In this piece, we will take a look at the 10 industrial stocks to buy according to billionaire Ray Dalio.
Ray Dalio is the man behind Bridgewater Associates, one of the largest hedge funds in the world. His career spans decades spent in the financial industry. According to Forbes Magazine, Mr. Dalio was worth a whopping $20 billion as of December 2021.
His hedge fund, Bridgewater Associates, is headquartered in Westport, Connecticut, United States. It offers three products to its clients, which are the Pure Alpha Fund, the All Weather Fund, and the Pure Alpha Major Markets Fund.
The fund has an investment fee of $500,000 for its All Weather Fund and the fee for the other two runs into millions of dollars.
Dalio founded Bridgewater in 1975, prior to which he also spent his time at various other funds and banks. The executive is also known for bringing the colorful image of Wall Street in the consumer’s mind, as he longed to bring the freedom of college life to the financial world during the time he spent at the investment firm Shearson Hayden Stone. Mr. Dalio received his bachelor’s from Long Island University and would continue to trade stocks during his time in college, becoming interested in the commodities market due to its low funding requirements. After his undergraduate degree, Dalio would go on to attend the Harvard Business School for his Master’s in Business Administration.
Bridgewater Associates has a portfolio that was worth $18 billion as of the third quarter of this year. The fund’s annualized returns for the past 28 years stand at 11.5%. Some of the popular companies that it has invested in include Walmart Inc. (NYSE:WMT), The Coca-Cola Company (NYSE:KO), and PepsiCo, Inc. (NASDAQ:PEP).
Our Methodology
For determining Mr. Dalio’s top industrial investments, we sifted through his firm’s 13-F filings for Q3 2021, which consist of hundreds of different companies. Once this laborious process was finished, we took a look at the identified firms’ analyst coverage, quarterly reports, investor letters, largest shareholders, and hedge fund sentiment gathered through Insider Monkey’s survey of 867 funds’ holdings for Q3 2021. This enabled us to form a holistic view of the companies.
With this context in mind, let’s now discuss our list of the 10 industrial stocks to buy according to billionaire Ray Dalio.
Industrial Stocks To Buy According To Billionaire Ray Dalio
10. Mohawk Industries, Inc. (NYSE:MHK)
Bridgewater Associates’ Stake Value: $18.3 million
Percentage of Bridgewater Associates’ 13F Portfolio: 0.1%
Number of Hedge Fund Holders: 38
Mohawk Industries, Inc. (NYSE:MHK) is an American flooring products provider which caters to both residential and corporate customers. Some of the products that it provides the construction industry include ceramic flooring products.
Mr. Dalio’s Bridgewater Associates owned 103,630 Mohawk Industries, Inc. (NYSE:MHK) shares worth $18.3 million and represented 0.1% of its multi-billion-dollar portfolio as of Q3 2021. During the same time period, 38 of 867 hedge funds polled by Insider Monkey owned a stake in the flooring firm.
Mohawk Industries, Inc. (NYSE:MHK) brought in $2.8 billion in revenue and $3.95 in non-GAAP EPS in its fiscal Q3, beating analyst estimates for EPS only. BofA set a $174 price target for the company in November 2021, stating that the company was operating at full capacity.
Mohawk Industries, Inc. (NYSE:MHK)’s largest investor is Richard S. Pzena’s Pzena Investment Management who owns 1.5 million shares worth $282 million.
Mohawk Industries, Inc. (NYSE:MHK) joins The Coca-Cola Company (NYSE:KO), Walmart Inc. (NYSE:WMT), and PepsiCo, Inc. (NASDAQ:PEP) in the list of Mr. Dalio’s favorite stocks.
9. Celanese Corporation (NYSE:CE)
Bridgewater Associates’ Stake Value: $25 million
Percentage of Bridgewater Associates’ 13F Portfolio: 0.13%
Number of Hedge Fund Holders: 26
Celanese Corporation (NYSE:CE) is one of the largest chemical companies in the world, which focuses on manufacturing and selling acetic acid and vinyl acetate to industrial customers. Its customers cover several industries such as automotive, painting, coating, and telecommunications.
Celanese Corporation (NYSE:CE) earned $2.2 billion in revenue and $4.82 in non-GAAP EPS for its Q3, beating analyst estimates for both. Its price target was raised to $200 from $190 by BMO Capital in October 2021, which highlighted that the company posted strong earnings results and future guidance.
Bridgewater Associates held 168,739 Celanese Corporation (NYSE:CE) shares during the third quarter of this year. These were worth $25 million and represented 0.13% of its portfolio. An Insider Monkey survey of 867 hedge funds for Q3 2021 revealed that 26 had bought the company’s shares.
Celanese Corporation (NYSE:CE)’s largest investor is Brandon Haley’s Holocene Advisors who owns 1.5 million shares worth $227 million.
8. Pool Corporation (NASDAQ:POOL)
Bridgewater Associates’ Stake Value: $25.6 million
Percentage of Bridgewater Associates’ 13F Portfolio: 0.14%
Number of Hedge Fund Holders: 40
Pool Corporation (NASDAQ:POOL) is an American company that provides swimming pool equipment and parts alongside other outdoor living products. It is a wholesale distributor whose customers also include builders, service companies, and contractors for the agricultural industry.
As Q3 2021 came to an end, Mr. Dalio’s investment firm held 59,057 Pool Corporation (NASDAQ:POOL) shares, which were worth $25.6 million and represented 0.14% of its portfolio. During the same time period, 40 of the 867 hedge funds polled by Insider Monkey had holdings in the company.
Pool Corporation (NASDAQ:POOL)’s largest shareholder is Robert Joseph Caruso’s Select Equity Group who owns 887,636 shares worth $385 million.
In its third fiscal quarter, Pool Corporation (NASDAQ:POOL) brought in $1.4 billion in revenue and $4.44 in non-GAAP EPS, beating analyst estimates for both. In an October 2021 analyst note, Loop Capital raised the company’s price target to $540 from $485, highlighting that the earning beat reflects strong foundational business strengths.
In addition to PepsiCo, Inc. (NASDAQ:PEP), The Coca-Cola Company (NYSE:KO) and Walmart Inc. (NYSE:WMT), Pool Corporation (NASDAQ:POOL) is one of Ray Dalio’s top stock picks.
Wasatch Core Growth Fund mentioned Pool Corporation (NASDAQ:POOL) in its Q2 2021 investor letter, outlining that:
“The top contributor to Fund performance for the second quarter was Pool Corp. (POOL), a wholesale distributor of swimming pools and related supplies. The company’s customers include more than 120,000 contractors and retailers. Pool offers approximately 200,000 national-brand and private-label products from more than 2,000 suppliers. We think the company has done an impressive job of positioning itself as a centralized, one-stop resource for pool-related needs ranging from initial construction through maintenance and refurbishment. The prevalence of stay-athome orders during the pandemic led many consumers to seek alternative outdoor activities, and Pool enjoyed a record year in 2020. While some investors had been concerned growth would slow in 2021, that hasn’t been the case. In fact, growth has accelerated. And the stock price now reflects the improved fundamentals. On the technology front, Pool has introduced a mobile app that allows customers to order supplies for expedited pickup and delivery.”
7. Genuine Parts Company (NYSE:GPC)
Bridgewater Associates’ Stake Value: $25.8 million
Percentage of Bridgewater Associates’ 13F Portfolio: 0.14%
Number of Hedge Fund Holders: 28
Genuine Parts Company (NYSE:GPC) is a provider of automotive and industrial replacement parts alongside office products and electronic materials. It is headquartered in Atlanta, Georgia, United States.
Bridgewater Associates owned 213,006 Genuine Parts Company (NYSE:GPC) shares during the third quarter of this year. This stake was worth $25.8 million and represented 0.14% of its portfolio. 28 of the 867 hedge funds polled by Insider Monkey for the same time period had holdings in the firm.
Genuine Parts Company (NYSE:GPC) earned $4.8 billion in revenue and non-GAAP EPS of $1.88 in its third quarter, beating analyst estimates for both. Goldman Sachs raised the company’s price target from $113 to $125 in a May 2021 analyst note, outlining that economic recovery will spell well for the company.
Genuine Parts Company (NYSE:GPC)’s largest investor is Mario Gabelli’s GAMCO Investors who own 766,023 shares worth $92 million.
In its Q1 2021 investor letter, Amana Mutual Funds Trust mentioned the firm, outlining that:
“Genuine Parts presents something of a conundrum. As a supplier of replacement automotive parts, the decline in new car sales would be good. On the other hand, people aren’t driving nearly as much.”
6. The Clorox Company (NYSE:CLX)
Bridgewater Associates’ Stake Value: $38.9 million
Percentage of Bridgewater Associates’ 13F Portfolio: 0.21%
Number of Hedge Fund Holders: 34
The Clorox Company (NYSE:CLX) provides bleaches and cleaning products to commercial enterprises and everyday consumers. It is headquartered in Oakland, California, and is known for several brands which also target other industries such as cosmetics.
For its first fiscal quarter, The Clorox Company (NYSE:CLX) brought in $1.8 billion in revenue and $1.21 in non-GAAP EPS, beating analyst estimates for both. Its price target was lowered to $131 from $138 by Barclays in November 2021, who outlined that the chemical company revealed surprising cash flow problems in its earnings.
During the third quarter of this year, Mr. Dalio’s Bridgewater Associates held 235,070 The Clorox Company (NYSE:CLX) shares which were worth $38.9 million and constituted 0.21% of its portfolio. A survey of 867 hedge funds for the same time period conducted by Insider Monkey revealed that 34 had holdings in the company.
The Clorox Company (NYSE:CLX)’s largest investor is Andy Brown’s Cedar Rock Capital who owns 1.6 million shares worth $268 million.
Alongside PepsiCo, Inc. (NASDAQ:PEP), The Coca-Cola Company (NYSE:KO), and Walmart Inc. (NYSE:WMT), The Clorox Company (NYSE:CLX) is one of Ray Dalio’s hot stocks.
5. DuPont de Nemours, Inc. (NYSE:DD)
Bridgewater Associates’ Stake Value: $42.7 million
Percentage of Bridgewater Associates’ 13F Portfolio: 0.23%
Number of Hedge Fund Holders: 51
DuPont de Nemours, Inc. (NYSE:DD) is a supplier to several technology industries. Its products are used in the manufacture of photovoltaics (solar panels), semiconductors (chips), and light-emitting diodes (LED) televisions among others. The company is headquartered in the United States.
For its Q3, DuPont de Nemours, Inc. (NYSE:DD) brought in $4.27 billion in revenue and $1.15 in non-GAAP EPS, beating analyst estimates for both. The company’s price target was raised to $101 from $96 by BMO Capital in November 2021, which shared that acquisitions and divestments have played a positive role in its transformation.
During Q3 2021, Mr. Dalio’s investment firm held 628,666 DuPont de Nemours, Inc. (NYSE:DD) shares, which were worth $42.7 million and represented 0.23% of its portfolio. An Insider Monkey survey of 867 hedge funds for the same time period revealed that 51 had holdings in the company.
The industrial supplier’s largest shareholder is David S. Winter and David J. Millstone 40 North Management who owns 4.8 million shares worth $331 million.
Longleaf Partners Fund mentioned DuPont de Nemours, Inc. (NYSE:DD) in its Q1 2021 investor letter, outlining that:
“We exited three businesses in the quarter (including) DuPont. We have owned DuPont successfully three times now in the last decade and have great respect for CEO Ed Breen, who has delivered on creating value and focusing the company on its core businesses. We continue to view the business and leadership highly and hope to have the opportunity to partner with them again.”
4. The Sherwin-Williams Company (NYSE:SHW)
Bridgewater Associates’ Stake Value: $43.7 million
Percentage of Bridgewater Associates’ 13F Portfolio: 0.23%
Number of Hedge Fund Holders: 44
The Sherwin-Williams Company (NYSE:SHW) is an American company that sells paint, coatings, and other associated products to industries and other customers. These products include automotive refinish products, wood finish coatings, and performance-based colorants among others.
Bridgewater Associates owned a $43.7 million stake in The Sherwin-Williams Company (NYSE:SHW) as the third quarter of this year came to an end. This was through 156,574 shares, and it represented 0.23% of the investment firm’s portfolio. Of the 867 hedge funds part of Insider Monkey’s Q3 2021 poll, 44 had also owned The Sherwin-Williams Company (NYSE:SHW) shares.
The Sherwin-Williams Company (NYSE:SHW) raked in $5.15 billion in revenue and $2.09 in non-GAAP EPS for its third fiscal quarter, as it beat analyst estimates for both. BMO Capital raised the company’s price target to $355 in October 2021, outlining that the headwinds faced by the company appear to have peaked.
Richard Chilton’s Chilton Investment Company is the company’s largest shareholder. It owns 1.1 million shares worth $323 million.
3. PPG Industries, Inc. (NYSE:PPG)
Bridgewater Associates’ Stake Value: $51.9 million
Percentage of Bridgewater Associates’ 13F Portfolio: 0.28%
Number of Hedge Fund Holders: 30
PPG Industries, Inc. (NYSE:PPG) is an industrial specialty materials and coatings provider headquartered in the United States which provides services for several heavy-duty segments. These include fleet and aircraft maintenance alongside bridge repairs and metal fabrication.
Mr. Dalio’s Bridgewater Associates owned 363,554 PPG Industries, Inc. (NYSE:PPG) shares worth $51.9 million and 0.28% of its portfolio by the end of Q3 2021. During the same time period, 30 of 867 hedge funds polled by Insider Monkey had holdings in the company.
For its Q3, PPG Industries, Inc. (NYSE:PPG) earned $4.37 billion in revenue and $1.69 in non-GAAP EPS, beating estimates on both counts. Mizuho raised its price target to $184 from $180 in October 2021, stating that despite slow automotive recoveries, it was optimistic for the company’s future.
PPG Industries, Inc. (NYSE:PPG)’s largest shareholder is Jean-Marie Eveillard’s First Eagle Investment Management who owns 1 million shares worth $154 million.
Madison Funds mentioned PPG Industries, Inc. (NYSE:PPG) in its 3Q 2021 investor letter. It outlined that:
“Regarding business activity, we have had companies report disruptions to current economic results from the aforementioned logistical challenges. The coatings industry and PPG have seen raw material shortages and escalating cost inflation from Gulf Coast petrochemical suppliers, while also experiencing lower demand from auto production customers due to semiconductor shortages. We are encouraged by the pricing escalators that PPG is enacting, which bodes well for recouping this year’s cost increases as the supply chain normalizes.”
2. Veeva Systems Inc. (NYSE:VEEV)
Bridgewater Associates’ Stake Value: $85.4 million
Percentage of Bridgewater Associates’ 13F Portfolio: 0.46%
Number of Hedge Fund Holders: 44
Veeva Systems Inc. (NYSE:VEEV) is a software provider for the life sciences industry in the United States. It provides products that allow its customers to manage their commercial functions, research and development, and communication.
In its third fiscal quarter, Veeva Systems Inc. (NYSE:VEEV) brought in $476 million in revenue and $0.97 in non-GAAP EPS, topping analyst estimates on both counts. In December 2021, Baird reduced the company’s price target to $310 from $349. It based the decision on worrying margins that might hamper growth.
As the third quarter of this year came to an end, Mr. Dalio’s Bridgewater Associates held 296,451 Veeva Systems Inc. (NYSE:VEEV) shares. These were worth $85 million and represented 0.46% of its multi-billion dollar portfolio. 44 of the 867 hedge funds held the company’s shares in Q3 2021 according to Insider Monkey’s research.
Veeva Systems Inc. (NYSE:VEEV)’s largest shareholders is Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital who owns 981,523 shares worth $282 million.
1. Danaher Corporation (NYSE:DHR)
Bridgewater Associates’ Stake Value: $214 million
Percentage of Bridgewater Associates’ 13F Portfolio: 1.17%
Number of Hedge Fund Holders: 74
Danaher Corporation (NYSE:DHR) provides its customers with several products that allow them to manage waste, ground, and ocean water across construction and other industries. It also offers packaging solutions for consumer and industrial products.
Bridgewater Associates held 703,685 Danaher Corporation (NYSE:DHR) shares as of Q3 2021. These were worth $214 million and represented 1.17% of its portfolio. 74 of the 867 hedge funds polled by Insider Monkey held the company’s shares during Q3 2021.
Danaher Corporation (NYSE:DHR) earned $7.23 billion in revenue and $2.39 in non-GAAP EPS for its Q3. This enabled it to beat analyst estimates for both. Its price target was raised by Baird to $340 from $305 in October 2021, with strong guidance and optimistic COVID-19 testing assumptions driving the decision.
Ken Fisher’s Fisher Asset Management is Danaher Corporation (NYSE:DHR)’s largest investor. It owns a stake of $1 billion in the company, through 3.4 million shares.
ClearBridge Investments mentioned the company in its Q2 2021 investor letter, stating that:
“Our differentiated positions in the health care sector also made strong contributions as the market began to reward the heavily discounted sector. Danaher, for example, is seeing customer activity approach pre-pandemic levels and is executing well. In addition to improving health through its life sciences (research tools for biopharmaceutical, food and beverage, medical, aerospace and microelectronics industries) and diagnostics (tools for use in labs and critical care settings) businesses, Danaher offers environmental and applied solutions that keep global food and water supplies safe.”
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Disclosure. None. 10 Industrial Stocks To Buy According To Billionaire Ray Dalio is originally published on Insider Monkey.
