9 Stocks George Soros Is Buying for 2015: Yahoo!, American Airlines and More

 

 

NEW YORK (Stockpickr) -- At Stockpickr, we track the top holdings of a variety of high-profile investors, such as Warren Buffett and Carl Icahn.

One of our most popular professional portfolios is that of George Soros' Soros Fund Management. Keeping in mind that Soros Fund Management conducts hundreds of transactions every quarter -- in the most recently reported quarter, for example, the firm increased its stake or purchased new positions in close to 200 stocks -- we thought we'd single out some of its recent top buys.

What follows is a closer look at nine of the 30 holdings that Stockpickr tracks in its George Soros portfolio. These stocks all saw position increases in the most recently reported quarter ended Sept. 30.

9. Dow Chemical

Dow Chemical (DOW) comprises 1.1% of Soros' portfolio as of the most recently reported quarter. The 2.9 million-share position is an increase of 2.1 million shares, or 253.44%, over the previous quarter.

TheStreet Ratings team rates Dow Chemical as a buy with a ratings score of A-. TheStreet Ratings team has this to say about its recommendation:

"We rate Dow Chemical (DOW) a buy. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Chemicals industry. The net income increased by 38.0% when compared to the same quarter one year prior, rising from $679.00 million to $937.00 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 6.8%. Since the same quarter one year prior, revenues slightly increased by 4.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.77, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.29, which illustrates the ability to avoid short-term cash problems.
  • Net operating cash flow has increased to $1,775.00 million or 26.60% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -13.80%.

You can view the full analysis from the report here: DOW Ratings Report



8. Motorola Solutions

Motorola Solutions (MSI) comprises 1.1% of Soros' portfolio as of the most recently reported quarter. The 2.4 million-share position is an increase of 542,615 shares, or 29.5%, over the previous quarter.

TheStreet Ratings team rates Motorola Solutions as a buy with a ratings score of B. TheStreet Ratings team has this to say about its recommendation:

"We rate Motorola Solutions (MSI) a buy. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 5.5%. Since the same quarter one year prior, revenues slightly dropped by 5.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The gross profit margin for Motorola Solutions is rather high; currently it is at 51.25%. Regardless of MSI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, MSI's net profit margin of 10.23% is significantly lower than the industry average.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Communications Equipment industry and the overall market, Motorola Solutions' return on equity exceeds that of both the industry average and the S&P 500.
  • Motorola Solutions has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, Motorola Solutions increased its bottom line by earning $3.66 versus $3.01 in the prior year. For the next year, the market is expecting a contraction of 31.4% in earnings ($2.51 versus $3.66).
  • The debt-to-equity ratio of 1.06 is relatively high when compared with the industry average, suggesting a need for better debt level management. Even though the debt-to-equity ratio is weak, MSI's quick ratio is somewhat strong at 1.34, demonstrating the ability to handle short-term liquidity needs.

You can view the full analysis from the report here: MSI Ratings Report

7. Polycom

Polycom (PLCM) comprises 1.1% of Soros' portfolio as of the most recently reported quarter. The 11.5 million-share position is an increase of 465,000 shares, or 4.2%, over the previous quarter.

TheStreet Ratings team rates Polycom as a hold with a ratings score of C+. TheStreet Ratings team has this to say about its recommendation:

"We rate Polycom (PLCM) a hold. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall."

Highlights from the analysis by TheStreet Ratings team go as follows:

  • Polycom reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, Polycom continued to lose money by earning -$0.11 versus -$0.21 in the prior year. This year, the market expects an improvement in earnings ($0.83 versus -$0.11).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Communications Equipment industry. The net income increased by 170.9% when compared to the same quarter one year prior, rising from -$23.98 million to $17.01 million.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 5.5%. Since the same quarter one year prior, revenues slightly dropped by 0.2%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Communications Equipment industry and the overall market, Polycom's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has declined marginally to $34.03 million or 6.01% when compared to the same quarter last year. Despite a decrease in cash flow Polycom is still fairing well by exceeding its industry average cash flow growth rate of -31.95%.

You can view the full analysis from the report here: PLCM Ratings Report

6. Phillips 66

Phillips 66 (PSX) comprises 1.4% of Soros' portfolio as of the most recently reported quarter. The 2.4 million-share position is an increase of 1.1 million shares, or 92.2%, over the previous quarter.

TheStreet Ratings team rates Phillips 66 as a hold with a ratings score of C. TheStreet Ratings team has this to say about its recommendation:

"We rate Phillips 66 (PSX) a hold. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, attractive valuation levels and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow, a generally disappointing performance in the stock itself and poor profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 120.6% when compared to the same quarter one year prior, rising from $535.00 million to $1,180.00 million.
  • PSX's debt-to-equity ratio is very low at 0.29 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.86 is somewhat weak and could be cause for future problems.
  • PSX has underperformed the S&P 500 Index, declining 21.78% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • Net operating cash flow has significantly decreased to $429.00 million or 77.98% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

You can view the full analysis from the report here: PSX Ratings Report

5. EQT

EQT (EQT) comprises 1.4% of Soros' portfolio as of the most recently reported quarter. The 2 million-share position is an increase of 315,861 shares, or 18.8%, over the previous quarter.

TheStreet Ratings team rates EQT as a buy with a ratings score of B-. TheStreet Ratings team has this to say about its recommendation:

"We rate EQT (EQT) a buy. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, growth in earnings per share, increase in net income and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 6.5%. Since the same quarter one year prior, revenues rose by 20.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.68, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with this, the company maintains a quick ratio of 2.77, which clearly demonstrates the ability to cover short-term cash needs.
  • EQT has improved earnings per share by 8.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, EQT increased its bottom line by earning $1.97 versus $1.22 in the prior year. This year, the market expects an improvement in earnings ($3.07 versus $1.97).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry average. The net income increased by 11.7% when compared to the same quarter one year prior, going from $88.26 million to $98.56 million.
  • The gross profit margin for EQT is currently very high, coming in at 70.34%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 17.02% significantly outperformed against the industry average.

You can view the full analysis from the report here: EQT Ratings Report

4. Yahoo!

Yahoo! (YHOO) comprises 1.5% of Soros' portfolio as of Sept. 30. The 5.1 million-share position was a new buy in the most recently reported quarter.

TheStreet Ratings team rates Yahoo! as a buy with a ratings score of A-. TheStreet Ratings team has this to say about its recommendation:

"We rate Yahoo! (YHOO) a buy. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity and reasonable valuation levels. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Internet Software & Services industry. The net income increased by 2183.5% when compared to the same quarter one year prior, rising from $296.66 million to $6,774.10 million.
  • YHOO's revenue growth trails the industry average of 28.8%. Since the same quarter one year prior, revenues slightly increased by 0.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • YHOO's debt-to-equity ratio is very low at 0.03 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 2.75, which clearly demonstrates the ability to cover short-term cash needs.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Internet Software & Services industry and the overall market, Yahoo!'s return on equity exceeds that of both the industry average and the S&P 500.

You can view the full analysis from the report here: YHOO Ratings Report

3. American Airlines Group

American Airlines Group (AAL) comprises 1.5% of Soros' portfolio as of the most recently reported quarter. The 5.6 million-share position is an increase of 3.1 million shares, or 121%, over the previous quarter.

TheStreet Ratings team rates American Airlines Group as a hold with a ratings score of C. TheStreet Ratings team has this to say about its recommendation:

"We rate American Airlines Group (AAL) a hold. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and increase in net income. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, weak operating cash flow and poor profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • AAL's very impressive revenue growth greatly exceeded the industry average of 30.9%. Since the same quarter one year prior, revenues leaped by 63.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 68.42% and other important driving factors, this stock has surged by 71.32% over the past year, outperforming the rise in the S&P 500 Index during the same period. Although AAL had significant growth over the past year, our hold rating indicates that we do not recommend additional investment in this stock at the current time.
  • In comparison to the other companies in the Airlines industry and the overall market, American Airlines Group's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • Net operating cash flow has significantly decreased to -$361.00 million or 875.67% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The debt-to-equity ratio is very high at 3.44 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, AAL maintains a poor quick ratio of 0.77, which illustrates the inability to avoid short-term cash problems.

You can view the full analysis from the report here: AAL Ratings Report

2. Level 3 Communications

Level 3 Communications (LVLT) comprises 1.9% of Soros' portfolio as of the most recently reported quarter. The 5.4 million-share position is an increase of more than 200% over the previous quarter.

There is no TheStreet Ratings data for Level 3 Communications at this time.

1. Alibaba Group Holding

Alibaba Group Holding (BABA) comprises 2.9% of Soros' portfolio as of Sept. 30. The 4.4 million-share position was a new buy in the most recently reported quarter.

There is no TheStreet Ratings data for Alibaba Group at this time.

For Soros' top 30 holdings, visit the George Soros portfolio on Stockpickr.

Stockpickr is a wholly owned subsidiary of TheStreet.com.

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