In this piece, we will take a look at the 10 biotech stocks in billionaire Ray Dalio’s portfolio.
Mr. Ray Dalio is an American billionaire who is in charge of the hedge fund Bridgewater Associates. He has spent decades in the financial industry and is a natural trader who started tinkering around with stocks at an early age. Mr. Dalio’s first exposure to Wall Street came at the tender age of 12 when he was working as a cabby at The Links Golf Club in New York. This job provided the now billionaire hedge fund manager a chance to interact with Wall Street executives, an opportunity that would later land him his first job in the financial world at the same age. This job saw him nearly triple his first investment in an airline, and the young Dalio followed this up by increasing his research skills and engaging older investors.
This natural talent has now put Mr. Dalio at the top of the world’s most valuable hedge fund. As of the third quarter of this year Bridgewater Associates’ portfolio was valued at $18 billion. Mr. Dalio himself is one of the richest hedge fund executives out there, with his personal net worth estimated to be a whopping $20 billion as of December 2021 according to data compiled by Forbes Magazine. The fund is headquartered in Westport, Connecticut, and it offers customers three investment products. These are the Pure Alpha Fund, the All-Weather Fund, and the Pure Alpha Major Markets Fund, with a starting fee of $500,000.
Some of the top picks by Mr. Dalio’s fund are The Coca-Cola Company (NYSE:KO), Walmart Inc. (NYSE:WMT), and PepsiCo, Inc. (NASDAQ:PEP). Additionally, it has also dabbled with technology companies such as Apple Inc. (NASDAQ:AAPL) and Meta Platforms, Inc. (NASDAQ:FB). The fund has had an annualized return of 11.5% for the past 28 years.
In this piece, we will focus on some of the fund’s favorite biotechnology investments, given the recent interest in the sector due to it being on the frontlines of the battle against the ongoing pandemic.
Our Methodology
In order to extract Mr. Dalio’s favorite biotechnology stocks to invest in, we scanned Bridgewater Associates’ form 13F filings with the Securities and Exchange Commission for the third quarter of this year. Once the companies were identified, we then moved to analyze them through their earnings, analyst coverage, investor letters, and other large institutional holdings alongside hedge fund sentiment generated through Insider Monkey’s survey of 867 hedge funds for Q3 2021. The companies have then been sorted by their closing share prices on 10th December 2021.
10 Biotech Stocks in Billionaire Ray Dalio’s Portfolio
10. ShockWave Medical, Inc. (NASDAQ:SWAV)
Bridgewater Associates’ Stake Value: $6.6 million
Percentage of Bridgewater Associates’ 13F Portfolio: 0.03%
Number of Hedge Fund Holders: 25
Closing price on December 10, 2021: $178.64
ShockWave Medical, Inc. (NASDAQ:SWAV) is a medical device manufacturer which develops intravascular products for removing plaque and other buildups from human cardiovascular systems.
Mr. Dalio’s hedge fund owned 32,121 ShockWave Medical, Inc. (NASDAQ:SWAV) shares which were worth $6.6 million and made up for 0.03% of its portfolio during Q3 2021. 25 of the 867 hedge funds polled by Insider Monkey during the same period held the company’s shares.
ShockWave Medical, Inc. (NASDAQ:SWAV) brought in $65 million in revenue and $0.05 in GAAP EPS for its Q3, beating analyst estimates for both. Its price target was raised to $258 from $219 by Canaccord in November 2021, with the firm stating that its management can navigate current circumstances for future growth.
Rock Springs Capital Management is ShockWave Medical, Inc. (NASDAQ:SWAV)’s largest investor. It owns 220,000 shares worth $45 million.
Artisan Partners mentioned the company in its Q2 2021 investor letter. It outlined that:
“Turning to our individual holdings, among our top Q2 contributors (includes) Shockwave Medical. Shockwave is an early stage medical device company developing and commercializing products to treat calcified cardiovascular disease across two primary end markets: peripheral artery disease and coronary artery disease. Both diseases reduce blood flow to the heart (coronary) and limbs (peripheral). The company recently received FDA approval for its coronary intravascular lithotripsy catheter, which is used to break up hard materials restricting blood flow to the heart utilizing the company’s proprietary technology (IVL) which cracks calcium in arterial vessels through the application of sound waves. This method of treatment allows physicians to access and treat patients more gently. With the catheter similar to the current method of balloon angioplasty, and because there is generous reimbursement for adoption of the technology, we believe the company is in the early stages of a meaningful profit cycle.”
ShockWave Medical, Inc. (NASDAQ:SWAV)’s shares closed at $178.64 on December 10, 2021.
ShockWave Medical, Inc. (NASDAQ:SWAV) joins Apple Inc. (NASDAQ:AAPL) and Meta Platforms, Inc. (NASDAQ:FB) in Mr. Dalio’s list of favorite stocks.
9. Johnson & Johnson (NYSE:JNJ)
Bridgewater Associates’ Stake Value: $444 million
Percentage of Bridgewater Associates’ 13F Portfolio: 2.43%
Number of Hedge Fund Holders: 88
Closing price on December 10, 2021: $165.49
Johnson & Johnson (NYSE:JNJ) is a health, pharmaceutical, and medical devices provider headquartered in the United States. The company provides medicines for pain, flu, and allergies, and its products also target cancer, heart, and other diseases.
During its Q3, Johnson & Johnson (NYSE:JNJ) raked in $23 billion in revenue and $2.60 in non-GAAP EPS, missing estimates for the former and beating them for the latter. Raymond James lowered its price target to $178 from $183 in October 2021, outlining that the company is in a stronger position to battle headwinds than originally thought.
Mr. Dalio’s investment firm owned 2.7 million Johnson & Johnson (NYSE:JNJ) shares during Q3 2021. These were worth $444 million and represented 2.43% of its portfolio. During the same time period, 88 of the 867 hedge funds polled by Insider Monkey held a stake in the company.
Terry Smith’s Fundsmith LLP is Johnson & Johnson (NYSE:JNJ)’s largest investor through owning 7.2 million shares worth $1.1 billion.
In its Q2 2021 investor letter, Distillate Capital outlined about Johnson & Johnson (NYSE:JNJ) that:
“The largest additions in the rebalance, Johnson & Johnson was around 50 and 40 basis points incrementally. J&J underperformed in the quarter while its normalized free cash flows held steady and so its position size was topped off to match the stable cash flows.”
8. Tandem Diabetes Care, Inc. (NASDAQ:TNDM)
Bridgewater Associates’ Stake Value: $6.8 million
Percentage of Bridgewater Associates’ 13F Portfolio: 0.03%
Number of Hedge Fund Holders: 31
Closing price on December 10, 2021: $132.21
Tandem Diabetes Care, Inc. (NASDAQ:TNDM) is an insulin provider for diabetic patients in the United States. It provides insulin cartridges, pumps, and other tools.
Bridgewater Associates owned 57,608 Tandem Diabetes Care, Inc. (NASDAQ:TNDM) shares during the third quarter of this year. These were worth $6.8 million and represented 0.03% of its portfolio. 31 of the 867 hedge funds polled by Insider Monkey owned the company’s shares by Q3 2021 end.
In addition to major tech stocks Meta Platforms, Inc. (NASDAQ:FB) and Apple Inc. (NASDAQ:AAPL), hedge funds are paying attention to biotech names like Hologic, Inc. (NASDAQ:HOLX).
For its third fiscal quarter, Tandem Diabetes Care, Inc. (NASDAQ:TNDM)’s revenue and GAAP EPS beat analyst estimates and stood at $179 million and $0.09, respectively. Its price target was raised to $200 from $165 by Lake Street in December 2021, which outlined that the company’s products have a strong competitive advantage.
Tandem Diabetes Care, Inc. (NASDAQ:TNDM)’s largest investor is Mitchell Blutt’s Consonance Capital Management who owns 487,327 shares for a $58 million stake.
7. Zimmer Biomet Holdings, Inc. (NYSE:ZBH)
Bridgewater Associates’ Stake Value: $32 million
Percentage of Bridgewater Associates’ 13F Portfolio: 0.17%
Number of Hedge Fund Holders: 47
Closing price on December 10, 2021: $124.49
Zimmer Biomet Holdings, Inc. (NYSE:ZBH) is an American firm that provides devices for skeletal stability to treat instabilities from disease, injuries, or surgeries. Its products cover several areas of the human body such as the knees, chest, and spine.
Mr. Dalio’s Bridgewater Associates owned 219,808 Zimmer Biomet Holdings, Inc. (NYSE:ZBH) shares worth $32 million and constituting 0.17% of its portfolio during Q3 2021. During the same time period, 47 of the 867 hedge funds polled by Insider Monkey owned the company’s shares.
Zimmer Biomet Holdings, Inc. (NYSE:ZBH) brought in $1.92 billion in revenue and $1.81 in non-GAAP EPS for its fiscal Q3, missing estimates for revenue and beating them for EPS. Its price target was reduced to $158 from $175 by Needham in December 2021, who outlined that new COVID waves might stress hospitals and reduce the demand for the company’s products.
Zimmer Biomet Holdings, Inc. (NYSE:ZBH)’s largest investor is Andreas Halvorsen’s Viking Global with 3.4 million shares worth $498 million.
6. Hologic, Inc. (NASDAQ: HOLX)
Bridgewater Associates’ Stake Value: $21 million
Percentage of Bridgewater Associates’ 13F Portfolio: 0.11%
Number of Hedge Fund Holders: 39
Closing price on December 10, 2021: $74.75
Hologic, Inc. (NASDAQ:HOLX) is a diagnostics and treatment company headquartered in the United States that covers diseases specific to women, such as breast cancer, hepatitis and others.
For its fourth fiscal quarter, Hologic, Inc. (NASDAQ:HOLX) earned $1.3 billion in revenue and $1.61 in non-GAAP EPS, beating analyst estimates for both. 39 of the 867 hedge funds polled by Insider Monkey during Q3 2021 owned the company’s shares.
Cowen kept an $83 price target and an Outperform rating for Hologic, Inc. (NASDAQ:HOLX) in October 2021. The company’s shares closed at $74.75 on 10th December 2021.
Bridgewater Associates owned 286,082 Hologic, Inc. (NASDAQ:HOLX) shares during Q3 2021, which were worth $21 million and made up for 0.11% of its portfolio.
Hologic, Inc. (NASDAQ:HOLX)’s largest investor is Israel Englander’s Millennium Management who owns 1.5 million shares worth $115 million.
Just like Meta Platforms, Inc. (NASDAQ:FB) and Apple Inc. (NASDAQ:AAPL), Hologic, Inc. (NASDAQ:HOLX) is one of Mr. Dalio’s favorite stocks.
5. NovoCure Limited (NASDAQ:NVCR)
Bridgewater Associates’ Stake Value: $11.1 million
Percentage of Bridgewater Associates’ 13F Portfolio: 0.06%
Number of Hedge Fund Holders: 23
Closing price on December 10, 2021: $84.25
NovoCure Limited (NASDAQ:NVCR) is an American company that deals in providing treatments for several kinds of tumors. Its Optune lineup targets brain cancer, and it is also working on products to target others cancers such as those of the lungs, pancreas, and liver.
Mr. Dalio’s investment firm held 96,106 NovoCure Limited (NASDAQ:NVCR) shares during this year’s third quarter. These were worth $11.1 million and represented 0.06% of its portfolio. During Q3 2021, 23 of the 867 hedge funds polled by Insider Monkey owned the company’s shares.
NovoCure Limited (NASDAQ:NVCR) missed analyst estimates for revenue and GAAP EPS in its Q3, by posting $133 million in revenue and -$0.13 in GAAP EPS. Its price target was lowered to $180 from $195 by Piper Sandler in an October 2021 analyst note which outlined that the Q3 results were the third time the company had disappointed Wall Street and clinical slippages for a product were not positive either.
NovoCure Limited (NASDAQ:NVCR)’s largest shareholder is Anand Desai’s Darsana Capital Partners. It owns 700,000 shares worth $81 million.
4. Merck & Co., Inc. (NYSE:MRK)
Bridgewater Associates’ Stake Value: $10.4 million
Percentage of Bridgewater Associates’ 13F Portfolio: 0.05%
Number of Hedge Fund Holders: 77
Closing price on December 10, 2021: $72.62
Merck & Co., Inc. (NYSE:MRK) is a healthcare company whose products cover several human diseases and target areas such as cancer, heart, neurophysiology, and viruses. It is also developing a pill for the ongoing coronavirus pandemic.
Bridgewater Associates owned 139,003 Merck & Co., Inc. (NYSE:MRK) shares worth $10.4 million and 0.05% of its portfolio during Q3 2021. An Insider Monkey survey of 867 hedge funds for the same time period showed that 77 owned the company’s shares.
In its Q3, Merck & Co., Inc. (NYSE:MRK) earned $13 billion in revenue and $1.75 in non-GAAP EPS, beating analyst estimates for both. Guggenheim removed its $98 price target for the company in December 2021, citing skepticism for its HIV vaccine and high estimates for the COVID-19 cure.
Merck & Co., Inc. (NYSE:MRK)’s largest investor is Ken Fisher’s Fisher Asset Management who owns 10 million shares worth $798 million.
Artisan Partners mentioned Merck & Co., Inc. (NYSE:MRK) in its Q1 2021 investor letter, outlining that:
“In Q1, we initiated a position in Merck, a provider of health care solutions including prescription medicines, vaccines, biologic therapies, animal health and consumer care products. We purchased Merck when the stock came under pressure in part on concerns that the newly minted Biden administration could implement regulatory changes and lower drug costs in the pharmaceutical industry. Recent, but anticipated changes to Merck’s management team have also weighed on shares, as have concerns over the company’s heavy reliance on immunotherapy treatment Keytruda. Notably, Merck is not getting much credit from investors for the 60+ programs it has in clinical development, despite having several solid and large new product opportunities. Additionally, the company’s strong balance sheet and robust free cash flow provide it multiple options for future partnerships and acquisitions. While Merck is undergoing a period of transition, we think the company’s fundamentals are strong and believe changes to management should be a catalyst for improvement.”
3. Zai Lab Limited (NASDAQ:ZLAB)
Bridgewater Associates’ Stake Value: $16.7 million
Percentage of Bridgewater Associates’ 13F Portfolio: 0.09%
Number of Hedge Fund Holders: 36
Closing price on December 10, 2021: $65.51
Zai Lab Limited (NASDAQ:ZLAB) is a Chinese biotechnology firm that develops treatments for cancers, immune system disorders, and infectious diseases.
Bridgewater Associates owned 158,488 Zai Lab Limited (NASDAQ:ZLAB) shares during Q3 2021. These were worth $16.7 million and represented 0.09% of its portfolio. Of the 867 hedge funds part of Insider Monkey’s research, 36 owned the company’s shares by Q3 2021 end.
As of December 10, 2021, Zai Lab Limited (NASDAQ:ZLAB) shares were trading at $65.51.
Zai Lab Limited (NASDAQ:ZLAB) brought in $43 million in revenue and -$1.01 in GAAP EPS for its Q3, beating analyst estimates for EPS only. Citi raised its price target to $231 from $217 in December 2021, highlighting that the company’s ovarian cancer treatments are impressive during trials.
Andreas Halvorsen’s Viking Global is Zai Lab Limited (NASDAQ:ZLAB)’s largest investor. It owns 2.9 million shares worth $309 million.
Zai Lab Limited (NASDAQ:ZLAB) was mentioned by Baron Funds in its Q3 2021 investor letter which outlined that:
“Zai Lab Limited is a leading biotechnology company helping to modernize the Chinese health care industry. Zai’s initial focus centered around in-licensing western medicines for commercialization in China; this has expanded into internal pipeline efforts. Shares fell alongside the broader Chinese equity markets given concerns around regulations the government has enacted in education, technology, and real estate. While we are paying attention to these developments, so far, we think health care will not be subject to any draconian rulings.”
2. AstraZeneca PLC (NASDAQ:AZN)
Bridgewater Associates’ Stake Value: $6.2 million
Percentage of Bridgewater Associates’ 13F Portfolio: 0.03%
Number of Hedge Fund Holders: 41
Closing price on December 10, 2021: $54.02
AstraZeneca PLC (NASDAQ:AZN) is a medicine manufacturer for ailments of the heart, cancer, lungs, digestive system, and other areas. It also develops and sells a vaccine for the COVID-19 coronavirus virus.
For its Q3, AstraZeneca PLC (NASDAQ:AZN) brought in $9.8 billion revenue and a GAAP EPS of $1.08, as it pleased Wall Street by exceeding analyst estimates for both. In a November 2021 analyst note, Bryan Garnier set the company’s price target to GBp 10,500.
Mr. Dalio’s Bridgewater Associates owned 104,233 AstraZeneca PLC (NASDAQ:AZN) shares as of Q3 2021. This let him have a stake of $6.2 million, which made up 0.03% of the firm’s portfolio. During the same time period, 41 of 876 hedge funds polled by Insider Monkey owned AstraZeneca PLC (NASDAQ:AZN)’s shares.
AstraZeneca PLC (NASDAQ:AZN)’s closing share price was $54.02 on December 10, 2021.
Ken Fisher’s Fisher Asset Management is AstraZeneca PLC (NASDAQ:AZN)’s largest shareholder through a $1.1 billion stake via owning 19 million shares.
1. Pfizer Inc. (NYSE:PFE)
Bridgewater Associates’ Stake Value: $7.1 million
Percentage of Bridgewater Associates’ 13F Portfolio: 0.03%
Number of Hedge Fund Holders: 74
Closing price on December 10, 2021: $52.78
Pfizer Inc. (NYSE:PFE) is an American biotechnology and biopharmaceutical firm that is known for its host of medicines, making it a global brand. The company develops and sells medicines for several diseases of the heart, the immune system, pain, and the coronavirus.
Pfizer Inc. (NYSE:PFE) posted $24 billion in revenue and $1.34 in EPS in its third fiscal quarter, beating analyst estimates for both. As of Q3 2021, 74 of the 867 hedge funds part of Insider Monkey’s research held stakes in the company.
JPMorgan increased Pfizer Inc. (NYSE:PFE)’s price target to $53 from $42 in November 2021, outlining that the company’s traditional business lines should face limited growth, but that investors should be on the watch for new coronavirus variants to help growth. Pfizer’s COVID-19 vaccine is one of the two messenger ribonucleic acid (mRNA) vaccines out there, with the technology yielding superior virus protection when compared against its non-mRNA counterparts.
Pfizer Inc. (NYSE:PFE)’s shares closed at $52.78 on December 10, 2021. During the third quarter, Mr. Dalio’s investment firm held 165,303 shares of the company, which were worth $7 million and represented 0.03% of its portfolio.
Ric Dillon’s Diamond Hill Capital is Pfizer Inc. (NYSE:PFE)’s largest shareholder. It owns 10.6 million shares worth $457 million.
In its Q1 2021 investor letter, Clearbridge Investments mentioned Pfizer Inc. (NYSE:PFE). It outlined that:
“Our underweights in health care and staples contributed to relative performance during the period. As we continue to focus the portfolio on high-conviction ideas, we sold Pfizer in late 2020, in the health care sector.”
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Disclosure. None. 10 Biotech Stocks in Billionaire Ray Dalio’s Portfolio is originally published on Insider Monkey.
