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Soros Funds Sold Out Chinese Stocks BIDU, SINA, EDU; Bought more CTRP

April 12, 2011 | About:
Gordon Pape

gurufocus

332 followers
With the risk of high inflation and dollar devaluation, more investors are looking for investment ideas in the international market. We have since added an “International” tab in Gurus’ portfolio pages. With this feature we can easily check out the international stocks in Gurus’ portfolios. Here we look at the Chinese stocks that George Soros traded over the past months.

The list of all George Soros’ international stocks is here. He bought many new positions in countries such as Australia and Brazil. He was bullish on European countries, too. But he sold out of three major Chinese companies: Baidu Inc. (BIDU), New Oriental Education and Technology (EDU) and Sina Corp. (SINA). He did add one Chinese company, Ctrip.com International Ltd. (CTRP).

Sold Out: Baidu Inc. (BIDU)

Baidu Inc. runs Baidu.com. It is a Chinese-language Internet search provider and is based in Beijing, China. Baidu Inc. has a market cap of $37.36 billion; its shares were traded at around $145.68 with a P/E ratio of 97 and P/S ratio of 31.1. Baidu Inc. had an annual average earnings growth of 48.3% over the past five years.

George Soros traded in and out of Baidu a few times before, as shown in the holding history below. He sold out again in the fourth quarter of 2010. Baidu’s stock price has gained another 50% since.



Baidu stock jumped yesterday on the rumor that Facebook Inc. will sign an agreement with the company to set up a social-networking website in China.

The growth of Baidu is certainly eye-opening. The company is in very good financial shape. The tremendous growth of Chinese internet users is driving the revenue growth at Baidu. But does that justify a P/E ratio of around 100?

Sold Out: New Oriental Education and Technology (EDU)

New Oriental Education and Technology is the largest provider of private educational services in China based on the number of program offerings, total student enrollments and geographic presence. New Oriental Education and Technology Group Inc. has a market cap of $4.43 billion; its shares were traded at around $115.79 with a P/E ratio of 53.4 and P/S ratio of 11.5.

New Oriental Education and Technology’s stock price has more than quadrupled since its IPO in 2006. The company has grown its revenue 40% a year for the last five years. Soros bought into the position in the second quarter of 2010, and added more in the third quarter, but sold out in the fourth quarter.

Hedge fund manager Andreas Halvorsen bought 221,100 shares in the quarter that ended on 12/31/2010, which is 0.19% of the $12.06 billion portfolio of Viking Global Investors LP.

EDU is traded at P/E of 53, far better valued than Baidu. But it is probably still too expensive.

Sold Out: Sina Corp. (SINA)

SINA Corporation is a online media company and value-added information service provider for China and for global Chinese communities. Sina Corp. has a market cap of $7.11 billion; its shares were traded at around $116.27 with a P/E ratio of 73.1 and P/S ratio of 17.7. Sina Corp. had an annual average earnings growth of 11% over the past five years. The stock reached a record $119.35 at the end of last week.

Soros traded in and out of Sina over the past years, and he sold out all the positions in the fourth quarter of 2010.

Sina stock has been under pressure, as Facebook might be signing a deal with Baidu.

Added: Ctrip.com International Ltd. (CTRP)

Ctrip.com International Ltd. is a travel service provider of hotel accommodations, airline tickets and packaged-tours in China. Ctrip.com International Ltd. has a market cap of $6.69 billion; its shares were traded at around $45.25 with a P/E ratio of 43.9 and P/S ratio of 15.3. Ctrip.com International Ltd. had an annual average earnings growth of 64.2% over the past 10 years.

Soros initiated his position in CTRP in 2009; he then reduced his position in the first quarter of 2010. Since then, he has kept adding to the position as the prices go up. As og the last report for the fourth quarter of 2010, he was still in the buying mode.

China is set to overtake Japan as the No. 2 travel destination in two years, according to a March 31 report by The Boston Consulting Group. Ctrip was mentioned in the Boston Consulting Group’s ”Taking Off: Travel and Tourism in China and Beyond.” In the report, it said that Ctrip had between 25% and 35% of the internet travel market, and was considered a one of the brands Chinese travelers were the most loyal to.

Renowned hedge fund manager Steve Mandel bought 4,312,650 shares in the quarter that ended on 12/31/2010, which is 1.44% of the $12.14 billion portfolio of Lone Pine Capital.

This is just what George Soros has been doing with his Chinese stocks. George Soros bought more Australian and Brazilian stocks as well. To see other international stocks in his portfolio, go to Soros’ international stocks

About the author:

gurufocus
GuruFocus - Stock Picks and Market Insight of Gurus

Rating: 3.1/5 (13 votes)

Comments

bzliteyear
Bzliteyear - 3 years ago
George Soros doesn't manage money, and he doesn't buy/sell stocks. Yes, he still has many people managing his money and these funds may buy/sell the above stocks. However, it's very inaccurate, if not deceptive, for his article to say "George Soros bought this and sold that" - it's not true.

Please leave your comment:


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