Billionaire George Soros is Selling These 5 Stocks in 2022

2. OneMain Holdings, Inc. (NYSE:OMF)

Number of Hedge Fund Holders: 44

OneMain Holdings, Inc. (NYSE:OMF) is an American financial services holding company that specializes in consumer finance and insurance. Soros Fund Management held 330,933 shares of OneMain Holdings, Inc. (NYSE:OMF) in the fourth quarter of 2021, worth $16.5 million. The hedge fund discarded its entire stake in Q1 2022. 

On May 2, Citi analyst Arren Cyganovich lowered the price target on OneMain Holdings, Inc. (NYSE:OMF) to $54 from $72 and maintained a Buy rating on the shares. The company’s Q1 results reflect that the non-prime consumer demand remains robust, credit is normalizing but still lower than the long-term average, and OneMain Holdings, Inc. (NYSE:OMF)’s liquidity and funding should be solid while rates are soaring, the analyst told investors in a research note. However, with higher global macro risk and investor concern about a U.S. recession, the analyst slashed the price target.

According to Insider Monkey’s database, OneMain Holdings, Inc. (NYSE:OMF) was found in the public stock portfolios of 44 hedge funds at the end of Q4 2021, up from 41 funds in Q3. David Zorub’s Parsifal Capital Management owned a prominent stake in OneMain Holdings, Inc. (NYSE:OMF) in the first quarter of 2022, comprising 2.14 million shares worth $101.4 million. 

Here is what ClearBridge Investments All Cap Value Strategy has to say about OneMain Holdings, Inc. (NYSE:OMF) in its Q4 2021 investor letter:

“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.”