George Soros didn't become one of the wealthiest people in the world by making bad investing decisions. The founder of Soros Fund Management is worth $6.7 billion today, and his net worth would be much higher if he hadn't moved $18 billion into his Open Society Foundation in 2018.
One of Soros' smart moves during his long career was to buy shares of big pharmaceutical company Eli Lilly (LLY -2.77%). Here's how much you'd have if you invested $10,000 in Lilly stock when Soros first bought it.
When did Soros first buy Eli Lilly?
Soros' hedge fund currently owns 33,000 shares of Eli Lilly. However, this position was initiated in 2023's fourth quarter, and it was far from the first time the billionaire bought the stock.
He also bought a small stake in the giant drugmaker in the first quarter of 2017. Soros soon changed his mind, though. In the very next quarter, he completely exited the position. It was a similar story in 2014. In the second quarter of that year, Soros started a new position in Lilly only to sell all of his shares in the subsequent quarter.
You might say that it was the same song with different verses in 2010 and 2012. In both of those years, Soros opened new positions in Lilly but exited those positions in the next quarter. There was a small variation in the fourth quarter of 2009. Soros initiated a new stake in Lilly and held onto at least some of his shares through the third quarter of 2010.
But Soros first bought Lilly stock back in the first quarter of 2000. He quickly began selling shares in this case, too.
The big pharma stock's big return
Because we don't know exactly when in 2000 Q1 Soros first bought shares of Eli Lilly, we can't know precisely what price he paid. However, to err on the side of caution, let's assume that he initiated the position at the highest closing price for the stock during the quarter -- $71.06 per share.
If you bought about $10,000 worth of Lilly shares at that price, you would have 140 shares. (You'd actually have spent $9948.40. Buying fractional shares wasn't an option back then.)
Fast-forward to today. Your 140 shares would have grown to be worth close to $106,179. So Lilly would be a 10-bagger for you if you followed in Soros' footsteps more than two decades ago.
Actually, your total return would be even higher. Lilly has paid a quarterly dividend since 1991. Had you reinvested the dividends you received along the way, your investment would have grown in value by more than 20 times.
However, buying and holding Lilly during this entire period would almost certainly have been tough. At one point, the pharma stock plunged by nearly 75% from its peak.
Is Eli Lilly still a good pick?
You might look at Lilly's valuation and conclude that it's no longer a good pick. The stock trades at a forward earnings multiple of nearly 61. I think, though, that this metric is misleading. Sure, Lilly looks expensive if you only consider its growth prospects over the next year or so. However, its growth should accelerate in 2025 and beyond.
Lilly's commercial launch of weight-loss drug Zepbound is only in its early stages. Some analysts predict that the combination of Zepbound and Lilly's type 2 diabetes therapy Mounjaro (which are the same underlying drug -- tirzepatide) could generate peak annual sales of more than $50 billion.
The company also expects to soon win regulatory approval of donanemab as a treatment for Alzheimer's disease. If approved, Morningstar thinks the drug could rake in peak annual sales of nearly $4.9 billion.
Lilly has plenty of other growth drivers, too. They include current blockbusters Verzenio, Taltz, and Jardiance, along with rising star Tyvyt. The company's pipeline also features several promising candidates.
I don't think that Lilly is the best stock in Soros Fund Management's portfolio for retail investors to buy now. I expect the big pharma to keep up its winning ways, though.
