At The Motley Fool, we understand that it often pays to zig when Wall Street zags, but that doesn't mean that we don't pay attention to what leading fund managers are buying and selling. Hedge funds run by the likes of Soros Fund Management, which aren't always in lockstep with the broader market, can be a particularly valuable source of insight.
Every quarter, hedge fund managers overseeing more than $100 million must disclose their quarter-end holdings publicly by filing Securities and Exchange Commission Form 13-F. The form lists all U.S.-traded securities the manager held at the end of the quarter. Although the form doesn't disclose the manager's short positions or the manager's intraquarter trades, it can shine a bright light on his or her "long" stock bets. To help us make use of 13-F data, we turned to Motley Fool partner AlphaClone, a research and investment-management firm that tracks hedge fund public disclosures and develops investment strategies based on them.
Q2 2011 update
George Soros is now known largely for his politics and philanthropy, but his fame stems from his wealth, which in turn results from his outstanding investing prowess. He founded Soros Fund Management back in 1973. Under its umbrella, his Quantum funds have racked up an amazing record, reportedly averaging close to 20% annual growth over four decades.
As The New York Times 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 total market value of Soros Fund Management's disclosed equity holdings as of June 30, 2011 -- the latest quarter for which data is available -- was $3.8 billion across 526 holdings. The fund company's 10 largest positions (shares held) and associated changes as of June 30, 2011 were:
Adecoagro SA (NYS: AGRO) -- reduced 2.6%.
Motorola Solutions (NYS: MSI) -- increased 26.4%.
InterOil (NYS: IOC) -- reduced 1.9%.
Ralph Lauren (NYS: RL) -- increased 100.4%.
Westport Innovations -- reduced 9.5%.
Visteon (NYS: VC) -- reduced 25.5%.
Dendreon (NAS: DNDN) -- reduced 44.6%.
Emdeon (NYS: EM) -- reduced 3.3%.
Lawson Software -- increased 22.5%.
Danaher (NYS: DHR) -- reduced 15.5%.
During the quarter, in addition to the top holdings, Soros substantially increased the fund's position in Time Warner Cable and Liberty Interactive. On the flip side, the fund shed 83% of its CVS Caremark shares, and 69% of its Apple holdings. In addition, the fund sold out of 347 holdings entirely, including Chimera Investment (NYS: CIM) , DryShips (NAS: DRYS) , and American Superconductor (NAS: AMSC) .
Why the sell-offs? Soros is closing his fund to outside investors and returning their money. Outsiders only owned a relatively small portion of the fund. At 81, Soros seems to be winding down his empire to some degree.
Selected Q2 2011 commentary
Soros Fund Management has 31% of its assets in the technology sector, with services and consumer discretionary stocks comprising another 15% and 13% of the portfolio, respectively. Over the past few quarters, its stake in technology and consumer cyclical has increased considerably, while it has pared back on financials and basic materials in a big way, from big double-digit percentages to small single-digits ones.
Here's where the firm is currently winning, losing, and making new bets:
MicroStrategy was a big winner in the quarter, posting stronger-than-expected earnings in the rapidly growing field of business intelligence. It faces competition from much bigger players such as IBM, but that also means it's a potential buyout target. Sporting a market cap near $1 billion, the company earns two stars out of five from Motley Fool CAPS.
Adecoagro SA didn't do so well for the portfolio, but it remained the company's top holding. With lots of farmland in Brazil and Argentina, the company certainly seems positioned to benefit from those developing economies and growing populations -- not to international demand for food from countries as from China. With a market cap near $1 billion, the company has a five-star rating in Motley Fool CAPS.
The largest new addition is IBM, which has attracted many investors' interest lately with its attractive price and wide range of successful operations. The company runs a growing server business, and has made breakthroughs in more efficient data storage technology. With a market cap near $200 billion, the company has a four-star rating in Motley Fool CAPS.
That's the latest from Soros Fund Management. Tell us what you think in the comments below.
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At the time thisarticle was published Longtime Fool contributorSelena Maranjianowns shares of Time Warner Cable and Apple, but she holds no other position in any company mentioned.Click hereto see her holdings and a short bio. The Motley Fool owns shares of Chimera Investment, Apple, Dendreon, and IBM.Motley Fool newsletter serviceshave recommended buying shares of Apple and Westport Innovations, as well as creating a bull call spread position in Apple. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.
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