Why You Should Pay Attention To These Small-Cap Picks of Billionaire Ray Dalio

A new pick of Dalio’s during the quarter was electronics company Cree, Inc. (NASDAQ:CREE), in which Bridgewater opened a stake of 239,237 shares with a value of $8.50 million. North Carolina-based Cree is a market-leading innovator of LED, lighting and semiconductor products for radio and power applications. However, with a decline in its share price by 7.4% year-to-date and 23.11% for the last three months, the stock hasn’t exactly lived up to expectations. The earnings posted for the first quarter were a disappointment, with earnings per share of $0.09 not meeting analysts’ expectations of $0.11. For the second quarter, ending on June 30, analysts are expecting earnings of $0.14 per share, while giving the stock a consensus rating of “Hold”, and a target price of $33.25, suggesting moderate potential upside of more than 10%. Investors have yet to have much reaction to Cree, Inc. (NASDAQ:CREE)’s announced spin-off of its Power and RF divisions, announced in mid-May, though that will undoubtedly drive sentiment going forward. A new stake in Cree was also built by Catapult Capital Management, a subsidiary of Israel Englander’s Millennium Management, which  acquired 38,707 shares during the first quarter.

Another small-cap in which Bridgewater showed interest was in mining machinery producer Joy Global Inc. (NYSE:JOY). Bridgewater increased its stake by 89% to 274,096 shares with a value of $10.74 million during the first quarter. Joy Global, headquartered in Milwaukee, Wisconsin, has experienced a bumpy spring on the stock exchange, like Dalio’s other top small-cap picks, with shares down by 14.7% year-to-date. Earnings for the company’s fiscal second quarter of 2015 were released on Thursday with Joy Global posting earnings per share of $0.40 compared to $0.73 for the same quarter the year before, negatively impacted by declining commodity prices and high supply. Furthermore, Joy Global Inc. (NYSE:JOY) expects the tendency to continue throughout the year, with declining sales and earnings. Together with the posting of the second quarter earnings, Joy Global also announced the acquisition of a hard rock producer that is, according to Joy Global “A complete breakthrough for our customers with unparalleled direct service, technology, quality and safety expertise.” Also bullish about Joy Global is hedge fund Adage Capital Management, led by Phill Gross and Robert Atchinson, which increased its stake by 502% to 907,203 shares during the first quarter.

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