these three by Soros Fund Management. Its 2014 has been much more quite than Citigroup, but that is true of most banks. Regions had a solid but unspectacular year in 2013. However, the reality that the Federal Reserve projected it would lose $1.4 billion after nine quarters of stressed results was a touch worrying. And although it still has things to work through, the trusted blocking and tackling analogy used in football would be a good way to describe what it is currently going through.

The biggest worry for Regions Financial is the reports that U.S. regulators are diving further into the mortgage operations at it and its fellow regional-bank peers from before the financial crisis. This will be important to watch, and when you also consider that its CEO began his remarks at a recent presentation by saying, "We really think we're poised for growth," there's no doubt the remainder of 2014 could mean big things for Regions. 

Lastly there is JPMorgan Chase, which stands as the largest bank in the country. It had a tough go of things in April, as its earnings-per-share results for the first quarter came in 9% below analyst expectations. But as my colleague John Maxfield noted shortly thereafter, it offers a compelling dividend, and it's currently priced very reasonably, at 1.5 times price to tangible book value.

Although the time owning it was incredibly short, Soros seemed to feel as if JPMorgan Chase was the most worthwhile investment when you consider the massive position, and I'd have to agree with him. But I'd plan to keep it longer than just three months.

Warren Buffett just bought nearly 9 million shares of this company
While we don't understand exactly why Soros buys and sells what it does, we do know what Warren Buffett is doing, and he's keeping it for the long haul. Just imagine a company that rents a very specific and valuable piece of machinery for $41,000 per hour, (That's almost as much as the average American makes in a year!) And Buffett is so confident in this company's can't-live-without-it business model, he just loaded up on 8.8 million shares. An exclusive, brand-new Motley Fool report details this company that already has over 50% market share. Just click here to discover more about this industry-leading stock, and join Buffett in his quest for a veritable landslide of profits!


Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2991438, ~/Articles/ArticleHandler.aspx, 10/30/2014 11:37:32 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement