5 Big Moves From Soros’ Q2 Portfolio: From Facebook To Liberty Broadband

George Soros became especially notorious after “breaking the Bank of England,” and has since been one of the best-known investors in the world. After taking a few years off, Soros decided to return to actively managing his family office’s investments. Soros Fund Management currently stands among the largest hedge funds in the world, with roughly $29 billion in assets under management and a U.S. equity portfolio valued at approximately $4.67 billion as of June 30.

After a second quarter in which it made 274 adjustments to its portfolio, the firm’s holdings remained focused on information technology stocks (41% of its portfolio’s value), finance stocks (28%), and consumer discretionary stocks (19%), with the ten largest positions accounting for more than half of its portfolio’s value. In this article we’ll take a look at five large moves that Soros Fund Management made during the April-to-June period, and discuss how they have been performing recently.

At Insider Monkey, we track more than 765 hedge funds and institutional investors. Through extensive backtests, we have determined that imitating some of the stocks that these investors are collectively bullish on can help retail investors generate double digits of alpha per year. The key is to focus on the small-cap picks of these funds, which are usually less followed by the broader market and allow for larger price inefficiencies (see more details).

Facebook Inc (NASDAQ:FB) Position Closed

– Shares Owned by Soros Fund Management (as of March 31): 442,696

– Value of Soros Fund Management’s Stake (as of March 31): $50.5 Million

Let’s start with Facebook Inc (NASDAQ:FB), a position that accounted for more than 1% of the value of Soros’ U.S. equity portfolio on March 31, but which was sold out of during the second quarter. Despite plenty of volatility, the stock ended the second quarter nearly flat, though the fund doubtless took some profits from the sale, given Facebook’s performance prior to April. Another fund that sold out of the social media behemoth during the period was David Tepper’s Appaloosa Management, which disposed of its 1.62 million shares during the quarter. On the other hand, 20 billionaires among those we track remained long Facebook as of June 30, making it the second-most popular tech stock among them.

While, in retrospect, selling out might seem like a not-so-good call, given Facebook’s 8.3% surge since the second quarter ended, profits were certainly taken. In addition, it should be noted that, over the same period, the Nasdaq index gained 9.55%. One of the latest spikes in Facebook’s stock was seen a few days ago, after the company announced that it was changing its News Feed algorithm to reduce the number of misleading headlines shown. According to the firm, these are some of the kinds of stories that it is trying to avoid: “When She Looked Under Her Couch Cushions And Saw THIS… I Was SHOCKED!” or “The Dog Barked At The Deliveryman And His Reaction Was Priceless.” Or in other words, the clickbait that passes for headlines on most sites nowadays.

Equinix Inc (NASDAQ:EQIX) Stake Also Liquidated

– Shares Owned by Soros Fund Management (as of March 31): 206,215

– Value of Soros Fund Management’s Stake (as of March 31): $68.19 Million

Another position Soros closed out over the second quarter of 2016 was its Equinix Inc (NASDAQ:EQIX) stake, of which it held 206,215 shares of, worth almost $68.2 million on March 31. The move certainly looks like a smart one, given the stock’s 5.33% tumble seen since June 30, which was largely driven by the sale of eight European data center assets to Digital Realty Trust, Inc. (NYSE:DLR) and the acquisition of Digital Realty’s operating business, including real estate and data center facilities, in St. Denis, Paris.

Soros was not the only fund that sold out of Equinix during the second quarter. Another institutional investor that closed out of its stake in the company was Dmitry Balyasny’s Balyasny Asset Management, which got rid of the 84,440 shares it owned on March 31 during the period.

We’ll check out three stocks that Soros Fund Management was bullish on during the second quarter on the next page.

Communications Sales & Leasing Inc (NASDAQ:CSAL)

– Shares Owned by Soros Fund Management (as of June 30): 730,898

– Value of Soros Fund Management’s Stake (as of June 30): $21.12 Million

Communications Sales & Leasing Inc (NASDAQ:CSAL) was one of the 79 stocks that Soros added to its equity portfolio during the second quarter. Ken Griffin’s fund also opened a large stake in the company during the quarter, having declared holding 3.15 million shares of the company as of June 30. Messrs. Griffin and Soros were among the five billionaires in our database long CSAL on June 30, with their combined stakes valued at $225.8 million as of June 30.

Shares of Communications Sales & Leasing have gained more than 58% year-to-date, posting a 32% surge over the second quarter. Over the third quarter, the stock has risen by another 4.6%. However, in the past week, shares were particularly volatile and ultimately down by more than 2%, mostly on the back of last Thursday’s earnings report released by the company. While second quarter FFO of $0.66 came in $0.01 ahead of the Street’s consensus, revenue of $188.6 million, up by 46.5% year-over-year, missed estimates by $440,000.

Rovi Corporation (NASDAQ:ROVI)

– Shares Owned by Soros Fund Management (as of June 30): 4.07 million

– Value of Soros Fund Management’s Stake (as of June 30): $63.6 million

One of Soros’ most bullish moves during the quarter was in Rovi Corporation (NASDAQ:ROVI). Over the second quarter, Soros greatly boosted its exposure to the company, increasing its bonds position by 54% to 98.56 million bonds, and acquiring 4.06 million shares of the company worth $63.6 million. The equity position makes Soros Fund Management the largest hedge fund investor of record in our database, trailed by Driehaus Capital’s position of 3.02 million shares worth $47.18 million as of June 30.

Over the first couple of months of 2016, Rovi Corporation (NASDAQ:ROVI)’s performance had been great. However, the stock plummeted during March and April, opening an attractive entry point for investors. After tumbling by 23.7% in the second quarter, the shares rebounded, recuperating 28.5% of their value between July 1 and August 17, helped by a second quarter top- and bottom-line beat, a patent license renewal with Verizon Communications Inc. (NYSE:VZ), and important advances related to its TiVo Inc. (NASDAQ:TIVO) acquisition.

Liberty Broadband Corp (NASDAQ:LBRDK)

– Shares Owned by Soros Fund Management (as of June 30): 8.89 Million

– Value of Soros Fund Management’s Stake (as of June 30): $533.52 Million

Finally, there’s Liberty Broadband Corp (NASDAQ:LBRDK), Soros’ largest new position, and second-largest equity stake as of June 30. Only Barry Rosenstein’s JANA Partners held a larger stake in the company, comprising 9.2 million shares. A total of five billionaires in our database were long the stock at the end of the second quarter.

Shares of Liberty Broadband Corp (NASDAQ:LBRDK) were volatile throughout the second quarter, but ultimately ended it up by 2.83%. However, Soros could have bought in for prices as low as $55.32 per share, with the stock now trading around $67.95. One of Liberty Media’s three tracking stocks, Liberty Broadband trades at an NAV discount of approximately 13%, which President and CEO Greg Maffei expressed surprise at during the company’s second quarter earnings call. Liberty Broadband completed its acquisitions of Time Warner Cable and Brighthouse during the quarter.

Disclosure: Javier Hasse holds no interest in any of the securities or entities mentioned above.