In this piece, we will take a look at the ten finance stocks to buy according to George Soros’ Soros Fund Management. If you want to jump ahead to the top fives stocks in this list, then take a look at 5 Finance Stocks to Buy Today According to George Soros’ Soros Fund Management.
George Soros is a Hungarian-American investor who is one of the most renowned figures in the financial world. Mr. Soros is in charge of the hedge fund Soros Fund Management, which is headquartered in New York.
The hedge fund executive set up Soros Fund Management in 1970 after he had spent close to two decades in the financial world. Mr. Soros’ background is full of struggles and hardships, in stark comparison to some of his other hedge fund peers. He is a first hand witness of the second world war, as he grew up in Hungary when it was invaded by Nazi Germany in 1944.
He enrolled in the prestigious London School of Economics in 1947 and graduated with a bachelor’s degree in philosophy four years later. After this, he would also receive a graduate degree in the same field from the same institute in 1954. After graduation, the now billionaire hedge fund executive began his career at the merchant bank Singer & Friedlander. Two years later he would move to the United States and start working as an arbitrage trader. A couple of years later Mr. Soros would once again switch a job and started working at the investment firm Wertheim & Co. His goal at the time was to save enough money to further study philosophy.
Mr. Soros’ philosophical interests overlapped with the financial world at the time, as he ended up developing the financial theory of reflexivity. This theory is centered around the study of the domain of knowledge, and when applied to the investing world, it states that the market price is often influenced by the ideas of participants instead of being driven by the fundamental values of the items being traded.
The executive’s first tryst with setting up a hedge fund was in 1966 after he set up a fund with family money. After this, he proceeded to create the Double Eagle hedge fund in 1969 with more than $4 million in capital. He would leave First Eagle in 1973, three years after creating Soros Fund Management. The hedge fund would later be renamed Quantum Funds, which is a hedge fund advised by Mr. Soros through Soros Fund Management. Soros Fund Management averaged an eye popping 20% annual return for the four decades ending in 2010. During these years, he would also be called ‘the man who broke the bank of England’ due to his success with shorting the British Pound in 1992.
He is one of the most philanthropic hedge fund executives out there, a trait influenced by the troubled times that he experienced during his young adulthood. The executive was worth $8.6 billion as of April 2022, after he donated a whopping $17 billion to the Open Society Foundation in 2017. This brought his total contributions to the organization to $32 billion.
In this piece we will focus on Soros Fund Management’s top finance stock picks out of the hedge fund’s $7 billion portfolio. The top three holdings in the area are in iShares 7-10 Year Treasury Bond ETF (NASDAQ:IEF), MGM Growth Properties LLC (NYSE:MGP), and Focus Financial Partners Inc. (NASDAQ:FOCS).
George Soros of Soros Fund Management
Our Methodology
In order to pick out the top finance stocks, we scanned Soros Fund Management’s filings with the SEC for the fourth quarter of last year. After selecting the companies, they were analyzed through their earnings, investor reports, analyst coverage, large shareholders, and hedge fund sentiment courtesy of Insider Monkey’s survey of 924 hedge funds for Q4 2021.
10. Equitable Holdings, Inc. (NYSE:EQH)
Soros Fund Management’s Stake Value: $10.7 million
Percentage of Soros Fund Management’s 13F Portfolio: 0.14%
Number of Hedge Fund Holders: 45
Equitable Holdings, Inc. (NYSE:EQH) is a diversified financial company operating out of New York, New York, United States. It was set up in 1859, and it is responsible for providing a host of services such as annuity products, deferred tax investment, retirement management, investment management, and others.
Soros Fund Management owned 329,046 Equitable Holdings, Inc. (NYSE:EQH) shares by the end of the fourth quarter of last year, enabling it to hold a $10.7 million stake. Insider Monkey’s Q4 2021 hedge fund research revealed that 45 out of 924 funds had also invested in the firm.
Equitable Holdings, Inc. (NYSE:EQH) reported $3.3 billion in revenue and $1.54 in non-GAAP EPS, missing analyst revenue estimates but beating them for EPS. Barclays raised its price target to $42 from $39 in January 2022, stating that interest rates should increase soon.
MGM Growth Properties LLC (NYSE:MGP), iShares 7-10 Year Treasury Bond ETF (NASDAQ:IEF), and Focus Financial Partners Inc. (NASDAQ:FOCS) are joined by Equitable Holdings, Inc. (NYSE:EQH) in the list of Soros Fund Management’s favorite stock picks.
9. Intuit Inc. (NASDAQ:INTU)
Soros Fund Management’s Stake Value: $11.9 million
Percentage of Soros Fund Management’s 13F Portfolio: 0.16%
Number of Hedge Fund Holders: 82
Intuit Inc. (NASDAQ:INTU) is a financial management and products compliance service provider based out of Mountain View, California, United States. It allows customers to manage their daily businesses, manage accounts, payroll processing, and federal tax filing.
Mr. Soros’ hedge fund had an $11.9 million stake in Intuit Inc. (NASDAQ:INTU) during Q4 2021, which came through owning 18,625 shares. It represented 0.16% of the fund’s investment portfolio. Insider Monkey’s survey of 924 hedge fund holdings for the same time period outlined that 82 had owned the company’s shares.
By the end of its second fiscal quarter, Intuit Inc. (NASDAQ:INTU) had raked in $2.7 billion in revenue and $1.55 in non-GAAP EPS, for a disappointing set of results that saw it miss Wall Street analyst estimates for both. Subsequently, Stifel reduced the company’s share price target to $580 from $600 in March 2022, as it reflected on the headwinds to the software sector from the Russian invasion of Ukraine.
Intuit Inc. (NASDAQ:INTU)’s largest investor is Terry Smith’s Fundsmith LLP which owns 3.7 million shares worth $2.4 billion.
Baron Funds mentioned the company in its fourth quarter 2021 investor letter, outlining that:
“Intuit Inc. is the leading provider of accounting and tax preparation software. Shares increased after the company reported quarterly results that beat Street estimates, with 22% revenue growth in the Small Business segment and record-high revenue from Credit Karma. The company closed the acquisition of MailChimp, which expands its product offering and is accretive to EPS. Management increased full-year guidance to reflect better organic growth and the contribution from MailChimp. We continue to own the stock due to Intuit’s strong competitive position and numerous growth opportunities. We have several investments in software companies that help businesses manage their financial processes and operations. Intuit Inc. provides accounting and payroll solutions for small businesses as well as tax preparation software for consumers and tax professionals.”
8. BGC Partners, Inc. (NASDAQ:BGCP)
Soros Fund Management’s Stake Value: $14.5 million
Percentage of Soros Fund Management’s 13F Portfolio: 0.19%
Number of Hedge Fund Holders: 26
BGC Partners, Inc. (NASDAQ:BGCP) is a financial brokerage and technology company that offers services such as fixed income, bond, and debt instruments alongside credit derivates, insurance, futures, and options. It also offers trade execution, brokerage, consultation, and other services.
BGC Partners, Inc. (NASDAQ:BGCP) reported $461 million in revenue and $0.17 in non-GAAP EPS, meeting analyst estimates for EPS but missing them for revenue. Credit Suisse set an Outperform rating and a $7 share price target for the company in February 2022, stating that the rise in interest and spot rate will translate into strong future growth for the company.
Soros Fund Management owned 3.1 million BGC Partners, Inc. (NASDAQ:BGCP) shares during Q4 2021, reflecting its $14.5 million stake. 26 of the 924 hedge funds profiled by Insider Monkey during the same time period also owned the company’s shares.
BGC Partners, Inc. (NASDAQ:BGCP)’s largest investor is Amy Minella’s Cardinal Capital which owns 15.6 million shares worth $72 million.
7. OneMain Holdings, Inc. (NYSE:OMF)
Soros Fund Management’s Stake Value: $16.5 million
Percentage of Soros Fund Management’s 13F Portfolio: 0.22%
Number of Hedge Fund Holders: 44
OneMain Holdings, Inc. (NYSE:OMF) is a consumer finance and insurance provider headquartered in Evansville, Indiana, United States. It originates and underwrites loans, and offers life, disability, and involuntary unemployment insurance among others.
For its fiscal Q4, OneMain Holdings, Inc. (NYSE:OMF) posted $1 billion in revenue and $2.38 in non-GAAP EPS, missing analyst revenue estimates but beating them for revenue. JPMorgan reduced its price target to $56 from $64 in January 2022, as it outlined that the change reflected a cyclical peak highlighted by the macroeconomic environment.
During Q4 2021, Soros Fund Management owned 330,933 OneMain Holdings, Inc. (NYSE:OMF) shares during the fourth quarter of last year, for a $16.5 million stake that translated into 0.22% of its investment portfolio. Insider Monkey’s Q4 2021 analysis of 924 hedge funds listed 44 as also having invested in the company.
Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital is OneMain Holdings, Inc. (NYSE:OMF)’s largest investor. It owns 2.4 million shares worth $121 million.
ClearBridge Investments mentioned the company in its fourth quarter 2021 investor letter. Here is what the fund said:
“Similar to the energy sector, the financials sector is also trading at very depressed multiples relative to the market. While the sector’s strong fundamentals received some recognition in 2021, it was rewarded with substantially lower valuations than it should have had. Despite earnings growing over 30% and exceeding the overall market’s, financial stock multiples stayed flat and are currently selling at a discount of roughly 9x forward earnings.
Consumer lender OneMain is an excellent representation of the divide between perception and reality. Similar to the market’s outlook on natural gas prices for EQT, the outlook for consumer credit metrics are worse than the current reality. It is inevitable that record-low delinquencies and loss rates will rise. However, the market’s perception of these headwinds to future earnings growth has been excessive. Higher loan losses are just one piece of a larger pie, and we believe that accelerating loan growth and associated operating leverage provides a buffer to allow OneMain to continue to compound earnings for the foreseeable future. Concerns about credit have completely overshadowed these positive drivers and have resulted in the stock trading at just 5x its projected cash earnings for 2022.”
6. Marqeta, Inc. (NASDAQ:MQ)
Soros Fund Management’s Stake Value: $17.5 million
Percentage of Soros Fund Management’s 13F Portfolio: 0.24%
Number of Hedge Fund Holders: 39
Marqeta, Inc. (NASDAQ:MQ) is a financial technology company whose products are used by businesses, banks, and financial institutions. These allow the companies to issue various kinds of cards and conduct transaction processing services.
Mr. Soros’ hedge fund owned one million Marqeta, Inc. (NASDAQ:MQ) shares during the fourth quarter of 2021, for a $17.5 million stake representing 0.24% of its investment portfolio. During the same time period, 39 out of 924 hedge funds also owned the company’s shares, Insider Monkey found out after it analyzed the relevant holdings.
Marqeta, Inc. (NASDAQ:MQ) raked in $155 million in revenue and -$0.07 in GAAP EPS for its fiscal fourth quarter, beating analyst estimates for both. Barclays raised its price target to $19 from $17 in April 2022, stating that not only does the company’s card system form the backbone of the financial technology sector, but it is also set for explosive future growth.
Marqeta, Inc. (NASDAQ:MQ)’s largest investor is Mick Hellman’s HMI Capital which owns 20 million shares worth $353 million.
Alger mentioned Marqeta, Inc. (NASDAQ:MQ) in its fourth quarter 2021 investor letter, outlining that:
“Margeta facilitates the implementation of digital payment technologies. It is a Positive Dynamic Change beneficiary in the digital payments industry. We believe as more commerce is conducted digitally, the digitization and transformation of the payments ecosystem is needed, which Margeta seeks to address through its modern payment card issuing platform, providing infrastructure and tools for building configurable payment cards. Margeta offers issuer processor services and acts as a card program manager. Its platform creates customized payment cards that provide innovative payment experiences for their clients’ customers and end users.
Marqeta has emerged as a card issuing platform category leader in many disruptive verticals, including on-demand delivery, alternative lending, expense management, disbursement, digital remittances, and digital banks. Margeta’s solutions are even sought out by large financial institutions to improve their existing offerings and stay competitive with technology-focused new market entrants. Margeta detracted from performance despite achieving strong revenue growth with higher gross profitability and an expanded customer base in the third quarter. We believe the expiration of a lock up period and the company facing tough comparisons resulting from COVID-19 stimulus payments having boosted consumer spending contributed to the underperformance of Marqeta shares. Additionally, the still small footprints within the Margeta revenue base of crypto, truck brokerage and business-to-business clients may take time to scale.”
Along with iShares 7-10 Year Treasury Bond ETF (NASDAQ:IEF), MGM Growth Properties LLC (NYSE:MGP), and Focus Financial Partners Inc. (NASDAQ:FOCS), Marqeta, Inc. (NASDAQ:MQ) is a favorite George Soros investment.
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Disclosure: None. 10 Finance Stocks to Buy Today According to George Soros’ Soros Fund Management is originally published on Insider Monkey.
