Google Inc (GOOG), Cliffs Natural and LVS Are Among Billionaire Ray Dalio’s New Stock Picks

 BRIDGEWATER ASSOCIATESGoogle Inc (NASDAQ:GOOG), Cliffs Natural Resources Inc (NYSE:CLF), and Las Vegas Sands Corp (NYSE:LVS) are among billionaire Ray Dalio’s new stock picks during the second quarter. Bridgewater Associates, one of the world’s largest hedge funds yet still able to return 23% last year, primarily focuses on more macro-oriented investments but invests in individual equities as well. Many of these positions are disclosed on the fund’s 13F filing about six weeks after the end of each quarter (see what stocks Bridgewater Associates likes). According to the fund’s filing for the second quarter, here are some of the largest new stock positions that Ray Dalio and his team initiated between April and June 2012:

The fund bought about 250,000 shares of Cliffs Natural Resources (NYSE:CLF), a mining company that has been hit hard by low demand for iron ore and metallurgical coal: its stock is down 54% since a year ago. By this point, however, the company only needs to stop the bleeding in order to prove a good value investment. It trades at 4 times trailing earnings, and Wall Street analysts’ projections imply a forward P/E of 5. The company also increased its dividend recently and now offers a high dividend yield going forward unless continued sluggishness in the business forces them to cut it back. Apparently Bridgewater is confident that the industry will not continue to deteriorate, and that Cliffs is thus a good value. Carlson Capital owned a small number of shares in the company at the end of March and increased its stake to 1 million shares over the course of the quarter.

Bridgewater also initiated a position in Las Vegas Sands (NYSE:LVS), buying about 270,000 shares. Las Vegas Sands owns several casinos across Las Vegas, Macau, and Singapore. It too has struggled recently: earnings dropped 41% last quarter compared to the same period in 2011 and the stock is down 11% from a year ago against a rising market. By buying in Bridgewater is signaling some degree of confidence in U.S. and Chinese macro. In this they are in agreement with the sell-side, whose earnings estimates turn a trailing P/E of 25 into a forward multiple of 16 and a five-year PEG ratio of 0.9. Fellow billionaire Ken Fisher’s Fisher Management was another buyer of the stock during the second quarter.

The third largest new company stake in Bridgewater’s portfolio according to the filing was about 210,000 shares of Honeywell. The diversified industrial company produces aerospace components, environmental controls, and performance materials. Honeywell’s stock price is up this year, but has underperformed the market despite good numbers in its last quarter (revenue rose 4% and earnings increased 11% compared to the same quarter the previous year). This, like Las Vegas Sands, is another company where Bridgewater and Wall Street analysts are on the same page: not a good value today (trailing P/E of 20) but with strong growth ahead of it (forward P/E of 12, five-year PEG of 1).

Technology giant Google Inc (NASDAQ:GOOG) was another new stock pick for Bridgewater. The fund only bought about 20,000 shares for a position worth over $11 million. Google trades at 20 times trailing earnings but only 14 times forward earnings estimates, as analysts expect it to continue its strong growth. Earnings were up 11% last quarter compared to a year ago despite Google’s size, and it has further growth prospects in tablets and smartphones. The stock was trading down this year until recently, and is still about flat for the year compared to a rising NASDAQ. Google Inc (NASDAQ:GOOG) also ranked in our ten most popular stocks among hedge funds for the second quarter.

Bridgewater’s new stock positions, with the exception of Cliffs Natural Resources (NYSE:CLF), seem to be based on thinking that optimistic sell-side earnings estimates are right and the wary market is wrong. Cliffs, in turn, is the fund trying to catch a falling knife: the iron ore and metallurgical coal industries are down but probably not going to get much worse, and as long as they don’t the stock is a buy based on its valuation.

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. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

Picture Perfect: The 6 Smartphones with the Best Cameras

The 10 Best Countries To Work In the World

A Profitable Day At The Track: 5 Tips For Betting On Horses

Tearing You Apart: 6 Bad Habits That Ruin Relationships

Learning on the Job: The 6 Biggest Mistakes Parents Make

Shopaholics Rejoice: The 12 Biggest Malls in the World

Fright Night: 10 Horror Movies Based on True Stories

Mach Mania: The 10 Fastest Jets in the World

Military Heavyweights: The 10 Countries with the Most Tanks

All In: The 7 Richest Poker Players in the World

Abracadabra: The 10 Best Magicians in the World

The 10 Richest Asian Countries in the World in 2014

Eyes in the Sky: 10 Things You Need to Know About Drones

Rising Stars: The 6 Best Silicon Valley Startups

Military Muscle: The 5 Most Advanced Armies in South America

All that Glitters: The 7 Most Luxurious Jewelry Brands in the World

5 Things You Didn’t Know About ISIS but Should

Empowering Your Money: The 5 Best Energy Stocks to Invest In

The 11 Best Android Apps You Can’t Get on iOS

The 10 Most Important International Conflicts in 2014

Mood Enhancers: The 20 Most Uplifting Songs of all Time

Lover Beware: The 8 Countries that Cheat the Most

Breath of Fresh Air: The 25 Countries with the Best Air Quality on the Planet

Singles Beware: The 8 Worst Mistakes Made on First Dates

Healthy and Happy: The 10 Countries with Lowest Healthcare Costs

The 6 Best Company Team Building Activities to Build Workplace Camaraderie

Ships Ahoy: The 10 Busiest Shipping Ports in the World

10 Productivity Tips to Save You Time and Help You Do More With Less

Grab a Bite: The Most Popular Fast Food Restaurants in America

Friday Night Thirst: The 10 Most Popular Cocktails in the World

The 6 Greatest Unsolved Mysteries We May Never Figure Out

7 Useless Products You Never Should’ve Bought

The 5 Reasons Why You’re Single and Miserable

The 7 Most Addictive Foods in the World We Can’t Stop Eating (Even Though We Should)

5 Amazing Places You Can Swim with Dolphins

The Top 7 Most Livable Countries In The World

The 10 Most Expensive Baseball Cards Ever Pulled From A Pack

The 5 Easiest Second Languages to Learn for English Speakers

Silver Spoon: The 6 Richest Families in the World

The 20 Countries with the Largest Prison Populations in the World

The Top 10 Richest Actors in the World

The 10 Best Airline Stocks to Invest In Before They Fly Too High

Burger Kings: The 10 Most Expensive Burgers in the World

The 10 Most Ethnically Diverse Countries in the World

The 10 Most Exclusive Credit Cards in the World

The 10 Most Expensive Cruise Ships in the World

The 10 Fastest Supercomputers in the World

The 10 Best Countries for Doing Business 2015

6 Most Expensive Fruits In The World

10 Worst Airlines in the World

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!