Billionaire George Soros’ Top Picks and Notable Moves Ahead of 2017

Last year, billionaire George Soros lost his social and political clout by betting against the winning candidate, Donald Trump, during the U.S. presidential election. Aside from the money he donated to pro-Clinton Super PACs or to liberal charities, his own hedge fund Soros Fund Management, is estimated to have lost $1 billion in 2016, according to research done by hedge-fund investor LCH Investments NV. However, the fund made some major changes to its portfolio going into 2017 and in this post we are going to focus on them

According to the latest 13F filing submitted by Soros Fund Management, its long US equity portfolio at the end of 2016 was worth $4.32 billion at the end of December, which was 8.2% higher compared to the end of September. The equity portfolio had an extremely high turnover ratio of 115.12% last quarter and at the last of December, the top 10 equity holdings alone amassed over 50% of the value.

We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively the most bullish on. Over the past year, this strategy generated returns of 39.7%, topping the 24.1% gain registered by S&P 500 ETFs. See our list of 140 biggest and most famous activist hedge funds. Insider Monkey’s enhanced small-cap strategy registered gains of more than 45% over the last 12 months and outperformed SPY by more than 30 percentage points in the last 4.5 years (see the details here).

Time Warner Inc (NYSE:TWX)

– Shares Held By Soros Fund Management (as of December 31): 434,000

– Value of The Holding (as of December 31): $41.9 Million

Let’s begin with Time Warner Inc (NYSE:TWX), which represented a new position in Soros Fund Management’s equity portfolio in the fourth quarter. At the beginning of the fourth quarter, telecom giant AT&T Inc. (NYSE:T) announced that it has reached a deal with Time Warner Inc (NYSE:TWX) to acquire it for $85.4 billion. Following this announcement, shares of Time Warner rose significantly and ended the fourth quarter with gains of over 20%. However, they have been range bound this year and are trading at a significant discount to the $107.50 per share offer made by AT&T, which points to concerns among market participants about the deal getting completed. On February 15, Time Warner shareholders approved the proposed merger with AT&T, but the deal still needs to gain several regulatory approvals before it materializes. Following Time Warner’s better than expected four quarter result declaration earlier this month, on February 9, analysts at FBR & Co. reiterated their ‘Buy’ rating on the stock.

Key Energy Services, Inc. (NYSE:KEG)

– Shares Held By Soros Fund Management (as of December 31): 1.85 Million

– Value of The Holding (as of December 31): $59.13 Million

Similar to Time Warner, Key Energy Services, Inc. (NYSE:KEG) was also a new entrant in Soros Fund Management’s equity portfolio. The company was delisted from NYSE last July after its stock had started trading at ‘abnormally low’ levels. However, the stock got relisted in late-December last year after the company emerged from Chapter 11 bankruptcy. Key Energy Services, Inc. (NYSE:KEG) revealed that after emerging from bankruptcy it was able to reduce its debt burden by $694 million by issuing fresh equity to bondholders. The company is yet to report its quarterly results after emerging out of bankruptcy.

Williams Companies Inc (NYSE:WMB)

– Shares Held By Soros Fund Management (as of December 31): 2.35 Million

– Value of The Holding (as of December 31): $73.22 Million

After having initiated its stake in the energy infrastructure firm during the third quarter, Soros Fund Management lowered its holding by 25% during the fourth quarter. Williams Companies Inc (NYSE:WMB)’s stock nearly doubled in the period between March 2016 and September 2016, but has been in correction mode since then. On February 15, the company reported its fiscal 2016 fourth quarter results, declaring adjusting income from continuing operations of $0.17 per share, which was $0.01 lower than what analysts had expected. Nevertheless, its cash flow from operations for the fourth quarter amounted to $1.58 billion and was up by $990 million year-over-year. Earlier this month, analysts at Deutsche Bank AG initiated coverage on the stock with a ‘Hold’ rating and $32 price target, suggesting a potential upside of over 13%.

Adecoagro SA (NYSE:AGRO)

– Shares Held By Soros Fund Management (as of December 31): 11.92 Million

– Value of The Holding (as of December 31): $123.7 Million

Adecoagro SA (NYSE:AGRO) has been a part of Soros Fund Management’s portfolio since the first quarter of 2011. And, although the fund made no changes to its stake in the company during the fourth quarter of 2016, it still has reasons to be pleased with itself considering that Adecoagro SA (NYSE:AGRO)’s has appreciated by almost 22% since the beginning of 2017.  While most analysts who track the stock think that it is reasonably priced right now, some of them are of the view that it still has further upside left because its trading at a discount when compared to other Latin American farming/farmland companies.

Liberty Broadband Corp (NASDAQ:LBRDK)

– Shares Held By Soros Fund Management (as of December 31): 8.32 Million

– Value of The Holding (as of December 31): $616.47 Million

While Soros Fund Management lowered its stake in Liberty Broadband Corp (NASDAQ:LBRDK) by 6% during the last three months of 2016, the company still remained the fund’s top pick heading into 2017. Liberty Broadband Corp (NASDAQ:LBRDK) is basically a holding company that owns stakes in several entities, most notably Charter Communications, Inc. (NASDAQ:CHTR). In the last year, shares of Liberty Broadband Corp have advanced by over 80% owing to the value of its holdings rising significantly and also due to the news that Verizon Communications Inc. (NYSE:VZ) might be interested in acquiring Charter Communications. However, most market experts have dismissed the possibility of such a deal citing the regulatory hurdles it would face.

Disclosure: None