George Soros (Trades, Portfolio) founded Soros Fund Management in 1969, which was formerly structured as a hedge fund but today runs as a privately owned family office.
Soros arguably set the standard for hedge fund managers — during the fund’s 26-year history, Soros had a cumulative 32% annual return. Just $1,000 invested in the Quantum Fund in 1969 would have grown to $4 million in 2000.
Soros' background is no less interesting. He was born in Budapest and survived the Nazi occupation of Hungary. According to his website, he fled Communist-led Hungary in 1947 and went to England, where he graduated from the London School of Economics in 1952.
A noted philanthropist, Soros established the Open Society Institute in 1993, and to date has donated about $8 billion to support human rights, freedom of expression, and public health and education.
During the fourth quarter, Soros purchased 42 new holdings with a quarter-over-quarter turnover of 20%. The following are the top five new buys.
Entropic Communications
On Feb. 5, Soros purchased 5,666,666 shares of Entropic Communications (ENTR, Financial) for $3.03 per share. Soros now owns 6.29% of the company.
Entropic provides semiconductor solutions for the home, such as transforming how HDTV broadcast and streaming video is delivered and distributed throughout the home.
The company has been operating at a loss since FY 2013, and based on preliminary data, diluted EPS is estimated to be $-1.09 for FY 2014.
The stock has been down 28% over the past year and currently trades at $2.93.
Lattice Semiconductor
During the quarter, Soros purchased 1,793,913 shares of Lattice Semiconductor (LSCC, Financial) for an average price of $6.57 per share. He then added 6,072,753 more shares on Feb. 4 at a price of $6.54 per share. He now owns 6.65% of shares outstanding.
Lattice develops programmable logic products and related software. Programmable logic products are semiconductor components that can be configured by end customers as specific logic circuits, enabling shorter design cycle times and reduced development costs.
The stock has been down 21% over the past year and currently trades at $6.12. When compared to the Peter Lynch earnings line, the stock appears to be fairly valued.
After struggling in 2012, the company improved its financials in FY 2013 and is projected to have better numbers for the end of FY 2014. Based on preliminary data, diluted EPS for the year will be $0.40.
The current P/E ratio is 18.2, while the P/S ratio is 2.
LyondellBasell Industries
Soros purchased 2,833,286 shares of LyondellBasell (LYB, Financial), which traded at an average price of $86.68 during the quarter. The company has a portfolio weighting of 2.5%.
LyondellBasell is a chemical company whose products include methanol, ethanol, and polypropylene compounds.
The stock currently trades at $89.94 and is undervalued according to the Peter Lynch chart.
The operating margin has been steadily expanding, recording at 12.58% in FY 2014 based on preliminary data for the year.
The current P/E ratio is 10.6, while the P/S ratio is 1.
Endo International
Soros also purchased 1,748,729 shares of Endo International (ENDP, Financial) for an average price of $68.62 during the quarter. Endo now accounts for 1.4% of the portfolio.
Endo is a healthcare company that manufactures and sells pharmaceutical and generic products, as well as medical devices. Its areas of focus include women’s health, urology, and dermatology.
The stock has been up 13% over the past year and currently trades at $85.37. The company does not currently have a P/E ratio due to earnings loss, and has a P/S ratio of 4.4.
Endo has been operating at a loss since FY 2012. Diluted EPS for FY 2013 was $-6.05.
Lending Club
Soros bought 4,500,000 shares of Lending Club (LC, Financial), which traded for an average price of $25.25. The holding has a 1.2% portfolio weighting.
Lending Club is an online marketplace that connects borrowers and investors. The service operates online with no physical branches, and uses technology to lower cost to borrowers in the form of lower interest rates, and investors in the form of attractive returns.
Lending Club’s IPO debuted in December, and now has a market valuation of $9 billion.
Other gurus who bought Lending Club during the fourth quarter include Leon Cooperman (Trades, Portfolio), Chris Davis (Trades, Portfolio), and Chase Coleman (Trades, Portfolio).
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