The latest 13F regulatory disclosure of hedge fund managers recently came out for this year’s first quarter, and, as usual, the buying and selling of the world’s leading investors has generated a lot of media attention and online commentary. Chief among them is George Soros, the billionaire investing legend who famously made $1 billion shorting the British pound currency in the early 1990s. Although he is now age 92, it is reported that Soros continues to be an active investor through Soros Fund Management, a former hedge fund that is today structured as a family office. Founded in 1970, Soros Fund Management continues to be one of the most successful investment firms in the world, averaging a 20% annual return over more than 50 years. So what does George Soros know that you don’t? Here are three stocks the billionaire loves.
George Soros Stock Picks: Estee Lauder (EL)
One of the positions that Soros Fund Management increased the most during Q1 of this year was in the cosmetics company Estee Lauder (NYSE:EL). Soros raised his stake in EL stock by more than 40%, bringing his current position to 159,100 shares worth a total of $39.2 million. Soros Fund bought Estee Lauder shares as they have fallen throughout this year. So far in 2023, the company’s share price has sunk 21%. Clearly, Soros and his firm have seen the decline in Estee Lauder stock as a buying opportunity.
Estee Lauder has struggled with Covid-19 lockdowns in China and has seen its global sales slump throughout Asia. Consequently, the company recently lowered its 2023 sales guidance, saying it now expects its fiscal 2023 sales to decline in a range of 10% to 12%, which is much worse than previous guidance for sales to drop 5% to 7% this year. The lowered guidance came as Estee Lauder reported an earnings per share decline of 75% in its most recent quarter. Soros though seems to be betting that the decline in EL stock won’t last long. Thus, it is among the top George Soros stock picks.
Another stock that Soros Fund seems to have liked as its share price has slumped is the sneaker and athletic apparel maker Nike (NYSE:NKE). The fund nearly tripled its position in NKE stock to 166,720 shares in Q1. The fund’s stake in Nike is currently worth $19.1 million. Year to date, Nike’s share price is down 3%. The stock is now 35% below the peak it reached in November 2021. Soros seems to be betting that a turnaround in NKE stock is coming.
Over the past 18 months, Nike’s stock has been hurt by excessive inventory levels and slumping sales in Asia, notably China. However, despite those issues, the company has managed to continue to report better-than-expected earnings, boosted by strong sales in North America. Nike has telegraphed that its inventory levels have been coming down substantially and there is an expectation of a turnaround in Asia now that China has ended its Covid-19 policies. NKE stock could pop when the company next reports earnings on June 26. That’s a great reason why I regard NKE as one of the best George Soros stock picks.
Talking of George Soros stock picks, he opened a new position in streaming giant Netflix (NASDAQ:NFLX) during Q1. The fund invested $12 million to buy 35,000 shares of NFLX stock. This was one of only a handful of new positions Soros Fund opened during the quarter, including new stakes in discount retailer Walmart (NYSE:WMT), and Chinese e-commerce company JD.com (NASDAQ:JD). The new position in NFLX stock is interesting in that Soros bought it as the share price rose. So far this year, Netflix’s share price has gained 25% and has nearly doubled in the past 12 months.
Like many investors, Soros may be convinced that Netflix is again on a path to growth and higher profits after cutting back its production budget on new movies and TV shows last year, cracking down on password sharing worldwide, and introducing advertising to the streaming platform. Those changes seem to have had a positive impact on Netflix’s earnings and led to a turnaround in NFLX stock since last spring when it looked, briefly, like the company’s best days were behind it.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.