Stockpickr

Return to Article

Stockpickr: Soros Shuffles His Stock Picks

James Altucher

Last week, George Soros' fund made a new filing with the Securities and Exchange that details all of the transactions it made in the last quarter of 2006. Soros has been very busy, with 10 new positions and more than two dozen positions that he either exited or reduced through sales.

The George Soros page on Stockpickr summarizes his new portfolio, noting all of his recent transactions and his top new positions.

Soros' biggest position now is Companhia Vale Do Rio Doce(RIO Quote), which, because he increased it more than 1,400% since the prior quarter's filing, now accounts for 9.6% of his portfolio.

The Brazilian company produces, exports and supplies iron ore and pellets to the steel-making industry. Additionally, it produces and sells many other metals, including nickel, gold, copper and aluminum.

CVRD is the ultimate "BRIC" (Brazil, Russia, India, China) and commodities play. If you believe in a weaker dollar and a weaker U.S. in general, as Soros clearly does, then CVRD is your bet. According to analysts covering the company, CVRD has a forward price-to-earnings, or P/E, ratio of just 9. Analysts expect earnings per share to rise from $2.10 in 2005 to $3 in 2006 and to $4 in 2007.

Another super hedge fund that owns CVRD is Moore Capital, which has more than $10 billion in assets and is run by famed trader Louis Bacon. Its flagship fund has been up 24% per year since its inception in 1990. Bacon takes a global macro approach to investing, having started his career trading for the likes of Paul Tudor Jones and Bruce Kovner of Caxton Associates. For the rest of its top holdings, check out Moore Capital's portfolio on Stockpickr.

Soros' second-largest holding is International Rectifier (IRF Quote), a new position since his last filing. IRF makes up 4.8% of Soros' portfolio.

Soros is a believer in global warming and is placing his bets on several companies that are developing cleaner energy alternatives. IRF makes products ranging from integrated circuits, power components and power systems that are used in power-management devices.

On Jan. 25, the company announced that its second-quarter profit jumped higher than Wall Street expected, earning 58 cents a share when analysts were expecting 54 cents. The day after earnings, Nollenberger Capital Partners put out a buy rating, stating, "We believe IRF is the play on the trend for energy efficiency." Despite 200% year-over-year earnings growth, the company trades at a forward P/E of just 16.

Two other funds that own IRF are Chris Davis of the Davis Funds and the Powershares Clean Energy ETF.

Soros has also been making bets in the big oil-exploration companies, such as GlobalSantaFe(GSF Quote) and Transocean(RIG Quote). GlobalSantaFe, as I've written before, is also owned by T. Boone Pickens. Pickens is a believer in the peak-oil theory -- the idea that the planet is slowly running out of oil. His investments all stem from that core philosophy.

Also noteworthy are Soros' new technology investments. He is making the bet now that telecom equipment providers are going to be on the move up. New investments include TriQuint Semiconductor(TQNT Quote) and Ciena(CIEN Quote). TriQuint, despite being a former tech highflier, finds itself now on the Low Price Value Line System, a portfolio of stocks that Value Line rates 1 or 2 and that trade for less than $10.

To see the rest of Soros' new picks, plus the stocks he recently sold out of, check out Soros' portfolio on Stockpickr.

Stockpickr Tip of the Day: In addition to Soros, I also like to keep track of former Soros protege Michael Karsch, who runs Karsch Capital. Karsch was a managing director at Soros Fund Management, where he was primarily responsible for investing in value stocks for the Quantum Fund.

Karsch recently updated his holdings, and he, too, is investing heavily in tech, greatly increasing his positions in companies such as Applied Materials(AMAT Quote), Applied Micro Circuits(AMCC Quote) and Integrated Device Technology(IDTI Quote). Karsch is also not afraid to go activist. He's currently waging a fight against the board at CSK Auto(CAO Quote).