Below we took a look at George Soros Net Worth and Top 5 Holdings Heading into 2023. For our methodology and a more comprehensive list please see George Soros Net Worth and Top 10 Holdings Heading into 2023.
5. D.R. Horton, Inc. (NYSE:DHI)
Value of Soros Fund Management’s 13F Position: $176 million
Number of Hedge Fund Shareholders: 43
Kicking off the top five of billionaire George Soros’ top holdings is homebuilder D.R. Horton, Inc. (NYSE:DHI), which the wealthy philanthropist’s family office trimmed its stake in by 13% during Q3, ending the quarter with 2.62 million shares. Hedge fund ownership of DHI dipped during each of the first three quarters of 2022, falling by 22% during that time.
Despite a challenging macro environment for homebuilders which is expected to persist throughout 2023, D.R. Horton, Inc. (NYSE:DHI) has posted some impressive results. In its fiscal Q4, the company grew sales by 19% to $9.6 billion, while its EPS jumped by 26% year-over-year to $4.67. Wedbush analyst Jay McCanless believes DHI is one of the homebuilder stocks that is worth owning in 2023 should the rate environment be favorable, given its ability to more quickly react to market demands and build homes in a timely manner. He has an ‘Outperform’ rating on the stock.
According to Third Avenue Management, D.R. Horton, Inc. (NYSE:DHI) complies with Founder Marty Whitman’s “Safe and Cheap” maxim, as discussed in the fund’s Q2 2022 investor letter:
“D.R. Horton, Inc. (NYSE:DHI) is the largest homebuilder in the US by volume (the company sold more than 90k homes in the past year) with a well-recognized focus on delivering quality product at the entry-level price point (its average selling price is less than $400k) and market-leading positions in key Sunbelt markets.
While the near-term outlook for DR Horton remains uncertain given the adjustments occurring in the US residential markets, the medium-to-long-term prospects for volume-based homebuilders with super-strong balance sheets and scale advantages continues to be promising in Fund Management’s view. More specifically, (i) residential inventories remain around record-low levels in most major markets when gauged by aggregate units available (see chart below), (ii) demand for single-family residences seem to have multiple secular drivers as the largest generation in US history (the “millennial cohort”) enters its prime home buying years and desires more space not only due to “life events” but also “remote” and “hybrid” working arrangements, and (iii) significant inflation in rental rates for multi-family units in urban areas has left the rent-to-own proposition for single-family homes in suburban areas in a compelling range (particularly in the Sunbelt region which is experiencing outsized job growth and wage growth relative to broader national figures).
In Fund Management’s view, the two industry participants that seem most likely to take part in this shift include DR Horton and Lennar Corp. (a long-held position in the Fund). In conjunction, these two “blue-chip builders” now account for approximately 10% of the Fund’s capital, as well as roughly one out of every five new homes built in the Sunbelt. They would also qualify under Third Avenue Founder Marty Whitman’s “Safe and Cheap” maxim as both companies are nearly “net-cash” (i.e., more cash than debt) with common stocks trading at less than five times trailing earnings, on average.”
4. Amazon.com, Inc. (NASDAQ:AMZN)
Value of Soros Fund Management’s 13F Position: $224 million
Number of Hedge Fund Shareholders: 272
Soros Fund Management trimmed its stake in Amazon.com, Inc. (NASDAQ:AMZN) by 2% during the third quarter, owning over 1.98 million shares of the ecommerce giant at the end of Q3. Amazon has consistently ranked among the five most popular stocks among hedge funds over the last seven years. Several prominent money managers have billion-dollar stakes in AMZN, including Ken Fisher, Warren Buffett, and Ken Griffin.
Amazon.com, Inc. (NASDAQ:AMZN) shares plunged by nearly 50% in 2022 but could be poised for a big bounce back in 2023 should the expected recession not prove as deep as anticipated. As noted in the first part of the article, Alphabet Inc. (NASDAQ:GOOG) and Meta Platforms, Inc. (NASDAQ:META) have been losing some of their share of the digital ad market, with Amazon being one of the companies eating into it. AWS growth could also reaccelerate in a more positive business environment.
Perhaps most importantly, the profitability of Amazon’s core ecommerce business should improve in 2023 given moderating inflation, lower fuel costs, and the heavy lifting of bolstering its fulfillment network now behind it.
Farnam Street Investments quoted Amazon.com, Inc. (NASDAQ:AMZN) CEO Jeff Bezos in its Q3 2022 investor letter:
“Change doesn’t just impact investors. Business people also bet for or against change. Jeff Bezos was once asked this exact question:
“You can build a business strategy around the things that are stable in time. It’s impossible to imagine a future ten years from now where a customer comes up and says, ‘Jeff, I love Amazon, I just wish the prices were a little higher.’ Or, ‘I love Amazon, I just wish you’d deliver a little slower.’ Impossible. So we know the energy we put into these things today will still be paying off dividends ten years from now. When you have something you know is true, you can afford to put a lot of energy into it.”
A lot of energy… and more than $172 billion in capital expenditure in the last fifteen years.
Deeper, slower moving layers turn exponential growth into “S-curves.” A rapidly dividing bacteria crashes into the resource-wall of its Petri dish. Nineteenth-century commercial robber barons were smacked by the governance layer of the Sherman Antitrust act. Amazon (NASDAQ:AMZN) Prime free shipping leaned on the creaking infrastructure of the U.S. Postal Service until it was forced to invest in its own infrastructure (all those delivery vans you see driving around).
Hopefully, next time you’re thinking about change, you can recall pace layers as a helpful construct to understand how successful systems change.
3. Duke Realty Corporation (NYSE:DRE)
Value of Soros Fund Management’s 13F Position: $308 million
Number of Hedge Fund Shareholders: 26
Soros appears to be bullish on the long-term prospects of the housing market given his stakes in DHI and Duke Realty Corporation (NYSE:DRE), the latter of which he raised the size of by 2,332% during Q3, lifting it to 6.39 million shares. Hedge fund ownership of DRE has doubled over the last year, helped along by John Paulson’s Paulson & Co and Dmitry Balyasny’s Balyasny Asset Management each adding Duke Realty to their 13F portfolios during Q3.
Duke Realty Corporation (NYSE:DRE) was acquired by industrial-focused REIT Prologis, Inc. (NYSE:PLD) on October 3 in a deal valued at $23 billion. That was actually less than the $24 billion Prologis has initially offered for the company back in May, which at the time was deemed “insufficient”. The acquiring firm plans to retain about 94% of Duke’s assets, or about 142 million square feet of property, as well 1,200 acres of undeveloped land that Duke either owns or controls.
The Baron Real Estate Income Fund had also been buying more shares of Duke Realty Corporation (NYSE:DRE) recently in anticipation of the merger, as revealed in its Q2 2022 investor letter:
“Shares of Duke Realty Corporation, a $25 billion industrial REIT, declined only 7% in the second quarter, in large part because the company agreed to merge with Prologis at a 30% premium. We acquired additional shares in the company in the most recent quarter. We are optimistic about the prospects for the combined Prologis/Duke Realty entity. Prologis is merging with its largest REIT competitor in Duke Realty. Duke’s industrial portfolio is among the best in industrial real estate. The company has an excellent track record in development and construction. We believe the merger has strategic and financial merits including acquiring a high-quality portfolio in mostly similar or attractive real estate markets and the likelihood of realizing both additional revenue and cost savings. We will have more to say on Prologis/Duke Realty in future shareholder letters.
2. Biohaven Pharmaceutical Holding Company Ltd. (NYSE:BHVN)
Value of Soros Fund Management‘s 13F Position: $344 million
Number of Hedge Fund Shareholders: 36
Biohaven Pharmaceutical Holding Company Ltd. (NYSE:BHVN) climbed into second place among George Soros’ largest holdings after the billionaire’s family office raised its stake in the company by 82% during Q3, giving it over 2.27 million shares of BHVN. Hedge fund ownership of the Biohaven shot up during Q2 but fell even harder during Q3, tumbling by 40%.
Biohaven Pharmaceutical Holding Company Ltd. (NYSE:BHVN) is the second company among Soros’ top 3 holdings that was acquired early in the fourth quarter. In this case, Biohaven was acquired by one of the 10 Cash-Rich Stocks to Buy According to Hedge Funds, Pfizer Inc. (NYSE:PFE), which put its cash hoard to good use in the all-cash transaction valued at $11.6 billion.
Biohaven Pharmaceutical Holding Company Ltd. (NYSE:BHVN)’s calcitonin gene-related peptide (CGRP) portfolio was attractive to Pfizer given its potential to effectively treat migraine pain, which affects more than a billion people globally. Biohaven’s CGRP receptor antagonist NURTEC ODT is FDA approved for the treatment of both acute and episodic migraines in adults. The company also has an intranasal spray for migraines that is expected to receive FDA approval in the first quarter of 2023.
1. Rivian Automotive, Inc. (NASDAQ:RIVN)
Value of Soros Fund Management‘s 13F Position: $538 million
Number of Hedge Fund Shareholders: 30
Rivian Automotive, Inc. (NASDAQ:RIVN) remained George Soros’ top holding for the fourth straight quarter in Q3. Soros Fund Management sold off 9% of its stake in the company during Q3, leaving it with 16.4 million RIVN shares, which trailed only Philippe Laffont’s Coatue Management among the select group of prominent hedge funds tracked by Insider Monkey’s database.
Rivian Automotive, Inc. (NASDAQ:RIVN) appears to be in a good position to scale up its production and meet the growing demand for its electric vehicles, including an order for 100,000 vehicles from Amazon and 114,000 preorders, the latter of which grew by 16,000 during Q3. The company believes it has enough cash to last it through 2025, which gives it plenty of time to build production and improve its profitability metrics. Rivian grew vehicle production by 67% quarter-over-quarter in Q3, rolling 7,363 vehicles off its lines.
Meridian Funds remains bullish on Rivian Automotive, Inc. (NASDAQ:RIVN), but sold off its stake recently due to its less attractive relative valuation, as the fund discussed in its Q3 2022 investor letter:
“Rivian Automotive, Inc. (NASDAQ:RIVN) manufactures electric vehicles (EVs) for the consumer and commercial markets. We initially invested in the company when it was privately owned. Among the many things that differentiate this startup is its substantial cash balance and relationship with Amazon, which is both an investor in the company and the first customer for Rivian’s commercial van. Several positive developments contributed to share strength in the quarter, including the company’s announcement that production of its R1 pickup trucks and EV delivery vans increased nearly 70% over the previous quarter. Management also reaffirmed its production target of 25,000 vehicles for 2022. Despite raising the price of its R1 truck earlier this year, Rivian continued to see strong demand for its vehicles, demonstrated by 98,000 pre-orders for its R1 truck and SUV. Although we are pleased with the company’s progress, we liquidated our position as Rivian approached the high end of our market cap threshold and its relative valuation became less attractive.”
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