Vulnerable Stocks From Soros Fund Liquidation (ARX, BFLY, DNDN, EM, EXTR, HNR, IOC, MRCY, PLG, PWER, URS, VC, WPRT, AGRO)
George Soros is getting out of the hedge fund business. Oddly enough, the regulatory climate under Dodd-Frank and other new legislation are the major reasons cited more than his age. That seems odd considering he has been such a huge Democratic supporter. He will still continue to manage his family assets, which are in the billions and billions, but 24/7 Wall St. went through the most recent 13F filing for his Soros Fund Management LLC filed back on May 16 to see which positions may be vulnerable when the fund begins liquidating.
The list we compiled includes instances where there was a substantial percentage holding of the company or where the total number of shares was multiple days worth of trading volume. We do want to note that the returned capital is actually small in comparison to the total Soros holdings.
Some of the stocks which we identified as being vulnerable to Soros selling are as follows:
Aeroflex Holding Corp. (NYSE: ARX) was listed as being some $29.399 million on the 1,614,436 shares. This is big considering that the average volume is only 221,000 shares for this $1.2 billion company.
Bluefly Inc. (NASDAQ: BFLY) has been a long-standing position of Soros personally and in his funds. The 13F filing shows some 5.924 million shares worth $17.6 million. Unfortunately, the market cap is only about $68 million and this stock literally trades only a few thousand shares each day.
Dendreon Corporation (NASDAQ: DNDN) is a dual position with 4.67 million shares worth $174.8 million, but there is also a senior convertible note position worth $18 million. Dendreon trades about 2.7 million shares on average now and its market cap is about $5.6 billion.
Emdeon Inc. (NYSE: EM), in revenue and payment cycle management solutions, could be vulnerable to a Soros sell-off as the 13F shows that some $115 million is held in 7,152,018 shares. Average volume is only about 120,000 shares a day and the market cap is $1.2 billion.
Extreme Networks Inc. (NASDAQ: EXTR) used to be called a poor man’s Cisco and now the Soros punch-out could hurt. The 13F showed more than 8.8 million shares worth some $30.96 million versus an average daily volume of just over 500,000 shares and versus a market cap of about $325 million.
Harvest Natural Resources Inc. (NYSE: HNR), an independent energy company, could also be at risk here. The Soros 13F shows 2.4 million shares of common stock worth $36.6 million and also a $1.5 million position from 100,000 shares. The market cap is $460 million and average volume is only 660,000 shares per day.
InterOil Corporation (NYSE: IOC) is a large position for a decent sized company. The Soros 13F shows two positions of just over 4 million shares worth $302 million and another 500,000 shares controlled via call options that would have a leveraged value of over $37 million. The market cap is almost $3 billion and average volume is just under 500,000 shares.
Mercury Computer Systems, Inc. (NASDAQ: MRCY) is another vulnerable one as the 13F shows 1.666 million shares worth more than $35 million versus a $530 million market cap and with only 162,000 shares per day on average. 10 days of volume? Ouch.
Platinum Group Metals Ltd. (AMEX: PLG) may be vulnerable too. The 13F shows some 8.42 million shares worth almost $16.5 million. The average volume is only about 207,000 shares and the market cap os $320 million.
Power-One Inc. (NASDAQ: PWER) is listed in the Soros 13F as being some 2.835 million shares worth $24.8 million. This has a market cap of $739 million but it trades only about 2.7 million shares a day.
URS Corporation (NYSE: URS), the engineering services outfit, is listed as 1.09 million shares worth some $50 million. That is not huge on market cap comparisons as that company is worth $3.4 billion, but average volume is only about 538,000 shares.
Visteon Corp. (NYSE: VC) is listed in the 13F as being 2.134 million shares worth $133.3 million, but the market cap here is $3.4 billion and the average volume is almost 600,000 shares. Not much on market cap, but more than 3-days worth of volume.
Westport Innovations Inc. (NASDAQ: WPRT) is the alternative engine company for trucks. The Soros 13F shows over 5.54 million shares worth $121.9 million. The market cap is $1.27 billion, but the average volume is about 800,000 shares per day. The 13F also controls another 33,000 shares via call options.
The last big position was Adecoagro S.A. (NYSE: AGRO), listed as being a position of over 27.1 million ADRs worth about $366 million. The market cap is listed as $1.42 billion and the ADR trades only about 220,000 shares per day.
Keep in mind that 13F filings have a great lag for funds like Soros and others. These positions were all filed on May 16 but for the March 31 holding period. The Soros outfit is also going to continue managing the billions and billions in family assets and it seems as though many of these positions could easily be held onto in some form or fashion. That implies that some of these sales may not occur in the scale that the filings indicate as this is no forced liquidation scenario.
It is never fun to mention, but this is a day that was always coming. Soros is over 80 now and he has not had to be involved in the markets to pay his bills for many years.
JON C. OGG