George Soros Stock Portfolio: Top 5 Stock Picks

In this article, we discuss the top 5 stock picks of billionaire George Soros. If you want to see more stocks in this selection, check out George Soros Stock Portfolio: Top 10 Stock Picks. 

5. D.R. Horton, Inc. (NYSE:DHI)

Number of Hedge Fund Holders: 44

Soros Fund Management’s Stake Value: $197,067,000

D.R. Horton, Inc. (NYSE:DHI) is a Texas-based homebuilding company that primarily constructs and sells single-family detached homes, townhomes, duplexes, and triplexes. The George Soros stock portfolio held nearly 3 million shares of D.R. Horton, Inc. (NYSE:DHI) in the second quarter of 2022, worth $197 million and representing 3.5% of the total 13F securities. 

On October 21, Raymond James analyst Buck Horne downgraded D.R. Horton, Inc. (NYSE:DHI) to Outperform from Strong Buy with a price target of $77, down from $103. The downgrade reflects the analyst’s more cautious outlook on the housing market as mortgage rates have destroyed affordability. He remains constructive on D.R. Horton, Inc. (NYSE:DHI) in this environment as the industry’s most cost-efficient producer of single-family housing.

According to Insider Monkey’s data, 44 hedge funds were long D.R. Horton, Inc. (NYSE:DHI) at the end of June 2022, compared to 52 funds in the preceding quarter. John Armitage’s Egerton Capital Limited is the leading position holder in the company, with 7.6 million shares worth $504 million. 

Here is what Third Avenue Management specifically said about D.R. Horton, Inc. (NYSE:DHI) in its 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 continue 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. American Campus Communities Inc (NYSE:ACC)

Number of Hedge Fund Holders: 35

Soros Fund Management’s Stake Value: $201,469,000

American Campus Communities Inc (NYSE:ACC) is a publicly traded REIT that owns multiple student housing properties. On August 4, American Campus Communities Inc (NYSE:ACC) announced that its stockholders approved the acquisition of the company by Blackstone Real Estate Income Trust. In accordance with the terms of the merger agreement, an amount in cash equal to $65.47 per share, will be paid for American Campus Communities Inc (NYSE:ACC). 

Securities filings for the second quarter of 2022 reveal that George Soros added American Campus Communities Inc (NYSE:ACC) to his portfolio by purchasing 3.12 million shares worth $201.5 million, representing 3.58% of the total securities. 

According to Insider Monkey’s second quarter database, 35 hedge funds were bullish on American Campus Communities Inc (NYSE:ACC), compared to 20 funds in the prior quarter. Dmitry Balyasny’s Balyasny Asset Management is a significant position holder in the company, with nearly 2 million shares worth $128 million. 

Here is what Baron Discovery Fund has to say about American Campus Communities, Inc. (NYSE:ACC) in its Q1 2022 investor letter:

“We initiated a new position in American Campus Communities, Inc. (NYSE:ACC), the nation’s largest developer, owner, and manager of high-quality student housing communities. The company’s 166 properties (approximately 112,000 beds) are located either on-campus or pedestrian-to-campus (94% of the company’s net operating income comes from properties that are within 1¤2 mile of campus) in submarkets with high barriers to entry. Emerging from a difficult COVID environment when many students took classes virtually and were not on campus, the company is now poised to benefit from a much more favorable fundamental backdrop. Over the next several years, we expect strong demand driven by growing student enrolment. Combined with limited new supply deliveries since many new developments were canceled during COVID, the net result is significant growth in occupancy, rent, and cash flow. In addition to the organic growth, we expect in the next few years, the company also has several greenfield developments that are underway and are expected to supplement growth as they open. As it relates to valuation, currently the company is trading at a discount to both private market values for comparable properties and to the publicly traded multi-family operators. We believe this valuation discrepancy will narrow as the company executes on its business plan. Following the completion of the quarterly letter, American Campus Communities agreed to be acquired by Blackstone for $65.47 per share.”

3. Liberty Broadband Corporation (NASDAQ:LBRDA)

Number of Hedge Fund Holders: 27

Soros Fund Management’s Stake Value: $202,352,000

Liberty Broadband Corporation (NASDAQ:LBRDA) is a Colorado-based communications company that operates through GCI Holdings and Charter segments. On November 4, Liberty Broadband Corporation (NASDAQ:LBRDA) reported its Q3 results, announcing earnings per share of $2.15 and a revenue of $248 million, outperforming Wall Street estimates by $0.48 and $3.91 million, respectively. 

According to the 13F filings for the second quarter of 2022, the George Soros stock portfolio had 1.75 million shares of Liberty Broadband Corporation (NASDAQ:LBRDA), worth $202.35 million and representing 3.6% of the total holdings. 

On May 10, Deutsche Bank analyst Bryan Kraft maintained a Buy rating on Liberty Broadband Corporation (NASDAQ:LBRDA) but lowered the price target on the shares to $158 from $196 after the Q1 results.

Among the hedge funds tracked by Insider Monkey, 27 funds reported owning stakes worth $202.35 million in Liberty Broadband Corporation (NASDAQ:LBRDA), compared to 26 funds in the prior quarter. Boykin Curry’s Eagle Capital Management is the largest stakeholder of the company, with 8.30 million shares worth $960.2 million. 

Alphyn Capital made the following comment about Liberty Broadband Corporation (NASDAQ:LBRDA) in its Q3 2022 investor letter:

“In retrospect, I wish I had cut the position in Liberty Broadband Corporation (NASDAQ:LBRDA) more aggressively last quarter. Fears of fixed wireless and fiber competition have weighed heavily on Charter and Liberty’s share prices. Tom Rutledge’s unexpected early retirement from the CEO role has not helped matters.

I believe the sentiment is now overly pessimistic, and the valuation once again attractive. Revenue growth from broadband ads will likely stall as fixed wireless access programs take a bite out of cable subscribers over the next five years. 4 However, Charter has a fast-growing mobile phone business through an MVNO (mobile virtual network operator) agreement with Verizon. Given its cost-effective access to Verizon’s mobile telephony infrastructure, it provides a branded mobile phone service to retail customers at competitive rates. For example, Unlimited pricing starts at $29.99/month, including taxes and fees, vs. $35-55/month plus taxes and fees for Verizon’s plans.

Wireless generates approximately $725m in revenues for Charter per quarter, around 6% of the total, and is growing 40% per year. Should this continue, Wireless could return Charter to mid-single-digit revenue growth and “drive meaningful EBITDA for Charter,” as revenues scale over a low cost base. With approximately 25m non-Charter potential wireless customers within the area it serves, there is plenty of room for growth.”

2. Amazon.com, Inc. (NASDAQ:AMZN)

Number of Hedge Fund Holders: 252

Soros Fund Management’s Stake Value: $212,898,000

Amazon.com, Inc. (NASDAQ:AMZN) has been part of the George Soros stock portfolio since the last quarter of 2010, with a few breaks over the years. In Q2 2022, the hedge fund elevated its stake in Amazon.com, Inc. (NASDAQ:AMZN) by 2735%, holding more than 2 million shares worth approximately $213 million, representing 3.79% of the total 13F securities. 

On November 2, Tigress Financial analyst Ivan Feinseth reiterated a Buy recommendation on Amazon.com, Inc. (NASDAQ:AMZN) but lowered the firm’s price target on the shares to $192 from $232. The analyst said the new price target reflects a re-rating of valuation and growth rate adjustments. He sees further growth and share price gains and views the recent pullback as a “major” buying opportunity.

According to Insider Monkey’s data, 252 hedge funds held stakes worth $30 billion in Amazon.com, Inc. (NASDAQ:AMZN) at the end of June 2022, compared to 271 funds in the prior quarter worth $48 billion. Ken Fisher’s Fisher Asset Management featured as a significant position holder in the company, with 48.6 million shares valued at $5.16 billion.  

Alger Capital made the following comment about Amazon.com, Inc. (NASDAQ:AMZN) in its Q3 2022 investor letter:

“Amazon.com, Inc. (NASDAQ:AMZN) is a well-known online retailer and cloud computing leader. The company’s amazon web services business provides utility-scale cloud offerings that facilitate corporate America’s transition to digital systems. Shares outperformed during the quarter as investors were encouraged by strong second-quarter performance despite a challenging macroeconomic environment. Moreover, the company’s retail segment was resilient and avoided discounting inventory like some major retailers did. Revenues for the company’s cloud computing segment, amazon web services (AWS), grew faster than analysts’ estimates during the quarter due to continuing corporate demand for digitization. As a result, management provided better-than-expected forward guidance.”

1. Rivian Automotive, Inc. (NASDAQ:RIVN)

Number of Hedge Fund Holders: 35

Soros Fund Management’s Stake Value: $459,086,000

Rivian Automotive, Inc. (NASDAQ:RIVN) is a California-based company that designs, develops, manufactures, and sells electric vehicles and accessories. Securities filings for the second quarter of 2022 revealed that the George Soros stock portfolio held 17.8 million shares of Rivian Automotive, Inc. (NASDAQ:RIVN), worth $459 million and representing 8.17% of the total 13F securities. Rivian Automotive, Inc. (NASDAQ:RIVN) is the largest holding in the Soros portfolio. 

On November 2, Mizuho analyst Vijay Rakesh said Rivian Automotive, Inc. (NASDAQ:RIVN)’s vehicle recall is “relatively minor” and that its manufacturing lines have already been updated. He noted that the headlines are “worse than reality” and maintained a Buy rating on Rivian Automotive, Inc. (NASDAQ:RIVN) with a $65 price target.

According to Insider Monkey’s data, 35 hedge funds were bullish on Rivian Automotive, Inc. (NASDAQ:RIVN) at the end of June 2022, compared to 29 funds in the prior quarter. Philippe Laffont’s Coatue Management is the largest position holder in the company, with 18.8 million shares worth $486 million. 

Here is what Baron Fifth Avenue Growth Fund has to say about Rivian Automotive, Inc. (NASDAQ:RIVN) in its Q2 2022 investor letter:

“Rivian Automotive, Inc. designs, manufactures, and sells consumer and commercial electric vehicles. Shares of Rivian declined 48.2% in the second quarter as investors continued rotating out of long-duration assets and have become increasingly concerned about capital intensity and cash burn.

At the same time, Rivian continues to be impacted by supply chain issues which are causing delays in its production ramp. Rivian is addressing those challenges by diversifying its supply chain to alleviate shortages while also consolidating the number of variants in development to reduce cash burn (the company guided that current cash will be enough to support the company’s future platform launch ‘R2’ in 2025). Rivian recently reported stronger-than-expected second quarter production numbers while reiterating its annual guidance of producing 25,000 units.

As semiconductor shortages ease, we believe that the company will be able to rapidly ramp its production. We retain conviction in the shares given management’s vision, Rivian’s product positioning, the company’s relationship with Amazon.com, and its strong balance sheet. As of the end of the first quarter, Rivian had $17 billion of cash and cash equivalents, which will help it overcome the current challenges while taking advantage of the long-term opportunity as the market transitions to electric vehicles.”

You can also take a look at 12 Best Reddit Stocks To Buy and 10 Stocks That Are On Sale Now. 

Follow Insider Monkey on Twitter