Billionaire George Soros’s Top 3 Canadian Stock Picks

What does ‘The Man Who Broke the Bank of England’ hold in his portfolio?

| More on:
The Motley Fool
You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

George Soros is known to many people these days for his politics, but his real claim to fame is his incredible investing talent. During the early 1990s, Soros made a fortune by betting against the British pound, earning himself the nickname, ‘The Man Who Broke the Bank of England’. And over the past four decades, his firm Soros Fund Management and the related Quantum funds have generated returns averaging over 20% annually.

So where is Soros putting his money now? According to the latest 13-F filings from the SEC, the billionaire hedge fund manager is looking north of the border. In the last quarter Soros initiated new positions or increased his stake in several prominent Canadian companies.

What stocks is he buying specifically? Let’s take a look.

Barrick Gold

After the plunge in the price for the yellow metal, Soros appears to be combing through the rubble in search of bargains. One miner that has caught his eye is Barrick Gold (TSX:ABX)(NYSE:ABX). Last quarter Soros purchased 6,300,100 shares of the troubled mining giant in a stake worth over $110 million in addition to over $35 million in call options.

Why is he bullish on Barrick? The company has several catalysts that could continue to propel the stock higher. Under the leadership of Chief Executive Jamie Sokalsky, Barrick is cutting costs, selling off high cost mines, trimming its debt load, and improving corporate governance.

The restructuring over the company could allow Barrick to generate an acceptable level of profits for shareholders by 2015 even in the low commodity price environment. And given that the stock trades at only seven time forward cash flow, the cheapest of its peers, we can infer that the market’s expectations are set incredibly low. Any bit of good news out of Barrick could continue to send the stock higher.


It’s difficult to see any reason to be bullish on the uranium market. Following Japan’s Fukushima disaster three years ago, uranium prices remain in the doldrums and most industry operators are bleeding money.

Yet this fact hasn’t discouraged Soros. Last quarter he added to his position in uranium mining giant Cameco (TSX:CCO)(NYSE:CCJ) by 42%. Today, Soro’s total stake is worth $55.4 million.

Why would anyone be bullish on the uranium market? Commodity expert Rick Rule told the Motley Fool Canada earlier this month that the uranium mining industry cannot recover its cost of capital at current commodity prices. That means either prices have to rise or the lights go out.

Today, low quality outfits are closing down projects and scaling back production. And this creates the very conditions needed for higher prices in the future. Once this situation plays out, higher quality operators like Cameco stand to make a fortune as they have the financial strength needed to weather the storm.

Suncor Energy

The oil sands have been off limits for a lot of investors on account of uncertainty over pipeline takeaway capacity and the low price for oil sands bitumen. But that does not appear to be a big concern for Soros. Last quarter he initiated a new position Suncor Energy (TSX:SU)(NYSE:SU) and his combined stake of common stock and call options is worth $56 million.

What is there to like about Suncor? Once again, this is an example of a company that is getting its act together. Under the leadership of Chief Executive Steve Williams, Suncor is scaling down expansion plans and choosing to return more capital to shareholders. Since taking the helm in September 2011, Suncor has almost doubled the size of its dividend and repurchased over $3.8 billion in stock. This common sense approach to capital allocation is exactly what shareholders want to see right now in this low commodity price environment.

Foolish bottom line

The lesson from these picks: it pays to be a contrarian. Many have put industries like gold mining, uranium and the oil sands on the investment backburner. But success in investing requires stepping up even when that’s the uncomfortable thing to do. And that appears to be exactly what Soros is doing here.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Robert Baillieul has no positions in any of the companies mentioned in this article.

More on Investing

Dots over the earth connecting the world
Dividend Stocks

3 of the Top-Growing Stocks on Earth

Market volatility remains high in Q3 2022, but it’s easy to identify the top-growing stocks on Earth.

Read more »

Profit dial turned up to maximum
Dividend Stocks

1 Undervalued Canadian Dividend Stock to Buy for TFSA Passive Income and Total Returns

This cheap Canadian energy stock provides an attractive dividend yield for TFSA passive income and a shot at some big…

Read more »

money cash dividends
Dividend Stocks

Want Passive Income? 1 TSX Stock for $8/Day in Dividends

If you need cash right away, then this TSX stock can make you passive income from a stable dividend that…

Read more »

edit Balloon shaped as a heart
Dividend Stocks

My 3 Favourite TSX Dividend Stocks Right Now

Canadian dividend stocks make for great long-term buy-and-hold investments.

Read more »

value for money
Dividend Stocks

3 Incredibly Cheap Dividend Stocks to Buy for Dependable Passive Income

Now is an excellent time to load up on Canadian dividend stocks. Here are top picks that are all trading…

Read more »

A close up image of Canadian $20 Dollar bills
Dividend Stocks

3 Simple TSX Stocks to Buy With $25 Right Now

Canadians with capital of as low as $25 can purchase three simple stocks right now and earn recurring passive income…

Read more »

edit Person using calculator next to charts and graphs
Dividend Stocks

2 No-Brainer U.S. Stocks for Investors in August

Here are two undervalued U.S. stocks to diversify your investment portfolio. They both pay safe and growing dividends!

Read more »

Tech Stocks

Got $300? 2 Simple TSX Stocks to Buy Right Now

Investing whatever little sum you have saved up as soon as possible is one of the best ways to keep…

Read more »