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George Soros' Top 6 New Buys of the 1st Quarter

- By James Li

George Soros (Trades, Portfolio), manager of Soros Fund Management, disclosed last week his top six new buys for the first quarter were Ceridian HCM Holding Inc. (CDAY), Comcast Corp. (CMCSA), Grifols SA (GRFS), D.R. Horton Inc. (DHI), Celgene Corp. (CELG) and Altice USA Inc. (ATUS).


Managing a $3.81 billion equity portfolio, Soros invests using the theory of reflexivity and that financial markets are chaotic: The prices of securities depend on the individuals that buy and sell the securities, who often act out of emotional reactions instead of logical calculations. Opportunities can be found by studying the value and market prices.

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As of quarter-end, Soros' equity portfolio contains 147 stocks, of which 36 are new positions. The portfolio's top sectors in terms of portfolio weight are communication services, technology and financial services.

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Ceridian

Soros purchased 1.65 million shares of Ceridian, giving the stake 2.22% equity portfolio weight. Shares averaged $43.99 during the quarter.

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GuruFocus ranks the Minneapolis-based company's financial strength 5 out of 10: The cash-debt ratio of 7.13 underperforms 51.61% of global competitors while the debt-to-equity ratio of 0.40 underperforms 64.09% of global competitors.

Comcast

Soros purchased 1.1 million shares of Comcast, giving the stake 1.16% equity portfolio space. Shares averaged $37.55 during the quarter.

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The Philadelphia-based company said on May 14 that Walt Disney Co. (DIS) will assume full operational control of Hulu in exchange for the two companies to enter a "put / call" agreement regarding NBCUniversal's 33% stake. Per the agreement, Comcast can require Disney to buy the stake while Disney can require Comcast to sell the stake at fair market value on the transaction date.

On April 25, Comcast reported first-quarter earnings of 77 cents per share, up 16.7% from the prior-year quarter, driven by strong Ebitda growth. Comcast CEO Brian Roberts said Comcast Cable had "the [strongest] quarterly Ebitda growth in over a decade," driven by strong results from NBCUniversal.

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GuruFocus ranks Comcast's profitability 7 out of 10: Although the company's profit margins are outperforming over 83% of global competitors, its three-year revenue growth rate of 8.20% outperforms just 78.33% of global pay TV companies. Despite this, Comcast's business predictability ranks four stars out of five on strong revenue and earnings growth over the past 10 years.

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Tom Gayner (Trades, Portfolio) and Charles Brandes (Trades, Portfolio)' Brandes Investment Partners also purchased shares of Comcast during the quarter.

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Grifols

Soros purchased 2,125,925 shares of Grifols, giving the stake 1.12% equity portfolio weight. Shares averaged $19.11 during the quarter.

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The Spanish drug manufacturer collects plasma and then manufactures and sells plasma-based products around the globe. GuruFocus ranks the company's profitability 7 out of 10: Even though operating margins have declined approximately 3.7% per year over the past five years, Grifols' profit margins are still outperforming 90.26% of global competitors. Additionally, the company's business predictability ranks three stars out of five on consistent revenue growth over the past 10 years.

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D. R. Horton

Soros purchased 966,454 shares of D. R. Horton, giving the position 1.05% equity portfolio space. Shares averaged $39.07 during the quarter.

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The Arlington, Texas-based homebuilder builds single-family detached homes and offers products to entry-level, move-up, luxury buyers and active adults across 26 states. GuruFocus ranks D. R. Horton's profitability 8 out of 10: Operating margins have increased 4.30% per year over the past five years and are outperforming 81% of global competitors. Other positive investing signs include a strong Piotroski F-score of 7 and a three-year revenue growth rate that outperforms 87% of global residential construction companies.

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Celgene

Soros purchased 407,140 shares of Celgene, giving the holding 1.01% equity portfolio space. Shares averaged $87.12 during the quarter.

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GuruFocus ranks the Summit, New Jersey-based drug manufacturer's profitability 9 out of 10 on several positive indicators, which include a strong Piotroski F-score of 7 and operating margins that outperform 87.52% of global competitors.

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Other gurus riding Celgene's profitability include David Abrams (Trades, Portfolio), Seth Klarman (Trades, Portfolio), John Paulson (Trades, Portfolio) and Daniel Loeb (Trades, Portfolio).

Altice USA

Soros purchased 1.65 million shares of Altice USA, giving the stake 0.93% equity portfolio space. Shares averaged $20.17 during the quarter.

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The Long Island City, New York-based company operates in the telecommunications, media and entertainment businesses. GuruFocus ranks the company's financial strength 4 out of 10: Although the Piotroski F-score ranks a moderately strong 5 out of 9, Altice has several warning signs like interest coverage that is below Benjamin Graham's required threshold of 5, debt ratios that are above Joel Tillinghast's warning threshold of 4 and an Altman Z-score that suggests financial distress.

Disclosure: No positions.

Read more here:

  • Bestinfond's Top 5 Buys of the 1st Quarter
  • Leon Cooperman's Top 5 Buys in 1st Quarter
  • Philippe Laffont's Top 5 Buys of the 1st Quarter



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This article first appeared on GuruFocus.