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."
The company's reportable stock portfolio totaled $8.4 billion in value as of Dec. 31, 2012.
So what does Soros's latest quarterly 13F filing tell us? Here are a few interesting details:
The biggest new holdings are Morgan Stanley and Citrix Systems. Other new holdings of interest include Weatherford International (NYSE:WFT), whose stock has dropped in part due to expectations that the company will pay millions in settlements to multiple U.S. agencies investigating possible improper practices abroad. It has also been plagued by accounting-related problems and remains challenged by low gas prices and low margins related to an Iraqi contract. In a recent presentation, though, management pointed out that its land-based operations, which represent the bulk of its work, have been growing by an annual average of about 16% over the past decade. Its "unconventional" operations, including shale and oil sands, have been growing even more briskly.
Among holdings in which Soros Fund Management increased its stake were Micron Technology (NASDAQ:MU) and Sarepta Therapeutics (NASDAQ:SRPT). Micron's bottom line has dropped from the black into the red recently, and the company bought bankrupt Japanese chip maker Elpida last year and is hoping that tablet growth will drive chip demand. Meanwhile, Micron stock has been appearing undervalued.
Sarepta, a biotech developing the promising Duchenne muscular dystrophy drug eteplirsen, nearly tripled in a single day recently. It has given back a big chunk of that gain, but some expect further growth while others are wondering whether the company will be acquired. Until or unless the drug receives FDA approval, however, the company's future is somewhat uncertain. It's hoping for an accelerated approval.
Soros Fund Management reduced its stake in lots of companies, including RF Micro Devices (UNKNOWN:RFMD.DL). RF Micro Devices posted estimate-beating numbers in its second and third quarters, in part due to its role as a radio-frequency component supplier for iDevices, which are selling briskly. It also supports lower-end phones. Bulls are hopeful about it doing a lot of business in China, where smartphones and upgrades of phones are strong sellers.
Finally, Soros's biggest closed positions included LinkedIn and Express Scripts. Other closed positions of interest include Molycorp (NASDAQOTH:MCPIQ), which has been struggling in a tough environment and recently worried investors with a surprisingly large share offering and debt issuance. (Some worry about further capital needs in the near future.) The stock has fallen 74% over the past year, but it received a Wall Street upgrade recently. Bears note, though, that it's long been free of free cash flow, which is not promising.
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. 13-F forms can be great places to find intriguing candidates for our portfolios.
Longtime Fool contributor Selena Maranjian, whom you can follow on Twitter, owns shares of LinkedIn. The Motley Fool recommends and owns shares of Express Scripts and LinkedIn. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.