The top five stocks that he keeps selling are: Interoil (IOC), Emdeon (EM), Apple Inc. (AAPL), Macys Inc. (M) and Teradata (TDC).
No. 1: Interoil (IOC), Weightings: 3.2664% - 3,969,622 Shares
George Soros owns 3,969,622 shares of IOC, valued as $232 million as of Jun. 30, 2011, which accounts for 3.2664% of his equity portfolio. George Soros reduced his positions in the March 31, 2011 quarter by 8.72%, again in the June 30, 2011 quarter by 1.92%.
Interoil Corp is a vertically integrated energy company whose primary focus is Papua New Guinea and the surrounding region. Interoil has a market cap of $2.51 billion; its shares were traded at around $58.63 with a P/E ratio of 293.15 and P/S ratio of 3.11.
Interoil Corp. has one of the largest acreage portfolios held by a single company, covering about 3.9 million acres. It has two areas it is focused on developing, dubbed Elk and Antelope resources, which in 2010 were judged ready for a large-scale natural gas project. Otherwise, Interoil is continuing to explore their large tracts of land to identify additional resources.
Interoil is also at the forefront of adopting mid-sized modular LNG (liquefied natural gas) technology, which just came out in 2008 in Western Australia. A land-based modular LNG start-up plant is in the works.
Further, Interoil is the only refinery in Papua New Guinea, and the company derives its revenues from the sale of refined petroleum products. The state has mandated that all domestic distributors use only Interoil’s refinery until 2035. It sells fuel, lubricants and oils through retail service stations and wholesale facilities as well.
Interoil shored up its cash holdings in 2010 mainly through a public offering of 2,800,000 common shares and $70 million in convertible notes from which it made $266 million. The proceeds will go toward developing its Elk Antelope project, CS project and LNG project. The company had cash, cash equivalents and cash restricted of $280.9 million at Dec. 31, 2010.
Total 2010 revenues were up to $807 million compared with $693.1 million from 2009, mainly due to higher crude prices and increases in sales volumes (7.2 million barrels for fiscal 2010, 6.5 million barrels for fiscal 2009).
Interoil lost $149 million in 2010, down from $59.07 million in 2009. Gross margins remained flat year over year, and net margins fell to negative 5.6% from .9%. In the period ending March 31, 2011, the company’s long-term liabilities and debt increased to $336 million from $277 million the prior quarter.
Soros first bought Interoil shares in the second quarter of 2009. He acquired 1.86 million at an average price of $32.75. When the stock price increased to $73.45 by the first quarter 2011, he sold 386,700 shares of his stake, which had grown to 4,047,322 shares at that point. He sold another 77,700 in the second quarter of 2011 when the price fell to $60.40.
No. 2: Emdeon (EM), Weightings: 1.2757% - 6,913,718 Shares
George Soros owns 6,913,718 shares of EM, valued as $91 million as of June 30, 2011, which accounts for 1.2757% of his equity portfolio. George Soros reduced his positions in the March 31, 2011 quarter by 8.16%, again in the Jun. 30, 2011 quarter by 3.33%.
Emdeon is a provider of revenue and payment cycle management solutions, connecting payers, providers and patients in the U.S. Emdeon has a market cap of $1.7 billion; its shares were traded at around $18.68 with a P/E ratio of 19.26 and P/S ratio of 1.7.
Emdeon announced on August 4 that it will be acquired by Blackstone Capital Partners VI L.P. for approximately $3 billion and become a private company. Holders of Emdeon common stock will receive $19 per share in cash. The stock is up about 30% since July 26.
No. 3: Apple Inc. (AAPL), Weightings: 0.3342% - 70,795 Shares George Soros owns 70,795 shares of AAPL, valued as $24 million as of Jun. 30, 2011, which accounts for 0.3342% of his equity portfolio. George Soros reduced his positions in the March 31, 2011 quarter by 24.41%, again in the June 30, 2011 quarter by 69.28%.
Apple Computer Inc. designs, manufactures and markets personal computers and related personal computing and communicating solutions for sale primarily to education, creative, consumer and business customers. Apple Inc. has a market cap of $354.72 billion; its shares were traded at around $383.58 with a P/E ratio of 15.19 and P/S ratio of 5.44. Apple Inc. had an annual average earnings growth of 59.8% over the past 5 years.
In fiscal 2010, Apple reported higher free cash flows than ever, $16.6 billion, after four straight years of growth. Apple has zero long-term debt, liabilities of $27.4 billion, and cash and cash equivalents of about $26 billion. Return on equity and return on assets have also never been higher, at 29% and 18.6% respectively.
Apple faces some uncertainty in its future with its inimitable CEO, Steve Jobs, resigning for health reasons. The new CEO, Tim Cook, has very large and genius shoes to fill and investors are wondering whether he can keep launching the must-have products Apple is famous for. Rumors of an Apple TV, however, are circulating.
No. 4: Macys Inc. (M), Weightings: 0.2481% - 603,300 Shares
George Soros owns 603,300 shares of M, valued as $18 million as of Jun. 30, 2011, which accounts for 0.2481% of his equity portfolio. George Soros reduced his positions in the Mar. 31, 2011 quarter by 48.44%, again in the Jun. 30, 2011 quarter by 16.79%.
In mid-to-late 2009, Soros began buying into U.S. retail stocks, including Home Depot (HD), Target (TGT), Kohl’s, JC Penney (JCP) Walmart (WMT). He bought 1,447,943 shares of Macy’s in the third quarter of 2009 at an average price of $14.64 and 1,794,543 shares at an average price of $17.68 in the fourth quarter of 2009. Soros picked up these stocks after predicting in April 2009 that the U.S. economy would not recover in the third and fourth quarters of that year. Rather, he saw a global recovery beginning in 2010, according to Reuters.
When Soros initiated his position in Macy's, it had a loss per share of 8 cents, and a loss of $11.42 for the year. Earnings per share recovered to 83 cents in 2010 and $2 in fiscal 2011. Cash flows have not grown significantly for the last four years – $2.2 billion in fiscal 2011, $1.5 in 2010, and $1.2 billion in 2009. Macy’s stock price, however, has ascended 36% over the last year.
Retail sales recovery has been declining in the last three quarters. Retail sales grew 3.2% in the fourth quarter of 2010, 2.6% in the first quarter of 2011, and 1.2% in the most recent second quarter, according to data from the U.S. Census Burea. George Soros sold over half of his stake of 1,406,100 shares in the first half of the year.
No. 5: Teradata (TDC), Weightings: 0.1736% - 205,000 Shares
George Soros owns 205,000 shares of TDC, valued as $12 million as of June 30, 2011, which accounts for 0.1736% of his equity portfolio. George Soros reduced his positions in the March 31, 2011 quarter by 51%, again in the June 30, 2011 quarter by 33.78%.
Teradata began as a spin-off of NCR Corporation (NCR), a leading global technology company helping businesses build stronger relationships with their customers. Soros first bought the stock in the third quarter of 2008. In the quarter ended September 2008, Teradata reported revenue of $439 million, flat year over year. The company’s free cash flow had increased to $79 million from $71 million in the same period of 2007. It had no short or long-term debt and repurchased $65 million worth of shares. For 2008, it expected revenue growth of 1 to 4%.
In early 2011, Teradata acquired Aprimo Inc., a global leader of integrated marketing software solutions that enable customers to improve marketing performance with data-driven insights.
Each year since it has been an independent company EBITDA has grown. Teradata’s stock price has risen almost 98% over the last five years, and Soros has made a significant profit from his small holdings. He first bought when the stock was in the low $20s and teens. He has made many trades since then, and most recently sold 322,178 shares in the first quarter of 2011 at $47.07, and 104,578 shares in the second quarter of 2011 at an average price of $54.11. He now owns 205,000 shares. Teradata must compete with several major competitors, including IBM (IBM), Microsoft (MSFT) and Oracle (ORCL).
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