George Soros (Trades, Portfolio), manager of Soros Fund Management, disclosed Feb. 14 that he nearly went all-in on Caesars Entertainment Corp. (CZR, Financial) during fourth-quarter 2017. The hedge fund guru also started 89 new positions: The top three buys based on portfolio impact are Overstock.com Inc. (OSTK, Financial), Kennedy-Wilson Holdings Inc. (KW, Financial) and Alerian MLP (AMLP, Financial).
Caesars
Soros expanded his Caesars position 1066.90%, adding 31,541,978 shares for an average price of $12.68. With this transaction, the guru stretched his portfolio 11.06%.
Caesars operates 12 casinos in the U.S., including eight on the Las Vegas Strip. The company has poor financial strength, highlighted by weak interest coverage and Altman Z-scores.
Overstock.com
As discussed in a previous article, Soros invested in 2,472,188 shares of Overstock.com for $40.10 on Nov. 8. As the company’s stock currently trades for $67.70, Soros gained approximately 41% on Overstock.com based on GuruFocus estimates.
Although Overstock.com’s financial strength ranks 6 out of 10, the company has a weak Piotroski F-score of 3 and operating margins that underperform 82% of global competitors. Declining returns on assets, lower current ratios and asset turnover primarily contributed to Overstock.com’s weak Piotroski F-score.
Guru’s other top three buys
Soros also invested in 6,159,366 shares of Kennedy-Wilson and 8,021,000 shares of Alerian MLP. Kennedy-Wilson’s share price averaged $18.83 during the quarter while Alerian MLP’s averaged $10.69.
Kennedy-Wilson owns, operates and invests in real estate through its own investment management platform. Although the company has a strong profitability rank of 7, Kennedy-Wilson’s financial strength ranks a low 4 out of 10, driven primarily by week Altman Z-scores, high debt-to-equity and debt-to-EBITDA ratios.
According to the Alerian website, the Alerian MLP Index tracks the performance of master limited partnerships (MLPs) in the energy sector.
Disclosure: I do not have positions in the stocks mentioned.
