on Oct. 5 reduced a position in Exar Corp. (
) that he built up through numerous transactions from the second
quarter of 2009 through the first half of 2011. Soros reduced his
Exar position of 6,666,666 shares by 4.5%, or 300,000 shares, at
an average price of $8.40, according to
GuruFocus Real Time Picks
. He owns a remaining 6,366,666 shares after the sale.
Soros made an approximate 26.5% profit on the average price he
paid. Exar stock has gained more than 30% over the last year.
Exar, a semiconductor company, designs, develops and markets
analog and mixed-signal integrated circuits for use in
communications, video and imaging products. It is a world leader
in power management technologies for a variety of end markets,
and market leader in connectivity with the industry's broadest
portfolio of the computer hardware universal asynchronous
receiver/transmitter (UART) and serial protocol transceivers.
Exar has a market cap of $384 million; its shares were traded
around $7.94, with a P/S ratio of 2.9.
When Soros first bought the stock, the company was suffering from
a market downturn and had a net loss of $196 million in 2008,
after reporting profits for the four prior years. Its net losses
have lessened each consecutive year since then, but it has not
returned to a profit.
When Soros initiated the position in the second quarter, the
company had been reducing operating expenses for eight
consecutive quarters and acquired Hifn, a semiconductor
manufacturer, to broaden its product offerings in expanding
datacom and storage markets.
Exar has not posted a positive quarter in the last year, though
it lost the least in its fiscal 2013 first quarter ended July 1,
2012. It reported for that quarter a net loss of $0.6 million,
compared to a net loss of $21.6 million the previous quarter and
$1.4 million the same quarter the previous year. Revenue
increased to $29.3 million, compared to $27.8 million the
previous quarter, primarily due to growth in its Datacom and
Storage and Communications product lines. It was down from $37
million the same quarter the previous year.
At the end of the quarter, Exar had $10.2 million in cash on its
balance sheet, increased from $8.7 million the previous year, and
about $9.7 million in long-term liabilities and debt.
Exar's bookings also increased 22% from the previous quarter, but
weak macroeconomic conditions and its dependence on distribution
sell-through caused it to express caution about the September
Soros primarily analyzes global trends to make investments.
Global semiconductor sales are currently down 3.2% for August on
a three-month rolling average over last year, according to
Semiconductor Industry Association. Year to date, sales have
declined 4.6% over the same time last year, with declines in all
regions. On a sequential monthly basis, sales in the Americas
increased (1%) for the first time since April 2012, and Japan was
the only other region to increase (1%) month-over-month.
"Global semiconductor sales have held steady in recent months
despite strong macroeconomic headwinds, but these challenges have
hampered growth," said Brian Toohey, president and CEO,
Semiconductor Industry Association.
In July, the industry projected modest growth for the remainder
Exar is the 18
largest holding in Soros' portfolio of 151 stocks, and comprises
0.78% of his portfolio. His largest holdings are Walmart Stores
), Adecoagro SA (
) and General Electric Company (
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