Billionaire George Soros‘ Soros Fund Management recently disclosed a new buy in $145.2 million cap company, Exa Corp (NASDAQ:EXA). The filling with the Securities and Exchange Commission showed that Mr. Soros acquired 1.27 million shares of the company, which represent 9.15% of the company’s outstanding stock. The move comes amid the company reporting its financial results for the fourth quarter and full year fiscal 2015, which ended January 31, 2015. Revenue increased by 11% in the fourth quarter when compared to the same quarter one year prior, to $16.9 million from $15.2 million. Along with this, it reported a fiscal fourth-quarter loss of $1.1 million, versus a profit of around $100,000 in the same period a year earlier. For the year, revenue increased by 13% to $61.4 million, compared to $54.5 million in fiscal 2014. Also, it reported a significantly greater loss compared to the previous year, which widened to $19.2 million, from $(0.7) million in fiscal 2014.
Exa Corp is a company that develops, sells, and supports simulation software and services for vehicle manufacturers. Among the funds that we track, another shareholder of Exa Corp (NASDAQ:EXA) is John H Lewis’ Osmium Partners, which holds some 444.100 shares as of the end of 2014, up by 6% on the quarter. The position valued at $5.2 million amasses 3.8% of the fund’s equity portfolio.
Aside from Exa Corp (NASDAQ:EXA), we should also take a look at some other investments of Soros Fund Management. The fund disclosed an equity portfolio valued at some $9.16 billion as of the end of 2014. The equity portfolio is mainly invested in Technology (27%), Health Care (18%), and Finance (11%) stocks. The fund also invests in many small-cap stocks, which is one more reason why we should follow closer its activity. Our research has showed that immitating the hedge fund’s activity among small-cap stocks can help beat the market by around 1.0 percentage point per month. Based on this research, we have been sharing 15 most popular small-cap picks among hedge funds in our newsletters since August 2012. Since then, our strategy returned 132%, beating the market by around 79 percentage points.
Since Mr. Soros has a significant exposure to the Technology sector, let’s take a look at three tech stocks in which the investor holds largest stakes in terms of value. These companies are Alibaba Group Holding Ltd (NYSE:BABA), Yahoo! Inc. (NASDAQ:YHOO), and Polycom Inc (NASDAQ:PLCM).
The largest tech holding in the fund’s equity portfolio is represented by Alibaba Group Holding Ltd (NYSE:BABA). Soros Fund Management disclosed holding 4.4 million shares of China’s biggest online commerce company, with an aggregate value of $457.33 million. Among the funds that we track, Billionaire Dan Loeb’s Third Point is the biggest shareholder of Alibaba Group Holding Ltd (NYSE:BABA), which holds 10 million shares, up by 39% on the quarter, according to its last 13F filing. The $1.04 billion position represents a significant portion of Mr. Loeb’s portfolio, reaching 9.37% of its value and being the second-largest. The stock of the e-commerce company lost around 9% since its IPO, but analysts still keep a strong outlook on the stock. However, on Friday JPMorgan cut its price target on the stock to $109 from $117, maintaining ‘Overweight’ rating. So far this year, JPMorgan is the sixth analyst to lower its price target on Alibaba Group Holding Ltd (NYSE:BABA). Overall, the stock has a consensus price target of $107.70.
In Yahoo! Inc. (NASDAQ:YHOO) the fund disclosed holding 1.87 million shares, down by 64% on the quarter; the value of the stake amounting to $94.30 million. Yahoo! Inc. (NASDAQ:YHOO) represents one of Mr. Soros’ long term investments. However, during the second quarter of 2014, the stake was closed and then re-opened during the following quarter. The move coincides with Alibaba’s IPO, in which Yahoo owns a significant equity position that is not reflected in its market value. Among the funds that we track, the largest shareholder of Yahoo! Inc. (NASDAQ:YHOO) is David. E. Shaw’s D.E. Shaw, which reduced its stake by 31% on the quarter to 13.54 million shares held as of the end of 2014.
Moreover, among the largest technology stakes in Soros Fund Management’s equity portfolio, one holding is represented by a small-cap stock. This company is Polycom Inc (NASDAQ:PLCM), a $1.81 billion company, whose stock gained 20.2% during last year. The fund initiated a stake in Polycom Inc (NASDAQ:PLCM more than five years ago and at the end of 2014, it held 10.62 million shares, down from 11.47 million shares a year earlier, the value of the stake amounting to $143.14 million. Another fund that owns shares of Polycom Inc (NASDAQ:PLCM) is Malcolm Fairbairn‘s Ascend Capital, holding 3.45 million shares, up by 21% on the quarter; the value of the stake amounts to $46.57 million as of the end of 2014. Polycom is a communication equipment company that provides solutions that allow enterprise, government, education & healthcare customers to collaborate over distance. Recently Polycom has signed a contract with the Australian partner Telstra to deliver its RealPresence One product, as well as making progress in negotiations with an African based-bank and a semiconductor company.
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