Soros has achieved the best performance record in the world in the 26 years that he managed the Quantum Fund – a 32% average annual return. He invests on the principle that markets are chaotic, and cool logic rather than emotion is the best approach to making trade decisions and finding companies that are high value at low price.
Wabash National Corp. (WNC)
Wabash National Corporation is one of the leading manufacturers of semi trailers in North America with 21 percent of the market share. Wabash National Corp. has a market cap of $605.5 million; its shares were traded at around $8.84 with and P/S ratio of 0.9.
Soros re-initiated a position in Wabash National Corp. in the first quarter, purchasing 1.9 million shares at about $11.36 each. The stock price on Tuesday is 40% cheaper at $8.87.
Wabash lost money in 2009 and 2010, and has had one positive quarter in the last four. It has cash of about $60 million, and long-term liabilities and debt stand at $174 million. Gross margins were 4.4% in 2010, an increase from negative 6.8% in 2009. Net margins fell into negative territory in 2008 and were negative 2.4% in 2010.
Trucking is a part of the cyclical US transportation industry and economic downturns have in the past reduced new trailer sales, though freight tonnage in 2010 increased approximately 6% from 2009. Thirty-two percent of Wabash’s sales were from their top five largest customers.
North American Palladium Ltd. (PAL)
North American Palladium Ltd. is one of North America's largest producers of palladium. North American Palladium Ltd. has a market cap of $626.9 million; its shares were traded at around $3.86 with and P/S ratio of 5.8.
George Soros is the only guru with this stock. He bought 50,000 shares in fourth quarter 2010 and 1.95 million shares in first quarter 2011 at $6.86 per share. North American Palladium can now be had for $3.86 a share, 43.8% less.
Palladium is an extremely rare metal of the platinum group used in such products as catalytic converters, an integral part of the auto industry, as well as cell in phones, computers, dentistry, medicine and jewelry. The United States was the third largest producer of Palladium in 2010. Palladium prices have reached a 6-month high of $855 and low of $696 per ounce.
North American Palladium lost money the last three years, with its highest in 2010 at negative $119 million, though capital expenditures increased from $9.9 million in 2009 to $47.14 million in 2010. The company also recently completed a $21-million exploration program that resulted in the discovery of a new zone and acquired a new gold project in the Abitibi region.
Motorola Mobility Holdings (MMI)
Motorola Mobility Holdings operates as a provider of technologies products and services for handset and television set-top box units. Motorola Mobility Holdings has a market cap of $6.21 billion; its shares were traded at around $21.04 with and P/S ratio of 0.5.
George Soros initiated a position in Motorola Mobility Holdings in the first quarter 2011, likely receiving 370,772 shares at an average price of $29.32 as a former shareholder of Motorola. Motorola broke up into Motorola Solutions Inc. (MSI) and Motorola Mobility Holdings (MMI) in early 2011. The latter focuses on devices such as the best-selling Android smartphone, tablets and Bluetooth accessories. At $21.09, MMI is 28.4% cheaper than it was when George Soros acquired it.
Motorola’s first quarter operating cash flow was $107 million and represented its seventh consecutive quarter of positive cash generation. It has cash and cash equivalents of $3.116 billion. Net revenues from its mobile devises segment increased 30% to $2.1 billion from the year-ago quarter. Net revenues from its home segment also increased 8% from $904 million.
iSoftStone Holdings Ltd. (ISS)
iSoftStone Holdings Ltd. is an IT service provider operating an integrated service delivery platform for IT services and solutions in the Peoples' Republic of China. iSoftStone Holdings has a market cap of $777.5 million; its shares were traded around $14.84 with a P/S ratio of 3.9.
Soros first bought iSoftStone Holdings in the first quarter 2011, shortly after its IPO in December 2010. He bought 510,345 million shares at an average price of $19.28, and since then the price has declined 23% to $14.84, just above its IPO price of $13. Year to date the stock has fallen 20.2%.
iSoftStone generated $1.5 million in net cash flow in 2010. It also improved its grow margin to 37.9% in the fourth quarter 2010 to 35.1% in the fourth quarter 2009.
Micron Technology Inc. (MU)
Micron Technology Inc. has established itself as one of the worldwide providers of semiconductor memory solutions. Micron Technology Inc. has a market cap of $7.32 billion; its shares were traded at around $7.31 with a P/E ratio of 10.3 and P/S ratio of 0.9.
Soros re-initiated a stake in first quarter 2010 at an average price of $9.71 per share and has been acquiring small portions in subsequent quarters, except for one sale in the third quarter 2010. Most recently, he purchased 402,500 shares in the first quarter 2011 at an average price of $10.49. GuruFocus readers can buy the same stock 28% cheaper at $7.49 per share.
Micron Technology suffered a severe setback in the quarter ended June 2 – its profits dropped 92% from profit of $939 million on revenue of $2.26 billion, to $75 million earnings on revenue of $2.14 billion. The company attributed the drop to softened computer sales, which slowed their shipments of DRAM memory chips 7%. Its NAND flash memory chips, however, are used in MP3 players, digital cameras and tablet computers. Revenue from sales for NAND chips dipped 5%. Yet the company still managed to improve its consolidated gross margin from 19% in the quarter ended June 2, 2009, to 22% in the third quarter 2010.
George Soros' complete portfolio is available here.