May 20, 2022
When investing legend George Soros makes a move, the market takes notice. And he has definitely made some eye-opening moves of late.
According to the latest 13F filing from Soros Fund Management, the billionaire financier’s family office sold 3,680 shares of Amazon (AMZN) in Q1 of 2022, reducing his stake in the e-commerce giant by 5%.
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At the same time, the fund slashed its positions in food service company Aramark (ARMK) by 33%.
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But Soros also made several purchases during the quarter — including two that have been absolutely crushed in recent months.
Here’s a look at the contrarian duo.
Rivian Automotive (RIVN)
Electric vehicle stocks are some of the most volatile names in the market. Take Tesla: its shares are up 880% over the past five years, but down 47% in 2022.
And smaller EV names like Rivian Automotive can experience even wilder swings.
Rivian went public in November 2021 at an IPO price of $78. On the first day of trading, shares closed at $100.73 and reached a high of $179.47 later that month. But parabolic runs don’t last forever. At the time of this writing, Rivian shares trade at around $27.60 apiece, down 84% from those November highs.
Soros sees an opportunity in the beaten-down shares. He backed up the truck on Rivian in Q1, buying call options on 6.05 million shares during the quarter. Considering that Soros already had 19.84 million shares of the company that he bought in Q4, Rivian is by far the largest holding of Soros Fund Management.
Compared to other automakers, Rivian is still very much a growth play. As of May 2022, Rivian has produced around 5,000 EVs since the start of production.
Soros isn’t the only one who sees long-term potential in Rivian.
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On May 17, Morgan Stanley analyst Adam Jonas reiterated an overweight rating on Rivian and set a price target of $60 — more than 100% above where the stock sits today.
More: High Yield Dividend Stocks that Beat Inflation
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Salesforce (CRM)
Salesforce is a cloud-based software giant. More than 150,000 companies use its customer relationship management platform to scale their business.
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In Q1, Soros’ fund bought 106,250 shares of Salesforce, boosting its stake in the company by 68% to 263,300 shares.
Cloud computing is a booming industry, and Salesforce’s numbers completely reflect that.
In the company’s most recent quarter, revenue surged 26% year over year to $7.3 billion. Management also issued upbeat guidance: It now expects full-year 2023 revenue of $32 billion, marking a year-over-year increase of 21%.
But the stock is down a staggering 39% in 2022, giving contrarian traders something to think about.
Earlier this week, Mizuho analyst Gregg Moskowitz reiterated a ‘buy’ rating on Salesforce. His price target of $225 implies a potential upside of more than 43%.
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Jing is an investment reporter for Moneywise. He is an avid advocate of investing for passive income. Despite the ups and downs he’s been through with the markets, Jing believes that you can generate a steadily increasing income stream by investing in high quality companies.
