8. Kellogg Company (NYSE:K)
Dalio added 171,336 new shares of Kellogg Co. (NYSE:K) to his 13F portfolio during Q3, establishing a position worth $11 million. Kellogg’s is an American multinational food manufacturing company, popular for its cereal brands. The stock has seen fluctuating hedge fund sentiment throughout the year. The number of long positions in the stock increased by 23% during Q1. For example, Diamond Hill Capital, in its Q1 2020 Investor letter, highlighted Kellogg’s and their reasoning for investing in the stock:
“We initiated a position in Kellogg Co. which is the global leader in cereal across both the developed and developing world and a powerhouse in snacking with many recognizable brands such as Poptarts, RxBar, Cheez-Its, and Pringles.”
However, the mood changed during Q2, when hedge funds positions were reduced by 4 to 33 at the end of June. Year-to-date, the stock has a return of about -4% (through December 2nd), compared to the market’s return of 14.5%. Nonetheless, Kellogg’s investors value the company’s stability and consistency, as its Board of Directors announced in October a quarterly dividend of $0.57 per share of common stock (dividend yield of 3.6%). Kellogg’s trailing P/E is only 18. Once investors feel more confident about the pandemic and realize that it doesn’t make sense to buy bonds, they will flock into relatively cheaper dividend stocks like K.
7. Archer-Daniels-Midland Co. (NYSE:ADM)
286,909 shares of Archer-Daniels-Midland Co. (NYSE:ADM) were added to Bridgewater’s 13F portfolio during Q4, valued at $12.5 million. ADM is another American multinational in the food industry in which Dalio established a new position. At the end of Q3, ADM was in the portfolios of 26 hedge funds tracked by Insider Monkey, down by 2 from the previous quarter.
Besides Bridgewater, Diamond Hill Capital is another fund that sees potential in ADM’s future growth. The latter currently has the largest stake in ADM, worth $220.3 million at the end of Q3. Diamond Hill Capital has been hopeful about ADM since the beginning of the year, as they mentioned in their Q1 2020 investor letter:
“Agricultural commodities producer Archer-Daniels-Midland Co. outperformed after reporting solid quarterly results. The company benefited from the renewal of the biodiesel tax credit, as well as continued growth in its nutrition business. The company has heavy exposure to agriculture and basic food products and tends to perform well in times of market turbulence.”
ADM has a trailing P/E of 18 and has a 2.9% dividend yield.
6. Boston Scientific Corporation (NYSE:BSX)
We continue with Boston Scientific Corporation (NYSE:BSX), another new addition to Bridgewater’s 13F portfolio, comprising 329,968 shares worth $12.6 million. Boston Scientific is a manufacturer of medical devices that are used in interventional medical specialties. Overall hedge fund sentiment towards BSX has been bullish in recent months, as the number of bets at the end of Q2 aggregated to 66, compared to the previous all-time high of 59. This figure currently stands at 61 as a net of five hedge funds cashed out.
According to Yahoo Finance, the stock’s trailing PE ratio equals 13.11. The stock’s performance is fairly disappointing as it returned -2.7% during Q3 and underperformed the market’s return of 19.42%. On the other hand, the company is making significant R&D investments, which have been highlighted by Artisan Mid Cap Fund in its Q1 2020 Investor Letter. In September 2020 Boston Scientific Corp. announced an expanded investment and exclusive acquisition option agreement with Farapulse, Inc., whose technology specializes in various cardiac treatments. Here is what Scott Olson, senior vice president and president, Rhythm Management, Boston Scientific had to say:
“Our expanded investment in this technology, combined with our recent CE Marked cryoablation and contact force catheters with local impedance technology, affirms our commitment to offer physicians an innovative and comprehensive portfolio of electrophysiology products and services.”
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Disclosure: None. 10 best cheap stocks to buy now according to Ray Dalio is originally published at Insider Monkey.
