2016 was again a dismal year for the hedge fund industry, with a lot of hedge funds failing to beat the benchmark and some trailing it by a huge margin. Among the funds that performed well last year, most of them are tried and tested titans of the industry with a track record spanning decades. According to a research report published by LCH Investments NV, Bridgewater Associates – which leads the list of the 140 Biggest and Most Famous Activist Hedge Funds in the world in terms of assets under management – managed to beat all of its competitors in absolute terms by earning $4.9 billion for its clients in 2016.
Founded by billionaire Ray Dalio in 1975, Bridgewater is an investment behemoth with over 1,500 employees and $212.28 billion in regulatory assets under management as of August 23, 2016. The mega-hedge fund recently submitted its 13F filing for the quarter ending December 31. According to the filing, Bridgewater’s U.S equity portfolio was worth $10.528 billion at the end of 2016 and its top-10 stock picks amassed over 80% of the value of its portfolio. In this article we’ll take a look at five major moves the fund made during the October-December period and will discuss how those stocks have been performing recently.
We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively the most bullish on. Over the past year, this strategy generated returns of 39.7%, topping the 24.1% gain registered by S&P 500 ETFs. Insider Monkey’s enhanced small-cap strategy registered gains of more than 45% over the last 12 months and outperformed SPY by more than 30 percentage points in the last 4.5 years (see the details here).
Companies in Which Bridgewater Associates Sold Off its Entire Stake During Q4
Bristol-Myers Squibb Co (NYSE:BMY)
Bristol-Myers Squibb Co (NYSE:BMY) had been a part of Bridgewater’s portfolio since the third quarter of 2015, with the fund holding 390,577 shares of the company at the end of last September. Bristol-Myers Squibb Co (NYSE:BMY)’s stock ended the fourth quarter up by 8.38%. However, it has given back all of those gains in 2017 and is currently trading down by 8.09% year-to-date. At present, Bristol-Myers pays a quarterly dividend of $0.39 per share, which translates into a forward yield of 2.90%. On February 14, StreetInsider reported that Bristol-Myers could be a potential takeover target of three major pharma companies – Roche Holdings, Novartis (NYSE:NVS) and Pfizer (NYSE:PFE). Additionally, the report also mentioned that Gilead Sciences (NASDAQ:GILD) could be a potential buyer.
Rogers Communications Inc. (USA) (NYSE:RCI)
Considering that Rogers Communications Inc. (USA) (NYSE:RCI) is currently trading up by over 11% year-to-date and has managed to recoup all the losses it suffered during the fourth quarter, it seems Bridgewater made a mistake by selling its holding in the company during the fourth quarter. Rogers Communications Inc. (USA) (NYSE:RCI) had been a part of Bridgewater’s portfolio from the fourth quarter of 2014 through the fourth quarter of 2016, a period in which its stock went nowhere. However, the fund would have made some money from the quarterly dividend the company pays, which at present stands at $0.37 per share and translates into an attractive annual dividend yield of 3.42%. On January 27, analysts at Canaccord Genuity upgraded the stock to ‘Buy’ from ‘Hold’.
We’ll check out three other moves made by Bridgewater Associates during Q4 on the next page.