Billionaire Ray Dalio’s Trades for Q2 Include Buying Oracle Corporation (ORCL)

Billionaire Ray Dalio’s Bridgewater Associates is one of the largest hedge funds in the world, with assets under management of over $100 billion. The fund recently filed its 13F with the SEC, disclosing many of its long equity positions as of the end of March. We have found that 13Fs can be useful to investors, even with the included information being a little old: the most popular small cap stocks among hedge funds, we have found, earn an average excess return of 18 percentage points per year (learn more about our small cap strategy). Of course, it’s also potentially useful to see what top managers are thinking in general. We have gone through the filing and compared it to previous reports from Bridgewater (see Dalio’s stock picks over time) and here are three big moves that the fund made in its portfolio during the first quarter of 2013:

Tech giants. The three largest single-stock holdings in Dalio’s portfolio at the end of March were Microsoft Corporation (NASDAQ:MSFT), Oracle Corporation (NASDAQ:ORCL), and Intel Corporation (NASDAQ:INTC) – tech companies with market caps of over $100 billion in each case. These businesses have had a range of reactions to the decline of the PC. Intel Corporation (NASDAQ:INTC) is currently in the worst shape, with net income falling 25% last quarter compared to the first quarter of 2012, though we can’t imagine the continuation of this trend being good for Microsoft Corporation (NASDAQ:MSFT) either (currently that company’s revenue and earnings are up, but it’s possible that that is due to the release of Windows 8 giving a temporary boost to the business). All three companies’ forward earnings multiples are in the 11-12 range. In Oracle Corporation (NASDAQ:ORCL)’s case this does represent a significant increase in earnings per share, even though the enterprise software company’s numbers have been about flat. Microsoft and Oracle Corporation (NASDAQ:ORCL) had made our list of the most popular tech stocks among hedge funds for the fourth quarter of 2012 (find more tech stocks hedge funds loved).

BRIDGEWATER ASSOCIATESDumping Apollo. At the beginning of this year, Bridgewater owned 1.8 million shares of Apollo Group Inc (NASDAQ:APOL) but the fund closed its position in the for-profit education company between January and March. Apollo Group Inc (NASDAQ:APOL)’s stock price is down 41% in the last year as society’s skepticism about the benefits of for-profit education increase- which may not only hurt business directly, but may also lead to changes in the student lending programs which currently serve as a major source of funding for the industry. Earnings were down almost 80% in the most recent quarter (which ended in February) compared to the same period in the previous fiscal year. Wall Street analysts are somewhat optimistic, and as a result the forward P/E is 9, but many investors actually find Apollo overvalued with 21% of the float held short.

Lockheed Martin. After a number of tech companies- including those we’ve mentioned and EMC- the largest single-stock holding in the fund’s portfolio was its roughly 220,000 shares of Lockheed Martin Corporation (NYSE:LMT). The company recently reported an increase in earnings compared to the first quarter of 2012, but revenue was down slightly and there is a good deal of speculation that the business will be impacted by cuts in U.S. military spending. The trailing P/E of 12 is just a bit higher than what we see at other aerospace and defense companies. Billionaire Ken Griffin’s Citadel Investment Group reported a position of 1.2 million shares at the end of December (check out Griffin’s stock picks). Lockheed Martin pays a dividend yield of 4.5% at current prices and dividend levels.

Lockheed Martin Corporation (NYSE:LMT) might not be the best value in the aerospace industry, however, and so even with the yield it might be better to check out the company’s peers. Microsoft and Intel are potential value plays, we suppose, but we are skeptical that these companies will be able to maintain their current business going forward and with earnings multiples above 10 we wouldn’t call them “extremely” cheap; in Oracle Corporation (NASDAQ:ORCL)’s case, we think that we’d have to wait to see the company’s earnings actually growing before buying at these prices. For profit education, including Apollo, certainly looks cheap but has all of the components of a classic value trap and so we’d tread carefully when evaluating the company’s financials.

Disclosure: I own no shares of any stocks mentioned in this article.

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 5 Most OP Characters in League of Legends to Carry Games and Crush Foes With

The 5 Best Foods to Eat Before Running that Will Help You Pound the Pavement

10 Glaring Plot Holes in The Walking Dead that a Zombie-Filled Bus Could Drive Through

The 5 Biggest Celebrity Stoners Who Love Their Reefer

The 10 Most Overrated Movies Of All Time by Out-of-Touch Critics

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

How to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

5 Most Valuable Brands in China

The 10 States with Highest Substance Abuse Rates Crippling Their Populace

The Top 10 Things to Do Before You Die That Will Echo for Eternity

The 10 Best Selling Items on Etsy

Top 10 Things to Do in Tokyo, the Greatest City in the World

10 Mistakes on Social Media that Can Harm You and Will Probably Get You Canned

The 10 Best Cities to Find Jobs in 2014

The 10 Most Controversial Songs Of All Time to Hit (and get Banned from) the Airwaves

The 20 Biggest IPOs in US History

The 10 Best Places to Visit in Mexico that Are Beautiful and Safe

7 Bad Habits that Age You Beyond Your Years

The 40 Best Fortune Cookie Sayings That Will Leave You Bemused, Befuddled, or Beguiled

10 Foods to Eat Before a Workout to Make Every Drop of Sweat Count

The 5 Best Documentaries On Netflix You Must See

The Most Heartwarming and Inspirational Story Of This Halloween Season, It Will Make You Cry and Jump For Joy

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!