In this article, we discuss the top 10 stock picks of George Soros. If you want to skip our detailed analysis of these stocks, go directly to the Top 5 Stock Picks of George Soros.
George Soros, the billionaire founder of Soros Fund Management, is famous on Wall Street for making hugely successful bets on currency fluctuations. As such, the news that his hedge fund owned some Bitcoin, the most popular cryptocurrency, gave a small boost to the price of the digital coin earlier this year. Dawn Fitzpatrick, who oversees the Soros Fund, told news platform CNBC in early October that the family office of the billionaire owned “some coins, but not a lot”. Fitzpatrick went on to reveal that the coin was no longer seen as just an inflation hedge.
George Soros’s Thoughts on China
Soros has also invited controversy in recent months after broadly criticizing the investment strategy of BlackRock, one of the largest investment firms in the world, for “pouring billions of dollars into China”. In an opinion piece for The Wall Street Journal, Soros termed the decision a “tragic mistake” and said that the bet on China would lose money for clients and also threaten the national security interests of the United States. The billionaire said that the fund had a “far from real” conception about state-owned and private enterprises in the Asian country.
Chinese stocks have slumped in recent months following the collapse of property giant Evergrande and a Beijing-sponsored crackdown against dual listed companies. Even without betting big in Chinese firms, Soros has managed to garner handsome returns on his investments. Some of the top stocks in the portfolio of Soros Fund Management at the end of the third quarter of 2021 included Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG), and IHS Markit Ltd. (NYSE:INFO), among others discussed in detail below.
Our Methodology
These were picked from the investment portfolio of Soros Fund Management at the end of the third quarter of 2021.
In order to provide readers with some context for their investment choices, the business fundamentals and analyst ratings for the stocks are also mentioned.
The hedge fund sentiment around each stock was calculated using the data of 867 hedge funds tracked by Insider Monkey.
Top Stock Picks of George Soros
10. Proterra Inc. (NASDAQ:PTRA)
Number of Hedge Fund Holders:
Proterra Inc. (NASDAQ:PTRA) is an automotive and energy storage firm. The hedge fund of George Soros entered the fourth quarter of 2021 with more than 7.7 million shares of the company in the portfolio worth more than $78 million.
Barclays analyst Brian Johnson recently raised the price target on Proterra Inc. (NASDAQ:PTRA) stock to $11 from $10 and kept an Equal Weight rating, noting that the firm appeared on track to meet fourth quarter revenue targets.
At the end of the third quarter of 2021, 20 hedge funds in the database of Insider Monkey held stakes worth $124 million in Proterra Inc. (NASDAQ:PTRA), compared to 23 the preceding quarter worth $338 million.
Just like Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG), and IHS Markit Ltd. (NYSE:INFO), Proterra Inc. (NASDAQ:PTRA) is one of the stocks attracting the attention of elite investors.
9. Marqeta, Inc. (NASDAQ:MQ)
Number of Hedge Fund Holders: 20
Marqeta, Inc. (NASDAQ:MQ) owns and runs a cloud-based application programming interface platform. Soros Fund Management, as of the end of September, had over 4 million shares of the company worth $88 million in the portfolio.
Marqeta, Inc. (NASDAQ:MQ) recently announced that it had expanded a partnership with Klarna, a global retail bank, into 13 new markets in Europe. Marqeta has a market cap of more than $9 billion.
Among the hedge funds being tracked by Insider Monkey, Connecticut-based investment firm Lone Pine Capital is a leading shareholder in Marqeta, Inc. (NASDAQ:MQ) with 2.6 million shares worth more than $57 million.
In its Q2 2021 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Marqeta, Inc. (NASDAQ:MQ) was one of them. Here is what the fund said:
“We participated in the IPO of Marqeta, Inc., a modern card-issuing platform that enables companies to run their own payment card programs. Marqeta is built on modern technology and can be accessed with open APIs that are easy to use and developer-friendly, resulting in most of its clients coming from word-of-mouth referrals instead of outbound sales. The modern technology stack allows for the programmability of cards, enabling companies to authorize transactions in real time and control how the cards are used. This programmable nature means that cards can be used in a range of use cases for which traditional cards are not suitable. Examples include cards with spending controls for different employees and purchase categories as well as cards for food delivery companies that restrict spending only to authorized purchases to reduce fraud. While there are other card issuers, none can provide the level of functionality at large scale that Marqeta can. Marqeta generates revenue from the interchange fees earned on transactions that are processed on its cards. It shares a portion of this with its customers, meaning that card solutions become a revenue stream rather than a cost center. Many of the company’s clients are fast growing, and Marqeta continues to innovate the features on its platform, which in turn give its clients more tools with which to develop new card payment products and experiences. Given a largely fixed cost structure, Marqeta earns high incremental margins on each dollar spent on its cards. Led by founder-CEO Jason Gardner, we believe that Marqeta is a high-quality, differentiated business in the FinTech space with a long runway for growth.”
8. Aramark (NYSE:ARMK)
Number of Hedge Fund Holders: 29
Aramark (NYSE:ARMK) provides food, facilities, and uniform services to a variety of industries. In the filings for the third quarter, Soros’s fund detailed that it owned 3 million shares of the company worth $101 million, representing 1.86% of the portfolio.
Stifel analyst Shlomo Rosenbaum has a Buy rating on Aramark (NYSE:ARMK) stock with a price target of $48. In a recent investor note, the investor backed the firm to improve margins and increase free cash flow in the coming months.
At the end of the third quarter of 2021, 29 hedge funds in the database of Insider Monkey held stakes worth $1.14 billion in Aramark (NYSE:ARMK), compared to 36 the preceding quarter worth $1.12 billion.
7. Activision Blizzard, Inc. (NASDAQ:ATVI)
Number of Hedge Fund Holders: 80
Activision Blizzard, Inc. (NASDAQ:ATVI) develops and publishes interactive entertainment content. Latest filings show that Soros Fund Management is long on more than 1.4 million shares in the firm worth $108 million, representing 2% of the portfolio.
Activision Blizzard, Inc. (NASDAQ:ATVI) stock has benefited from a six-month long rally in video games sales that ended in November. As a new variant of COVID-19 rises, video game sales are expected to go up again.
At the end of the third quarter of 2021, 80 hedge funds in the database of Insider Monkey held stakes worth $4.2 billion in Activision Blizzard, Inc. (NASDAQ:ATVI), compared to 78 in the preceding quarter worth $3.6 billion.
In its Q1 2021 investor letter, Cooper Investors, an asset management firm, highlighted a few stocks and Activision Blizzard, Inc. (NASDAQ:ATVI) was one of them. Here is what the fund said:
“The portfolio established a position in video game publisher Activision Blizzard. As a watchlist company we have followed Activision for several years. As a reminder the role of the watchlist is to allow us to focus on a select group of companies where we seek to observe important signals around either value latency, industry trends or management behaviour that portend attractive investment propositions.
Technology can often play a disruptive role in content, however video games are a clear beneficiary of technology, both in terms of more immersive and realistic gaming experiences as well as the monetisation opportunities this creates.
In order to benefit from these trends, video game publishers must be owners of unique IP. Activision Blizzard fits this bill perfectly boasting a portfolio which includes franchises such as Call of Duty, World of Warcraft and Diablo just to name a few.
The business is run by CEO Bobby Kotick, who together with Chairman Brian Kelly purchased the foundation assets for the company for US$400k in the early 1990s. Today Activision has a market capitalisation of over US$70bn. Over the last few years Bobby and his management team have refocused resources onto their best IP, with the goal of capitalising on the aforementioned industry tailwinds.
We saw the benefits of this in 2020 with the release of Call of Duty Mobile and Free-to-Play versions (with in game micro transactions) complimenting the traditional core console game. Engagement increased materially and due to the very favourable economics of content publishing, Operating Income more than doubled for the Call of Duty Franchise. Even adjusting for the impact of lockdowns, this is a phenomenal outcome.
Activision has 3-4 key pieces of IP with which they plan to repeat this playbook over the next couple of years. If they can replicate the success of Call of Duty, even in part, we see material upside to the free cash flow power of the business. Further, revenue sources are broadening which will move the profile away from a traditional lumpy annual release cycle of the old video game model towards one of a more recurring nature. This will transition Activision from a publishing to a services business, likely attracting a higher multiple than the current mid-low 20x FCF which is broadly in line with the market. To summarise, we see significant value latency and a pathway to double digit returns over the medium term.”
6. FIGS, Inc. (NYSE:FIGS)
Number of Hedge Fund Holders: 21
FIGS, Inc. (NYSE:FIGS) operates as a healthcare apparel and lifestyle company. Soros’s fund holds a stake in the firm worth $116 million, consisting of over 3.1 million shares.
On November 2, investment advisory Piper Sandler maintained an Overweight rating on FIGS, Inc. (NYSE:FIGS) stock with a price target of $45, noting that the firm was “well poised” to exceed market estimates for sales in the coming months.
At the end of the third quarter of 2021, 21 hedge funds in the database of Insider Monkey held stakes worth $821 million in FIGS, Inc. (NYSE:FIGS), up from 12 in the previous quarter worth $1.1 billion.
Along with Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG), and IHS Markit Ltd. (NYSE:INFO), FIGS, Inc. (NYSE:FIGS) is one of the stocks on the radar of hedge funds.
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Disclosure. None. Top 10 Stock Picks of George Soros is originally published on Insider Monkey.
