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James Li
James Li
Articles (618)  | Author's Website |

George Soros Fuels Buffett’s Wells Fargo in 1st Quarter

Guru also initiates positions in Amazon and two other major banks

George Soros (Trades, Portfolio), manager of Soros Fund Management, disclosed on Tuesday his top five buys for the first quarter were VICI Properties Inc. (NYSE:VICI), JPMorgan Chase & Co. (NYSE:JPM), Amazon.com Inc. (NASDAQ:AMZN), Wells Fargo & Co. (NYSE:WFC) and Citigroup Inc. (NYSE:C).

Soros focuses on a theory of “reflexivity,” which is based on the premise that individual investor biases affect market transactions and the economy. Investors can find opportunities by carefully studying the value and market prices of assets.

VICI Properties

Soros invested in 21,498,926 shares of VICI Properties for an average price of $19.99 per share. The fund manager dedicated 7.28% of his portfolio to the position.

VICI Properties owns, acquires and develops real estate assets across gaming, hospitality, entertainment and leisure destinations through its two business segments: Real Property and Golf Course. Even though the real estate investment trust has a weak Altman Z-score of 1.17, its operating margin of 82.44% outperforms 73% of global competitors.

JPMorgan Chase

Soros invested in 719,600 shares of JPMorgan Chase for an average price of $113.23 per share. The fund manager dedicated 1.46% of his portfolio to the position.

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JPMorgan CEO Jamie Dimon said on April 13 that the bank continued “building on the strong momentum” from the prior year, including maintaining its number-one rank in global investment banking fees and double-digit revenue growth across key business segments.

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Ken Heebner (Trades, Portfolio)’s Capital Growth Management and Ray Dalio (Trades, Portfolio)’s Bridgewater Associates also established positions during the quarter.

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Amazon

Soros invested in 44,200 shares of Amazon for an average price of $1,430.19 per share. The fund manager dedicated 1.18% of his portfolio to the position.

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CEO Jeff Bezos said on April 26 the company achieved double-digit revenue growth during the quarter, driven by “strong momentum” in Amazon Alexa and Amazon Web Services. The online retail giant’s profitability ranks 9 out of 10, driven by expanding operating margins, consistent revenue growth and a strong Piotroski F-score of 7. GuruFocus ranks Amazon’s business predictability four stars out of five.

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CNBC columnist Anita Balakrishnan said Amazon is “closing on the site of its new headquarters” following visits to the 20 finalist locations.

Wells Fargo

Soros invested in 1,132,913 shares of Wells Fargo for an average price of $59.40 per share. The fund manager dedicated 1.10% of his portfolio to the position.

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Wells Fargo said on May 4 that net revenues of $5.1 billion reflected an $800 million “discrete litigation accrual” in connection with consent orders from the Consumer Finance Protection Bureau and Office of the Comptroller of the Currency. Despite this, the bank’s net margin of 25.22% is near a 10-year high of 28.13% even though it ranks higher than just 59% of global banks.

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Berkshire Hathaway Inc. (NYSE:BRK.A)(NYSE:BRK.B) CEO Warren Buffett (Trades, Portfolio) owns over 456 million shares of Wells Fargo as of March 31, despite selling 1,719,204 shares during the quarter.

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Citigroup

Soros invested in 703,918 shares of Citigroup for an average price of $75.21 per share. The fund manager dedicated 0.88% of his portfolio to the position.

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Citigroup’s profitability ranks a poor 3 out of 10 primarily due to margins and returns underperforming over 90% of global competitors.

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Disclosure: No positions.

About the author:

James Li
I am an editorial assistant and researcher at GuruFocus. I have a Master's in Finance from SMU, and I enjoy writing reports on financial trends and investor portfolios. Follow me on Twitter at @JamesLiGuru!

Visit James Li's Website


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