What Would George Soros Do? 7 Stocks the Billionaire’s Fund Bought & Sold in Q4
George Soros stocks will always remain relevant for savvy investors. As one of the most successful financiers in history, George Soros’s investment strategies attract a massive audience worldwide. His Soros Fund Management, boasting a portfolio value of more than $7.6 billion and managing 209 current positions, stands as a beacon for investors looking to navigate the stock market.
In the article, we dive into the latest shifts in the billionaire’s portfolio, looking at his top buys and sells during the last quarter. Analyzing these strategic choices aims to provide a cautionary yet analytical perspective on potential market trends.
Hence, without further ado, let’s delve into the seven stocks George Soros traded in the fourth quarter (Q4), offering a guide for investors looking to mirror the achievements of a true giant in the investment realm.
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Bought: Splunk (SPLK)
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Splunk (NASDAQ:SPLK) stands out as a beacon of operational intelligence in the dynamic big data landscape. Its track record of growing its top-line by double-digit margins continued into the fourth quarter (Q4). The company delivered a GAAP earnings-per-share (EPS) of $2.28, comfortably surpassing expectations by $1.19.
Moreover, its revenues surged to $1.49 billion, marking a 19.2% year-over-year (YOY) increase, outperforming forecasts by $220 million. This financial vigor, paired with a total annual recurring revenue (ARR) growth of 15% to $4.2 billion, paints a picture of a fundamentally solid business.
George Soros added over one million shares of Splunk in the wake of Cisco Systems’ $28 billion acquisition announcement at $157 per share. Such maneuvers underscore a wise investment strategy, leveraging Splunk’s strong financials and the potential uptick from the Cisco deal to seek substantial returns.
Sold: Arm Holdings (ARM)
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Arm Holdings (NASDAQ:ARM) has experienced robust growth, with a major portion of its value appreciation occurring after it reported strong earnings this month. Following its hefty top-and-bottom-line beats, Arm’s stock price saw a substantial bump in value, with ARM stock up a massive 93% this 94%.
The company’s Q4 earnings showed a $61 million beat on sales, totaling $824 million, marking a major improvement from the previous quarter. Furthermore, company executives have commented to on the increasing demand for their microchips from AI companies and their expansion into new markets, such as cloud computing and the automotive sphere.
Surprisingly, Soros made a notable move by selling his entire stake in Arm Holdings, consisting of 325,000 shares. The decision to sell came after the fund acquired the stake in the third quarter (Q3), preceding the massive rise in ARM’s share price following an impressive Q4 earnings print. Hence, the sequence of events suggests a missed opportunity indicative of the complexities and timing challenges of investment decisions.
Sold: Alphabet (GOOG,GOOGL)
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The decision by Soros Fund Management to reduce its stake in Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) in the past couple of quarters presents a complex picture. The fund first invested in Alphabet stock in Q1 2017, and since then, the stock’s value has more than tripled. Yet, the sale of 185,000 shares in the last quarter indicates a strategic shift.
This move could be attributed to multiple factors, including the controversy surrounding the images generated by the Gemini AI chatbot, risking a potential public backlash. Additionally, GOOG stock shot up 50% in value last year, leading to concerns over its lofty valuations.
GOOG stock trades at an unattractive 5 times forward sales estimates, ahead of the sector median by 3000%. Hence, such a lofty valuation, combined with the potential brand risks linked to Gemini’s rollout, could have resulted in Soros trimming his stake in GOOG stock.
Bought: Novo Nordisk (NVO)
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Novo Nordisk (NYSE:NVO) is a Denmark-based pharma business specializing in insulin and diabetes care. Despite its extensive drug portfolio, investor excitement centers on the anticipated FDA approval expansion of its weight loss drug, Wegovy, for cardiovascular disease patients. It’s likely no coincidence that Soros added 29,000 shares of NVO stock in Q4, adding to his existing stake of 1.52 million.
Novo Nordisk’s weight loss drug, Wegovy, is planned in pill form in addition to its injection intake, given the more appealing oral intake. However, the pill requires more active ingredients, which needs more manufacturing. Hence, in addressing the requirements, Novo Nordisk is acquiring three factories from Catalent for $11 billion, reassuring investors its capability to capitalize on this massive market opportunity.
Bought: AerCap Holdings (AER)
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AerCap Holdings (NYSE:AER) strategic pivot from China, reducing its exposure to the country, signifies a well-thought-out diversification strategy. Moreover, the aviation leasing company boasts a robust portfolio despite these fiscal adjustments. It is focusing on innovative new aircraft and strategically timing its order book. Moreover, its raised capital expenditures to $6.2 billion for fleet renewal with more efficient and market-aligned aircraft models shows its dedication to maintaining a competitive edge.
Hence, in this evolving landscape, Soros initiated a sizeable position in AerCap during the first quarter (Q1) of 2023 through his investment vehicle, Soros Fund Management. By Q4, Soros had expanded this investment by roughly 612,000 shares, holding more than 2.4 million shares in AER stock, valued at over $194 million. The investment reflects a strategic move to capitalize on AerCap’s industry-leading approach to fleet modernization and geographic diversification.
Bought: Jacobs Solutions (J)
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Engineering firm, Jacobs Solutions (NYSE:J) has showcased remarkable financial prowess, marked by healthy revenue growth and a commendable decrease in its long-term debt obligations. Moreover, its strategic focus on growing margins through targeted cost-reduction initiatives further highlights its operational efficiency. Additionally, its decision to spin off its government services division is a tactical move aimed at refining its business model, promising to bolster profitability.
Furthermore, its Q1 2024 performance exceeded estimates across both lines again, alongside a consistent 4.7% backlog growth. The firm has beaten estimates across both lines in eight straight quarters, underscoring its solid business momentum and positive future outlook. Additionally, its management has set an ambitious target to improve margins by 300 basis points within the next few years.
In alignment with this positive trajectory, Soros increased his stake in the company during Q4, adding 172,400 shares. Soros now holds approximately 370,000 shares in Jacobs Solutions.
Sold: CRH (CRH)
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CRH (NYSE:CRH) is a globally diversified building materials company that caught Soros Fund Management’s attention in Q3. Soros’s initial acquisition of more than two million shares underscored a strong belief in CRH’s unique market position and its long-term potential for expansion. However, a strategic adjustment was made in Q4, leading to more than 610,000 shares being sold while retaining over 1.4 million in the business.
This decision to reduce the stake in CRH is likely to be linked to the company’s bloated valuation, especially following CRH’s outperformance relative to the broader market in recent months. This outperformance was supported by aggressive share repurchase programs and its U.S. primary listing completion. Consequently, CRH stock now trades at forward non-GAAP earnings multiple of 17.5 times, which is 11% above the sector median, suggesting a cautious approach by Soros.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines
Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.
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