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Every quarter, many money managers have to disclose what they've bought and sold, via "13F" filings. Their latest moves can shine a bright light on smart stock picks.
George Soros is known to some folks these days for his politics and philanthropy, but his fame stems from his wealth, 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' reportable stock portfolio totaled $6.9 billion in value as of June 30, 2012.
So what does Soros' latest quarterly 13F filing tell us? Here are a few interesting details:
New holdings include Facebook (Nasdaq: FB ) and Amarin (Nasdaq: AMRN ) . Shares of Facebook have been pummeled since their IPO not so long ago, falling more than 50%, and some analysts warn that they could fall another 50%. Others point out that though its growth is slowing, it is profitable, and there are lots of reasons to believe in it, such as its cash hoard, an uptick in advertising revenue, and some successful moves (think Instagram).
Amarin, a late-stage cardiovascular-focused biotech company, saw its shares pop nearly 20% recently, on promising developments for its newly approved drug, Vascepa, and the possibility of a partnership with a big pharmaceutical company or an outright acquisition. There could be more good news if the drug is approved for other treatments.
Among holdings in which Soros increased its stake was Westport Innovations (Nasdaq: WPRT ) , designer of low-emissions engines that run on natural gas, among other things. Its future is bright, as we seek ways to depend less on oil and embrace currently low prices for natural gas. Some think that prices may stay low, benefiting Westport. In the meantime, though, it remains unprofitable.
Soros reduced its stake in lots of companies, including VIVUS (Nasdaq: VVUS ) , which received Food and Drug Administration approval for its weight-loss drug, Qsymia. Such a drug has blockbuster potential, given America's obesity problem, which explains the stock's tripling over the past year. Some thus don't see it having quite as much more room to grow. It has competition, too, such as from Arena Pharmaceuticals. The drug sports some possible heart risks, too, and it remains to be seen whether patients will accept the cost and whether insurers chip in.
Finally, Soros unloaded plenty of companies entirely, such as biotech company Dynavax Technologies (Nasdaq: DVAX ) , which is up some 43% over the past year. With partners in place (that provide funding but also take some of the upside), it has a late-stage hepatitis B treatment in development and is also developing a drug to tackle asthma. Bulls like its pipeline's potential, but bears haven't liked its secondary stock offering and management turnover.
We should never blindly copy any investor's moves, no matter how talented the investor. But it can be useful to keep an eye on what smart folks are doing. 13F forms can be great places to find intriguing candidates for our portfolios.
For a more in-depth look at Facebook's opportunities and threats, along with the key drivers you should monitor and updates for a full year, check out our brand-new premium research report.