BALTIMORE (Stockpickr) -- With economic concerns continuing to weigh on the market, it's no surprise that some of Wall Street's most-storied investors are increasing their cash positions right now. Take George Soros, for example: The billionaire investor's firm sold off $182 million in stocks last quarter, closing out holdings in more than 140 companies. But as bleak as that snapshot may look, more important are the stocks Soros is adding to his fund.
Here's an analytical look at three key stocks Soros Fund Management is
Through the Quantum Fund, which he founded with Jim Rogers in 1970, Hungarian-born Soros became a well-known proselytizer of international investing. It's a strategy that worked out well for Soros, netting him an estimated $14 billion in the years since, including an estimated $1.1 billion on Black Wednesday 1992 alone by betting heavily against the pound sterling.
Since that time, investors have clung to Soros' investment precepts in hopes that they could replicate his success. We'll take a more direct route today by investigating some of the specific stocks that Soros and his investment team are bullish on in 2010.
Just as overseas stocks arguably made Soros' fortune, his fund continues to take big positions in overseas companies. Take
, for instance. The Finnish mobile device company was one of a handful of new positions opened by Soros Fund Management in the last quarter. Nokia has long been a key player in the highly competitive cellular phone market, having captured roughly a third of the global cellular handset market.
The company has done that effectively by putting tremendous efforts into both its low-cost entry-level phone offerings, which are extremely popular in emerging-market economies where cellular phones are still seeing steady growth, and its next-generation smartphone products. The next step for the handset manufacturer is transactional and service-based revenues. Taking a page from Apple's playbook, Nokia's Ovi platform offers the company's handset users a mobile media store that could spur significant top-line growth in the coming quarters.
A tumbling Euro is actually panning out well for the Finnish firm. Because Nokia's Euro-denominated business is so big worldwide, the company should recognize material currency conversion gains. And while that's a scenario that's less attractive for the company's 9 billion euros in the bank, at least any devaluation is offset by a devaluation of Nokia's already-manageable debt load. Soros Fund Management thinks the situation will be favorable in 2010; the group picked up $16.9 million worth of Nokia shares to open its position in the company.
Another international stock that was one of Soros' biggest new holdings in the last quarter was
, in which the fun added a hefty $33 million stake to its portfolio. Latin America was one of the key international investing battlegrounds in the 2000s as fast growth was met by a supreme correction in 2008 following the credit crunch. But with stocks seemingly back on track, Soros is re-upping his exposure to the region and betting on continued growth in the Argentinean telecom industry.
Argentina's telecom business is historically extremely volatile, a double-edged sword that potentially increases the gain potential of a stake in the country's biggest player. While fixed lines don't provide the income stability that they do here in the U.S., the company has done its part to lure investors by expanding its mobile offerings, a huge growth market in Latin America that many analysts believe will replace the consumer fixed-line business because of its low cost and flexibility.
Of course, that organic growth argument completely ignores the 10.6% dividend yield that the company is currently offering its investors. That dividend -- and a balance sheet position that could extinguish 100% of debt with cash on hand -- makes this company a very attractive play for a less-than-stable equity market right now.
Of course, George Soros hasn't completely eschewed domestic stocks. One of his biggest new positions was Pittsburgh-based
PNC Financial Services
, a $30 billion banking stock that Soros' fund put $54 million into this past quarter.
PNC was one of the many relatively healthy U.S. banks that made bargain-basement acquisitions in 2008 as their competitors were dropping like flies. In PNC's case, the buy target was National City, a bank that essentially doubled the bank's asset base and increased its exposure to the Rust Belt. While that acquisition lowered the quality of PNC's loan book, financial recovery is playing out well for the company. Ultimately, it looks like its National City integration is one of the better-managed large-scale bank mergers. For that reason, PNC could be the beneficiary of accelerated growth once lending completely returns to normal.
To see the rest of George Soros' favorite stocks, check out his
-- Written by Jonas Elmerraji in Baltimore.
Follow Stockpickr on
and become a fan on
Jonas Elmerraji is the editor and portfolio manager of the
Rhino Stock Report
, a free investment advisory that returned 15% in 2008. He is a contributor to numerous financial outlets, including
, and has been featured in
Investor's Business Daily