This week, Soros Fund Management LLC released its 13F portfolio updates for the fourth quarter of 2021, which ended on Dec. 31.
Founded by George Soros (Trades, Portfolio) in 1969, Soros Fund Management is the primary advisor for the Quantum Group of Funds. After helping define the modern hedge fund, the firm converted to a family office in 2011, becoming closed to outside investors and avoiding new regulatory oversight. Soros’ investing principles are based on his theory of “reflexivity.” The theory of reflexivity is that individual investor biases affect both market transactions and the economy, resulting in chaotic financial markets and the mispricing of assets.
Based on its latest report, the firm’s top trade by a long shot was a new stake in Rivian Automotive Inc. (RIVN, Financial). In fact, Rivian is now the top holding in Soros’ equity portfolio. The firm also reduced its holdings in the PowerShares QQQ Trust Ser 1 (QQQ, Financial) and Liberty Broadband Corp. (LBRDK, Financial) and booked profits when VEREIT Inc. (VER, Financial) and PPD Inc. (PPD, Financial) were acquired.
Rivian Automotive
Soros’ firm reported having 19,835,761 shares of Rivian Automotive (RIVN, Financial) in its equity portfolio as of the end of the fourth quarter, giving the stock a 31.87% equity portfolio weight and catapulting it to the number one holding. Shares averaged $114.72 apiece during the quarter.
Founded in 2009 and headquartered in Irvine, California, Rivian is an electric vehicle automaker and automotive technology company. Its focus is on trucks and sport utility vehicles, and it just began producing vehicles in 2021.
On Feb. 18, shares of Rivian traded around $66.36 for a market cap of $60.19 billion. Since going public in November 2021, the stock has fallen 34%.
GuruFocus rates the company’s financial strength 3 out of 10 and its profitability 1 out of 10. While production has begun, this company is still very much in the developmental stage, as shown by the below chart showcasing quarterly revenue and net income:
PowerShares QQQ Trust Ser 1
The firm sold 97.63% of its shares in the PowerShares QQQ Trust Ser 1 (QQQ, Financial), ending the quarter with only 23,590 shares and shaving 6.95% off the equity portfolio. During the quarter, shares traded for an average price of $386.05.
The PowerShares QQQ Trust Ser 1 is an exchange-traded fund that tracks the Nasdaq 100 Index.
On Feb. 18, the ETF traded around $343.95 per share for a market cap of $180.97 billion, a price-earnings ratio of 29.23 and a price-book ratio of 7.95. It has achieved a one-year return of 3.95%, a three-year annualized return of 26.89% and a five-year annualized return of 22.49%.
Liberty Broadband
Soros Fund Management trimmed its Liberty Broadband (LBRDK, Financial) stake by 16.71%, ending the quarter with 3,249,893 shares and slimming the equity portfolio by 2.25%. Shares traded for an average price of $164.24 during the quarter.
Liberty Broadband is a holding company for two subsidiaries, Charter Communications and TruePosition, which operate in the cable-broadband and mobile location technology businesses, respectively. The company is headquartered in Englewood, Colorado.
On Feb. 2, Liberty Broadband traded around $147.98 per share for a market cap of $26.20 billion. According to the Peter Lynch chart, the stock is trading above its fair value but below its median historical valuation.
The company has a financial strength rating of 3 out of 10 and a profitability rating of 3 out of 10. Warning signs include poor financial strength and declining revenue per share, but on the positive side, both the top and bottom lines are beginning to increase again.
VEREIT
The firm exited its 4,357,631-share stake in VEREIT (VER, Financial). Previously, the stock took up 3.94% of the equity portfolio. Shares averaged $49.13 apiece in the quarter.
VEREIT is a real estate investment trust based out of Phoenix. It owns and manages single-tenant retail, restaurant, office and industrial properties.
The REIT was acquired by larger industry peer Realty Income Corp. (O, Financial) on Nov. 1, 2021, with VEREIT shareholders receiving 0.705 shares of Realty Income common stock for each share of VEREIT owned. Realty Income did not show up in Soros’ 13F report, so the position was likely sold in order to take advantage of the acquisition price.
PPD
The firm ended the quarter without its previous 2,800,259-share investment in PPD Inc. (PPD, Financial), which used to account for 2.62% of the equity portfolio. During the quarter, shares changed hands for an average price of $47.14.
PPD is a contract research organization based in Wilmington, North Carolina. It focuses on providing comprehensive drug development, laboratory and lifecycle management services for researchers.
On Dec. 8, 2021, PPD was acquired by scientific instrumentation and consumables juggernaut Thermo Fisher Scientific Inc. (TMO, Financial). Valued at a total of $17.4 billion, the acquisition deal paid $47.50 per share in cash to shareholders of PPD.
Portfolio overview
As of the quarter’s end, Soros Fund Management held shares of 256 common stocks in an equity portfolio valued at $6.45 billion. The turnover for the quarter was 43%.
The top holdings were Rivian with 31.87% of the equity portfolio, Liberty Broadband with 8.11% and D.R. Horton Inc. (DHI, Financial) with 6.10%.
In terms of sector weighting, the firm was most invested in the consumer cyclical sector, followed distantly by communication services.
