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Soros Fund Management's new trades in Q313

Soros Fund Management's new trades in Q313 (Part 1 of 6)

Soros Fund Management starts new positions in MSFT, FDX, TEVA, HAL, Sells DAL, UAL – 13F Flash (A)

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Soros Fund Management is a large private fund run by the legendary team of famed investor George Soros. In Q3 2013, it started new positions in Microsoft Corp. (MSFT), Fedex Corp. (FDX), Teva Pharmaceuticals (TEVA), and Halliburton (HAL), and sold Delta Airlines (DAL) and United Continental Holdings (UAL).

Abbreviated financial summaries and metrics for these securities are included below. Detailed analysis and recommendations require a subscription (more information at the bottom of the article).

Why purchase Microsoft Corp. (MSFT)?

Microsoft’s stock has been on the rise recently on the back of positive earnings that beat analyst estimates this quarter, despite its core businesses being vulnerable to the decline in the PC market. The search for CEO Steve Ballmer’s replacement has also supported the stock price increase. The company boasts of a robust revenue growth, low debt-to-equity ratio, an improved return on equity, and at the current valuation levels offers a good buying opportunity.

Microsoft Corporation, headquartered in Redmond, Washington, generates revenue by developing, licensing, and supporting a wide range of software products. It offers an array of services, including cloud-based services to consumers and businesses, by designing and selling devices that integrates with its cloud-based services, and by delivering relevant online advertising to a global audience.

Since the 1990s, it has increasingly diversified from its core operating system market. As of 2013, Microsoft is market dominant in both the PC operating system and office suite markets (the latter with Microsoft Office). The company also produces a wide range of other software for desktops and servers, and is active in areas including internet search (with Bing), the video game industry (with the Xbox and Xbox 360 consoles), the digital services market (through MSN), and mobile phones (via the Windows Phone OS). The cloud-based computing services it offers include Microsoft Office 365, Microsoft Dynamics CRM Online, Windows Azure, Bing, Skype, Xbox LIVE, and Yammer. In June 2012, Microsoft announced that it would be entering the PC vendor market for the first time, with the launch of the Microsoft Surface tablet computer. On September 2, 2013, it entered into a definitive agreement to acquire substantially all of Nokia’s Devices & Services business, license Nokia’s patents, and license and use Nokia’s mapping services for $7.2 billion.

Despite its core businesses being vulnerable to the decline in the PC market, Microsoft’s stock has been on the rise on the back of positive earnings that beat analyst estimates this quarter. The search for CEO Steve Ballmer’s replacement has also supported the stock price increase. The company boasts of a robust revenue growth, low debt-to-equity ratio, an improved return on equity, and at the current valuation levels offers a good buying opportunity.

 

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Soros Fund Management was formerly a famed global macro hedge fund run by George Soros, a multi-billionaire investor, who is famous for betting against the British pound earlier in his career. The fund was started in 1969 and in 2010 was reported to be one of the most profitable hedge funds in history, earning over 20% annual returns over 40+ years. The firm formerly was the adviser to the famous Quantum group of funds, but now is private.

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