(GuruFocus, September 2, 2009) Marketwatch.com features an article on hedge fund winners in terms of asset growth. Citing information released by a new hedge fund industry magezine AR (short for Absolute Return), George Soros is credit as a winner in the race, moving from No.6 to No.5 in terms of asset under management. Soros saw his asset under management grew 14% to $24 billion since the beginning of 2008. That is 41% highter than a year ago (at the end of 2007, I assume).
The article credited Soros as "one of the few investment managers to foresee the global financial crisis that erupted last year." According to the article, as markets collapsed, he stepped back into trading, helping the firm's flagship Quantum Endowment fund gain almost 10% in 2008. This year, the fund was up almost 19% through the end of July, AR reported.
It occured to me that the math does not add up here: if the fund is up 19% and it is the flagship fund, why the total asset only grew 14%? Two explanation come into my mind: one is that the flag ship Quantun Endowment fund is only part of a much larger fund family and the rest of the fund family had a return far less than 14%, dragging the return down; or investor actually withdrew money during the first seven months of the year causing the net asset under management drop. Talking about people of little faith!
Also mentioned in the article is Investment Guru John Paulson, who also bet correctly against mortgage-related securities in 2008. Paulson's fund increased 16.38% through the end of July, but asset under management dropped 6% to $27.2 billion since investors redeemed some of their money. Paulson is the third-largest hedge fund firm by assets, maintaining its position from the end of 2008, AR noted.
Another Investment Guru, Baupost Group, run by Seth Klarman, became the eighth-largest hedge fund firm, with assets of $19 billion, up 13% in the first half of 2009, AR said.
Read the entire artilce in marketwatch.com for the other hedge fund managers featured.
GuruFocus tracks the the dometic equity portion of the overall George Soros's portfolio, included are foreign stocks traded in the US. The other assets, those in derivatives, currencies, foreign stocks are not included in our scope. For that reason, we only inlcude $2.61 billion of the $24 billion total assets. It is hard to mimic his investment movements given the fact we do not see about 85% of his total asset holdings. The $2.61 billion is allocated among 211 stocks, making the task incredible.
Here are the top five purchases for the period of April to June, 2009:
No. 1: AutoZone Inc. (AZO, Financial) - Total: 523,200 Shares
Autozone is the nation's leading specialty retailer of automotive parts and accessories primarily focusing on do-it-yourself customers. Autozone Inc. has a market cap of $7.79 billion; its shares were traded at around $144.94 with a P/E ratio of 12.9 and P/S ratio of 1.2. Autozone Inc. had an annual average earning growth of 23.1% over the past 10 years. GuruFocus rated Autozone Inc. the business predictability rank of 3-star.
Soros had a small position of 59,500 at 1Q08 and increased to 523,200 at the end of 2Q09.
No. 2: Plains Exploration & Production Company (PXP, Financial) - Total: 6,526,400 Shares
PLAINS EXPLORATION & PRODUCTION COMPANY is an independent oil and gas company primarily engaged in the activities of acquiring developing exploring and producing oil and gas properties primarily in the United States. Plains Exploration & Production Company has a market cap of $3.21 billion; its shares were traded at around $26.33 with a P/E ratio of 6.1 and P/S ratio of 1.3. Plains Exploration & Production Company had an annual average earning growth of 25.5% over the past 5 years.
Soros increased from 3.6 million shares to 6.5 million shares during 2Q09.
No. 3: Petroleo Brasileiro S.A.Petrobras (PBR-A) - Total: 5,884,700 Shares
Petrolo Brasilerio is a mixed capital corporation that operates in the exploration production refining commercialization transportation import and export of oil and oil products in Brazil. Petroleo Brasileiro S.a.petrobras has a market cap of $145.34 billion; its shares were traded at around $33.13 with and P/S ratio of 30.1. The dividend yield of Petroleo Brasileiro S.a.petrobras stocks is 1.1%. Petroleo Brasileiro S.a.petrobras had an annual average earning growth of 36.6% over the past 10 years.
Soros bought 5.88 million shares of Class A shares of Petroleo Brazileiro in 1Q09
No. 4: Covanta Holding Corp. (CVA, Financial) - Total: 4,672,909 Shares
Danielson Holding Corporation is a holding company. Their largest subsidiary is National American Insurance Company of California (NAICC). NAICC and its subsidiaries write workers' compensation non-standard private passenger and commercial automobile insurance in the western United States primarily California. Covanta Holding Corp. has a market cap of $2.71 billion; its shares were traded at around $17.5 with a P/E ratio of 23 and P/S ratio of 1.7.
Soros started to buy CVA (363K shares) in 1Q09. And in 2Q09 he increased to 4.67 million shares.
No. 5: Hess Corp. (HES, Financial) - Total: 5,123,198 Shares
Hess Corporation is a global integrated energy company engaged in the exploration for and the production purchase transportation and sale of crude oil and natural gas as well as the production and sale of refined petroleum products electricity. Hess Corp. has a market cap of $16.22 billion; its shares were traded at around $49.6 with a P/E ratio of 21.1 and P/S ratio of 0.4. The dividend yield of Hess Corp. stocks is 0.8%. Hess Corp. had an annual average earning growth of 19.2% over the past 10 years. GuruFocus rated Hess Corp. the business predictability rank of 3.5-star.
Soros had 3.66 million shares of HES at the end of 1Q09 and increased to 5.12 million shares at the end of 2Q09.
Conclusion
In 2Q09, three of five Soros's top buys are in Oil and Gas sector. There is no doubt where the Investment Guru wants to hide his money in face of the upcoming inflation.
GuruFocus provides real time information and insights of Investment Gurus such as Warren Buffett and George Soros for Premium Members. If you are not a premium member, click here to sign up or upgrade. 7-Day Free Trial is available.
The article credited Soros as "one of the few investment managers to foresee the global financial crisis that erupted last year." According to the article, as markets collapsed, he stepped back into trading, helping the firm's flagship Quantum Endowment fund gain almost 10% in 2008. This year, the fund was up almost 19% through the end of July, AR reported.
It occured to me that the math does not add up here: if the fund is up 19% and it is the flagship fund, why the total asset only grew 14%? Two explanation come into my mind: one is that the flag ship Quantun Endowment fund is only part of a much larger fund family and the rest of the fund family had a return far less than 14%, dragging the return down; or investor actually withdrew money during the first seven months of the year causing the net asset under management drop. Talking about people of little faith!
Also mentioned in the article is Investment Guru John Paulson, who also bet correctly against mortgage-related securities in 2008. Paulson's fund increased 16.38% through the end of July, but asset under management dropped 6% to $27.2 billion since investors redeemed some of their money. Paulson is the third-largest hedge fund firm by assets, maintaining its position from the end of 2008, AR noted.
Another Investment Guru, Baupost Group, run by Seth Klarman, became the eighth-largest hedge fund firm, with assets of $19 billion, up 13% in the first half of 2009, AR said.
Read the entire artilce in marketwatch.com for the other hedge fund managers featured.
GuruFocus tracks the the dometic equity portion of the overall George Soros's portfolio, included are foreign stocks traded in the US. The other assets, those in derivatives, currencies, foreign stocks are not included in our scope. For that reason, we only inlcude $2.61 billion of the $24 billion total assets. It is hard to mimic his investment movements given the fact we do not see about 85% of his total asset holdings. The $2.61 billion is allocated among 211 stocks, making the task incredible.
Here are the top five purchases for the period of April to June, 2009:
No. 1: AutoZone Inc. (AZO, Financial) - Total: 523,200 Shares
Autozone is the nation's leading specialty retailer of automotive parts and accessories primarily focusing on do-it-yourself customers. Autozone Inc. has a market cap of $7.79 billion; its shares were traded at around $144.94 with a P/E ratio of 12.9 and P/S ratio of 1.2. Autozone Inc. had an annual average earning growth of 23.1% over the past 10 years. GuruFocus rated Autozone Inc. the business predictability rank of 3-star.
Soros had a small position of 59,500 at 1Q08 and increased to 523,200 at the end of 2Q09.
No. 2: Plains Exploration & Production Company (PXP, Financial) - Total: 6,526,400 Shares
PLAINS EXPLORATION & PRODUCTION COMPANY is an independent oil and gas company primarily engaged in the activities of acquiring developing exploring and producing oil and gas properties primarily in the United States. Plains Exploration & Production Company has a market cap of $3.21 billion; its shares were traded at around $26.33 with a P/E ratio of 6.1 and P/S ratio of 1.3. Plains Exploration & Production Company had an annual average earning growth of 25.5% over the past 5 years.
Soros increased from 3.6 million shares to 6.5 million shares during 2Q09.
No. 3: Petroleo Brasileiro S.A.Petrobras (PBR-A) - Total: 5,884,700 Shares
Petrolo Brasilerio is a mixed capital corporation that operates in the exploration production refining commercialization transportation import and export of oil and oil products in Brazil. Petroleo Brasileiro S.a.petrobras has a market cap of $145.34 billion; its shares were traded at around $33.13 with and P/S ratio of 30.1. The dividend yield of Petroleo Brasileiro S.a.petrobras stocks is 1.1%. Petroleo Brasileiro S.a.petrobras had an annual average earning growth of 36.6% over the past 10 years.
Soros bought 5.88 million shares of Class A shares of Petroleo Brazileiro in 1Q09
No. 4: Covanta Holding Corp. (CVA, Financial) - Total: 4,672,909 Shares
Danielson Holding Corporation is a holding company. Their largest subsidiary is National American Insurance Company of California (NAICC). NAICC and its subsidiaries write workers' compensation non-standard private passenger and commercial automobile insurance in the western United States primarily California. Covanta Holding Corp. has a market cap of $2.71 billion; its shares were traded at around $17.5 with a P/E ratio of 23 and P/S ratio of 1.7.
Soros started to buy CVA (363K shares) in 1Q09. And in 2Q09 he increased to 4.67 million shares.
No. 5: Hess Corp. (HES, Financial) - Total: 5,123,198 Shares
Hess Corporation is a global integrated energy company engaged in the exploration for and the production purchase transportation and sale of crude oil and natural gas as well as the production and sale of refined petroleum products electricity. Hess Corp. has a market cap of $16.22 billion; its shares were traded at around $49.6 with a P/E ratio of 21.1 and P/S ratio of 0.4. The dividend yield of Hess Corp. stocks is 0.8%. Hess Corp. had an annual average earning growth of 19.2% over the past 10 years. GuruFocus rated Hess Corp. the business predictability rank of 3.5-star.
Soros had 3.66 million shares of HES at the end of 1Q09 and increased to 5.12 million shares at the end of 2Q09.
Conclusion
In 2Q09, three of five Soros's top buys are in Oil and Gas sector. There is no doubt where the Investment Guru wants to hide his money in face of the upcoming inflation.
GuruFocus provides real time information and insights of Investment Gurus such as Warren Buffett and George Soros for Premium Members. If you are not a premium member, click here to sign up or upgrade. 7-Day Free Trial is available.
