Insider Monkey tracks quarterly 13F filings from hundreds of hedge funds, including billionaire Ray Dalio’s huge hedge fund Bridgewater Associates, and Microsoft Corporation (NASDAQ:MSFT) is a regular player. We’ve found that the information in these filings can be useful in developing investment strategies; for example, the most popular small cap stocks among hedge funds earn an average excess return of 18 percentage points per year (learn more about our small cap strategy). We can also go through our database of filings and see which stocks individual funds have owned over the long term. Read on for our thoughts on the three largest positions in Bridgewater’s portfolio in its most recent 13F which the fund also had at least $15 million invested in at the end of March 2011 (or see the full list of Dalio’s stock picks over time).
The fund has long had Microsoft Corporation (NASDAQ:MSFT) as one of its top picks and owned1.4 million shares at the end of the first quarter of 2013. Microsoft Corporation (NASDAQ:MSFT)’s fiscal year ended in June, with the company earning $2.58 per share for the year. The company’s report, which included a significant earnings miss, disappointed the market, sending the stock down after what had been a very strong H1 performance. That earnings per share figure means that Microsoft now trades at 12 times trailing earnings.
For many companies that would be cheap enough to consider the stock a potential value, but in Microsoft Corporation (NASDAQ:MSFT)’s case investors should be concerned about the stability of current business- earnings were likely boosted by the release of Windows 8. Wall Street analysts expect EPS to rise slightly in the current fiscal year, with a P/E multiple of 11 on that basis, but that still might be enough to tip the stock into being a buy recommendation. Following the dip in its stock price, Microsoft Corporation (NASDAQ:MSFT)’s dividend yield is now close to 3%. Billionaire Ken Fisher’s Fisher Asset Management had over 17 million shares in its portfolio at the beginning of April (find Fisher’s favorite stocks).
Another large technology company Bridgewater has liked over the last couple years is Oracle Corporation (NYSE:ORCL). Oracle’s revenue was flat in its last fiscal year (which ended in May) compared to the previous one, with growth in software offsetting declines in the smaller hardware and services portions of its business. Operating and net income were up slightly on lower costs, though special items also contributed. As with Microsoft Corporation (NASDAQ:MSFT), Oracle Corporation (NYSE:ORCL)’s trailing earnings multiple is moderately low at 14 and with the company using a large share of its cash flow from operations on buybacks it might be worth doing further research on the company.