Over the past days hedge funds have been filing their form 13-F, which is a quarterly report of equity holdings by filed institutional investment managers with at least $100 million in equity assets under management, as required by the United States Securities and Exchange Commission (SEC). In this article, let´s concentrate in one particular hedge fund and try to see the principal holdings in its portfolio. I will look into Soros Fund Management LLC managed by George Soros (Trades, Portfolio), the man who is recognized for having the best performance record of any investment fund in the world over its 26-year history.
Recently the fund reported its equity portfolio, as at the end of last year. The total value of the portfolio amounted to $9.2 billion, up from $7.6 billion disclosed at the end of the previous quarter. Consequently, the fund's total return was 17.3% in the last quarter. The filing revealed that at the end of last year, the fund added 76 new positions to its equity portfolio, and sold out the same number of companies. The top ten portfolio holdings as of the end of the quarter represented 24.89%. The largest changes from previous 13-F´s fillings are in the financial sector (7.2%) followed by energy and telecom stocks (around 2.1% each).
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- JPM 15-Year Financial Data
- The intrinsic value of JPM
- Peter Lynch Chart of JPM
In this article, we have selected three companies, in which the fund holds the largest stakes, in terms of market value.
The first on the list is JPMorgan Chase & Co. (NYSE:JPM) in which Soros disclosed a $166.15 million stake with over 2.84 million shares. In the recent past, a pact of $13 billion settlement with the U.S. government, resolved mortgage-related issues. Also, is a bank with a good business diversification (Chase retail branch network, credit cards, and emerging markets), which is the key for earnings growth. Finally, JPMorgan´s credit quality continues to normalize. The company reported earnings per share decreased by 0.5% compared to the same quarter one year prior, but beat the Zacks Consensus Estimate by 4.0%. The company returns cash to investors. It raised its quarterly dividend by 26.7% to $0.38 per share. The current dividend yield is 2.5%, which is considered quite enough to protect the purchasing power.
Other hedge fund gurus have also been active in the company. Chuck Royce (Trades, Portfolio), Sarah Ketterer (Trades, Portfolio), Paul Tudor Jones (Trades, Portfolio) and Caxton Associates (Trades, Portfolio) have bought in it in Q4 2013.
Microsoft Corporation (NASDAQ:MSFT) comes in next, the fund owning over 2.56 million shares, worth $95.8 million. The company reported revenues rose by 14.3% in the most recent quarter compared to the same quarter a year ago. It has a solid financial position with reasonable debt levels and stock price surged by 35% over the past year.
Finally, the top number three is Intel Corp (NASDAQ:INTC), in which Soros disclosed ownership of over 2.04 million shares, worth $52.86 million. The company´s Q4 earnings missed the Zacks Consensus Estimate. The company has good profit margins and strong operating cash flow.
In the next chart we can appreciate the stock’s price movement. All of them have an upward trend for the 5-year period.
The three stocks are certainly attractive for fundamental investors and make it a worthy investment for Soros Fund Management’s portfolio. In future articles we are going to calculate the intrinsic value of these stocks to determine if they are a good buy in terms of valuation.
Disclosure: Victor Selva holds no position in any stocks mentioned.