We prepared the following article about the growth stocks in George Soros’ 13F portfolio 4 months ago. We don’t have to wait 4 months to figure out what would happen if we imitated George Soros’ growth stock picks. The original article will be presented in quotations whereas our new comments will be in regular paragraphs:
George Soros is an American investor and the founder of Soros Fund Management. Whenever George Soros makes an investment decision, the market notices it. In Q1 2022, the value of the billionaire’s US stock holdings saw a decrease of about $2 billion. The decline was driven by a lowering of his stake in Rivian Automotive, Inc. (NASDAQ:RIVN) and the closing of some of the major holdings, such as IHS Markit Ltd.
George Soros was right about trimming his market exposure, dumping his IHS position whose stock lost 40% of its value, and cutting his stake in Rivian Automotive (RIVN) which lost a quarter of its value.
Keeping in view the current economic situation, George Soros discouraged investors from investing in China as the country’s real estate boom was dying down. As reported by CNN in February, Soros stated that the “unsustainable” model had enticed many to invest in property and real estate companies at a time when China was finding itself in the middle of an economic crisis. To support his perspective, the billionaire discussed the case of Evergrande, a real estate group in China that is struggling to repay its liabilities due to stringent national policies.
George Soros was also right about Chinese stocks as Chinese heavyweights like Alibaba (BABA) lost a third of its value since the end of the first quarter.
Despite the economic certainty, Soros Fund Management has not taken refuge in defensive stocks like most investment firms in Q1 2022. Instead, the hedge fund has initiated new positions or increased its holdings in growth stocks that have been outperforming the broader market. The fund’s chief executive and chief investment officer, Dawn Fitzpatrick, stated that even though inflation is rising at a faster rate than the increase in wages, US consumer still has enough money to settle their credit card debts. In an interview with Bloomberg, Fitzpatrick appeared unfazed by the inevitable recession and added that “rate increases will slow the economy and will impact inflation, but this economy has some shock absorbers built-in.”
Fitzpatrick was proven right over the last 6 months. We haven’t seen any increase in unemployment rate and the US consumers are still very strong. Yet, the inflation rate finally started to come down. On the other hand, growth stocks haven’t been doing well since the end of the first quarter.
Out of the ten stocks covered in this article, Soros Fund Management has increased its stake in eight stocks either by initiating a new position or adding to its previous holdings. Unlike Warren Buffett, who believes in value investing in entities with strong fundamentals and financials with a long-term investment horizon, Soros is a contrarian and speculative investor who relies on short-term movements in the market. Some of the notable names included in Soros’ Q1 2022 portfolio are Alphabet Inc. (NASDAQ:GOOG), Amazon.com, Inc. (NASDAQ:AMZN), and Salesforce, Inc. (NYSE:CRM).
We have used the first quarter portfolio of Soros Fund Management to select these stocks. Companies with strong business fundamentals and growth prospects have been analyzed. Furthermore, we have also mentioned the number of hedge fund holders for each stock to give investors an idea about the popularity of these companies amongst institutional investors. Over 900 elite funds were tracked by Insider Monkey at the end of Q1 2022 to determine the hedge fund sentiment.
The five stocks that we covered below, Proterra Inc (PTRA), Qualcomm Incorporated (QCOM), Aptiv PLC (APTV), Intuit Inc (INTU), indie Semiconductor Inc. (INDI) lost an average of 6.5% since the end of the first quarter, but outperformed the S&P 500 ETF (SPY)’s 11% loss during the same period. Let’s take a look:
10 Growth Stocks in Billionaire George Soros’ Portfolio
10. Proterra Inc. (NASDAQ:PTRA)
Number of Hedge Fund Holders: 16
Soros Fund Management’s Holdings: $21,922,000
Percentage of Soros Fund Management’s Portfolio: 0.33%
Stock Price as of June 30: $4.76
Return since March 31: -8.5%
Proterra Inc. (NASDAQ:PTRA) is a Burlingame, California-based commercial electric vehicles (EVs) designer and manufacturer that went public at the peak of the special purpose acquisition vehicle (SPAC) boom during Q2 2021. Proterra Inc. (NASDAQ:PTRA) has sold 1,300 buses to more than 135 transit agencies across 43 US and Canadian states since its inception. The company provides not only commercial EVs but also offers complete charging solutions.
Proterra Inc. (NASDAQ:PTRA) stock has lost 70% of its value since its IPO and has been engulfed with ongoing supply chain issues. Soros Management’s current holding is still equivalent to 2% of the company, making it the third biggest hedge fund holder of the stock. Michael Shlisky at DA Davidson also has a positive outlook on Proterra Inc. (NASDAQ:PTRA) as he initiated coverage on the stock with a Buy rating and a price target of $10 in a note issued on June 1. The analyst considers Proterra Inc. (NASDAQ:PTRA) stock as one of the pre-vetted, quality EV-truck companies. Shlisky added that the organization is also coming up as a first-choice battery provider to manufacturers of electric trucks.
As of Q1 2022, Proterra Inc. (NASDAQ:PTRA) was held by 16 hedge funds.
9. QUALCOMM Incorporated (NASDAQ:QCOM)
Number of Hedge Fund Holders: 73
Soros Fund Management’s Holdings: $23,571,000
Percentage of Soros Fund Management’s Portfolio: 0.35%
Stock Price as of June 30: $131.60
Return since March 31: -19.7%
QUALCOMM Incorporated (NASDAQ:QCOM) is a San Diego, California-based wireless technology company that produces critical components for 5G-enabled smartphones, electric vehicles, cameras, and smart homes.
On June 28, the equity research team at Bank of America added QUALCOMM Incorporated (NASDAQ:QCOM) to the “US 1 List.” The list comprises the best publicly listed investment ideas across every sector of the economy. The company has a bright outlook as it has been reported that the Cupertino, California-based tech giant Apple Inc (NASDAQ:AAPL) has failed to come up with its own 5G chips for iPhones. Hence, it would have to rely upon QUALCOMM Incorporated (NASDAQ:QCOM) as its exclusive partner.
QUALCOMM Incorporated (NASDAQ:QCOM) would be responsible for providing 100% of the chips for iPhones produced till the second half of the next year. This will surely provide an impetus to the top line and bottom line of the company. By the time Apple is prepared to replace Qualcomm’s chips in its devices, QUALCOMM Incorporated’s (NASDAQ:QCOM) other businesses would have matured and would counteract the adverse effect of losing the partnership.
QUALCOMM Incorporated (NASDAQ:QCOM) was discussed in the Q4 2021 investor of ClearBridge Investments. Here’s what the firm said:
“Market strength continued in the fourth quarter, with only the communication services sector down in the Russell 1000 Value Index. Portfolio returns benefited from the strong performance of semiconductor maker Qualcomm, which has executed exceptionally well in pursuing the transition to 5G, growing both content and share due to its leadership position in cellular technology. The chipmaker recently outlined a number of peripheral growth opportunities outside of mobile markets, including automotive (where it hopes to leverage its strong presence in the automotive infotainment space into advanced driver assistance systems), Internet of Things (including opportunities in the PC market, VR/AR market, and factory automation) and radio frequency (where mmWave adoption globally, including China, would drive substantial upside).”
QUALCOMM Incorporated (NASDAQ:QCOM) was held by 73 funds at the end of Q1 2022.
8. Aptiv PLC (NYSE:APTV)
Number of Hedge Fund Holders: 48
Soros Fund Management’s Holdings: $29,313,000
Percentage of Soros Fund Management’s Portfolio: 0.44%
Stock Price as of June 30: $95.61
Return since March 31: -6.7%
Aptiv PLC (NYSE:APTV) is an Irish-American automotive technology corporation involved in advanced safety and user experience, signal and power solutions, and autonomous mobility.
In a note issued to investors on June 1, Mark Delaney at Goldman Sachs gave Aptiv PLC (NYSE:APTV) stock a target price of $135 with a Buy rating. The analyst gave the rating and target price, keeping in view the existing supply chain challenges in the short-term along with an anticipation of lower demand in the medium term. Delaney anticipates automobile production of 79 million in 2022 and 84 million in 2023 globally. The analyst lowered the US seasonal adjusted annual rate (SAAR) forecast to 14.5 million for 2022 due to rising interest rates and high inflation. Aptiv PLC (NYSE:APTV) is expected to be a beneficiary of faster EV adoption.
Aptiv PLC (NYSE:APTV) was mentioned in the Q1 2022 investor letter of ClearBridge Investments. Here’s what the firm said:
“The acceleration in electrification of transport should support electric vehicle (EV)-related stocks like Aptiv (NYSE:APTV), which came under pressure in the quarter on concerns the auto cycle is past its peak. Aptiv provides a range of solutions for the auto industry, including autonomous driving technologies, safety technologies, components, and wiring. The large exposure of APTV to EVs should lead to long-term value as EVs continue their growth, boosted by their relative attractiveness as prices at the pump hit near-historic highs.”
Aptiv PLC (NYSE:APTV) was held by 48 elite funds at the end of Q1 2022.
7. Intuit Inc. (NASDAQ:INTU)
Number of Hedge Fund Holders: 82
Soros Fund Management’s Holdings: $29,729,000
Percentage of Soros Fund Management’s Portfolio: 0.45%
Stock Price as of June 30: $386.29
Return since March 31: -14.7%
Intuit Inc. (NASDAQ:INTU) is a Palo Alto, California-based software corporation that specializes in developing financial software.
On May 25, Brad Reback at Stifel gave Intuit Inc. (NASDAQ:INTU) stock a Buy rating with a price target of $465. The analyst highlighted that the company delivered strong Q3 FY22 results despite a weak tax season. The impact of the weak tax season was countered by the strong performance of the company’s two brands, Credit Karma and Mailchimp. During the earnings calls, the management reiterated several times that the business is not getting impacted by economic uncertainty. However, Intuit Inc. (NASDAQ:INTU) is still exposed to a slowdown in the overall economy despite the size and diversity of its offerings ranging from Mint, QuickBooks, and TurboTax. Following the quarterly results, Intuit Inc. (NASDAQ:INTU) also raised its FY22 EPS guidance.
Baron Funds discussed its stance on Intuit Inc. (NASDAQ:INTU) in its Q1 2022 investor letter. Here’s what the firm said:
“At the company-specific level, with 59% of our holdings posting double-digit declines during the quarter, we had no chance to hold up against the Index that was down less than 5%. The good news is that for the most part, this draw-down did not result in a permanent loss of capital and in many cases, we believe fundamentals have remained robust or improved even though stock prices declined. One example is Intuit (NASDAQ:INTU), the leading provider of accounting software, and our second largest detractor in the quarter. The stock lost 25% of its value (or over $45 billion) due to a miss in quarterly revenues, which was driven by a slower start to the tax season, leading the company to miss consensus estimates for consumer revenues by about $190 million. The slower start to the tax season is of course insignificant to the intrinsic value of the business, as everyone knows there are only two certainties in life and one of them is – TAXES! And so, naturally, Intuit reaffirmed its annual projections. Moreover, results in other segments were ahead of expectations. CEO Sasan Goodarzi explained the outperformance during its quarterly conference call by saying:
‘We have a nearly $300 billion addressable market driven by tailwinds that include a shift to virtual solutions, an acceleration to online and omni-channel capabilities, and digital money offerings. This, combined with the team’s excellence and execution is contributing to the strength of our performance.’
More specifically, Intuit is gaining market share in tax filings (“we are on track to gain share overall again this season”), continues expanding its QuickBooks online offering, which was up 35% year-over-year, and is seeing strong synergies from its Credit Karma acquisition, driven by Intuit’s Lightbox technology, which allows better personalization of offerings to customers (for example, it “doubles the average approval rate for members who apply for credit cards on Credit Karma versus outside of Credit Karma”). The bottom line is that our estimates of Intuit’s intrinsic value were up while the stock price was down and therefore our future expected return has increased.”
Overall, 82 funds held a stake in Intuit Inc. (NASDAQ:INTU) at the end of Q1 2022.
6. indie Semiconductor, Inc. (NASDAQ:INDI)
Number of Hedge Fund Holders: 17
Soros Fund Management’s Holdings: $34,018,000
Percentage of Soros Fund Management’s Portfolio: 0.51%
Stock Price as of June 30: $6.18
Return since March 31: 17.3%
indie Semiconductor, Inc. (NASDAQ:INDI) is an Aliso Viejo, California-based provider of semiconductor components to the automotive industry. The company was founded in 2007. At that time, the average cost of semiconductor components in a car stood at $200. However, over the years, this has increased to thousands of dollars due to technological advancement.
The portfolio of products offered by indie Semiconductor, Inc. (NASDAQ:INDI) has an addressable market of $16 billion, which is expected to increase to $38 billion by 2025. The company reported a backlog of $2.6 billion during Q4 2021, while its market capitalization stands at around the $800 million level. In Q1 2022, indie Semiconductor, Inc. (NASDAQ:INDI) reported an EPS GAAP Actual of $0.07, surpassing the analysts’ estimates by $0.35. Furthermore, the company also beat the revenue estimates for the quarter by $428.8K.
Here’s what Baron Funds said about indie Semiconductor, Inc. (NASDAQ:INDI) in its Q3 2021 investor letter:
“Indie Semiconductor, Inc. is a fabless designer, developer, and marketer of automotive semiconductors for automated driver assistance systems, user experience, and electrification applications. Indie leverages its cross-domain semiconductor expertise in analog, processing and power chips to integrate multiple chips and capabilities into a single package and offer its customers lower cost products in a smaller form-factor. Indie has strong market share in applications such as Apple CarPlay and ultrasonic parking assist with multiple contracts ramping in the coming quarters in applications such as advanced lighting controls, telematics, and electrification. The stock rose on increasing investor recognition of the longer-term opportunity for the company, especially in light of the current automotive semiconductor supply shortage. Semiconductor content in cars is expected to grow substantially over the coming decade as automated safety features and electrification penetrate an increasing percentage of vehicles.”
Out of the 912 hedge funds in Insider Monkey’s database, 17 funds held a stake in indie Semiconductor, Inc. (NASDAQ:INDI) as of Q1 2022.
Besides indie Semiconductor, Inc. (NASDAQ:INDI), Soros also has a stake in popular companies such as Alphabet Inc. (NASDAQ:GOOG), Amazon.com, Inc. (NASDAQ:AMZN), and Salesforce, Inc. (NYSE:CRM) as of Q1 2022.
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Disclose. None. 10 Growth Stocks in Billionaire George Soros’ Portfolio is originally published on Insider Monkey.