Saturday, May 16, 2009

Soros Cuts Petrobras, Picks up Retail and Nuclear

The fund filings are out. If you're wondering, these are the funds I like to track, and sometimes follow by buying the same stocks:

-George Soros (Soros Fund Management)
-Seth Klarman (Baupost Group)
-John Paulson (Paulson & CO.)
-Warren Buffett (Berkshire Hathaway)
-David Einhorn (Greenlight Capital)
-Bill Ackman (Pershing Square Capital Management)
-Steve Cohen (SAC Capital Advisors)

Today, I'm going to take a quick look at Soros' holdings.

Soros Fund Management LLC, the investor’s hedge-fund firm, sold 5 million U.S. shares of Petrobras, as the Brazilian company is known, according to a filing today with the U.S. Securities and Exchange Commission. The New York-based firm’s remaining 32 million shares of the state-controlled oil company were valued at $963 million at the end of the quarter.

The hedge fund also held 5.6 million shares of Saskatoon, Saskatchewan-based Potash at the end of the quarter, compared with 5.9 million shares as of Dec. 31.

Soros bought 9.28 million shares of Macy’s Inc., the second-biggest U.S. department-store chain, bringing its holding to 9.85 million shares. The firm added 4.26 million shares of Lowe’s Cos., the second-largest home-improvement retailer, bringing its investment to 5.36 million shares.

Soros also added 1.35 million shares of Wal-Mart Stores Inc., the world’s largest retailer, lifting his stake to 1.82 million shares of the Bentonville, Arkansas-based firm.

Soros also bought 968,000 shares of Entergy Corp., the second-largest U.S. operator of nuclear power plants, and 3.59 million shares of Houston-based Plains Exploration & Production Co. in the first quarter. Soros sold off its stake in Schlumberger Ltd., the world’s largest oilfield-services provider, and U.S. coal producer Consol Energy Inc.

My take on his holdings/moves:

I was surprised he owned that much Petrobras to begin with. The long-term outlook is great for them, but they need oil prices to be higher to be very profitable (much of their reserves are deep offshore and will require high costs to extract). Overall, a stock I like though.

I'm not surprised he bought retail. With the consumer in trouble, these many of these stocks were flat out cheap (especially in early March, when he was probably buying).

I'm most intrigued with him picking up a stake in Entergy (ETR). They are the second largest producer of Nuclear power in the U.S. They just reported an okay quarter. The numbers were down, but they reaffirmed '09 guidance. They don't serve a lot of industrial clients which has helped them from being hit too hard by the recession. I do like the idea of buying into nuclear a bit. There is a lot of pressure coming down soon on carbon-burning plants with the talk of cap-and-trade, or something like it coming. Nuclear might benefit, even if it just means people moving their money out of the other stocks and into these.

I like their chart too. I'm not a professional with technical analysis, but one of the indicators I watch fairly close are the moving averages and volume. The 20 day EMA just crossed over the 50 day EMA and was supported by strong volume. This is typically a bullish sign. This was largely due to the pop after earnings, so I don't want to read too far into it, but it could be a positive. I'm going to watch this stock, and might be interested in taking a position.

Disclosure: None

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