In this article, we discuss the 10 latest stock picks of billionaire Ray Dalio.
Ray Dalio is accredited with founding one of the largest hedge funds in the world, Bridgewater Associates, managing over $223 billion in securities as of July 2021. He founded the hedge fund in 1975, after graduating from Harvard Business School. As of November 17, Dalio’s real-time net worth stands at $20 billion. According to a report published by CNBC, roughly 59% of Dalio’s fund’s assets belonged to non-U.S. clients.
Bridgewater Associates’ average return stood at 12% in the past 28 years, compared with a 7% return of S&P 500 during the same period.
Recently, Ray Dalio announced the launch of a new China fund through a local subsidiary and aims to raise over $468.8 million. He has been exploring investment opportunities in China for quite some time now owing to the region’s economic rise. In 2018, Bridgewater (China) Investment Management instituted its very first China product for investors in the country.
As of Q3 2021, Bridgewater Associates’ 13F portfolio value is recorded at over $18.2 billion, up 1.17% from the previous quarter. The fund invests in several sectors, including technology, services, finance, healthcare, and industrial goods. Bridgewater Associates started building its position in 117 companies and in this article, we will discuss some of the latest stock picks of the fund based on its Q3 filings.
Some of the notable stocks in this regard are Levi Strauss & Co. (NYSE:LEVI), Lithia Motors, Inc. (NYSE:LAD), Moderna, Inc. (NASDAQ:MRNA), Philip Morris International Inc. (NYSE:PM), Amazon.com, Inc. (NASDAQ:AMZN), and Accenture plc (NYSE:ACN).
Our Methodology:
Let’s analyze our list of the latest stock picks of billionaire Ray Dalio. For this list, we considered Bridgewater Associates’ 13F portfolio as of Q3. The stocks are ranked according to their position in the portfolio.
10 Latest Stock Picks of Billionaire Ray Dalio
10. Thermo Fisher Scientific Inc. (NYSE:TMO)
Bridgewater Associates’ Stake Value: $5,016,000
Percent of Bridgewater Associates’ 13F Portfolio: 0.02%
Number of Hedge Fund Holders: 87
Thermo Fisher Scientific Inc. (NYSE:TMO) is one of the newest additions to Ray Dalio’s portfolio in Q3. It is an American company that specializes in scientific instrumentation and also provides software services. In Q3, Bridgewater Associates started building its position in the company with 8,779 shares, valued at over $5 million. Thermo Fisher Scientific Inc. (NYSE:TMO) represents 0.02% of the hedge fund’s 13F portfolio.
The number of hedge funds tracked by Insider Monkey having stakes in Thermo Fisher Scientific Inc. (NYSE:TMO) increased to 87 in Q2, from 79 in the previous quarter. The total value of these stakes is roughly $7.4 billion.
This October, Morgan Stanley resumed its coverage on Thermo Fisher Scientific Inc. (NYSE:TMO) with an Overweight rating and a $700 price target.
L1 Capital mentioned Thermo Fisher Scientific Inc. (NYSE:TMO) in its Q3 2021 investor letter. Here is what the firm has to say:
“Included in these adjustments, in early July 2021, we divested our remaining small investment in Thermo Fisher Scientific (Thermo Fisher), the world leader in the provision of equipment, consumables, and services to the Life Sciences industry. Thermo Fisher has benefited from elevated demand for its products and services associated with COVID-19 and we sold our residual investment at a gain of more than 70% compared to our average investment cost. Thermo Fisher subsequently held an Investor Day and positively surprised many people, including us, with very strong medium-term growth targets, notwithstanding a headwind from normalisation of COVID-19-related business. Thermo Fisher is a high-quality business and remains on our ‘Bench’ for potential reinvestment.”
9. American Tower Corporation (REIT) (NYSE:AMT)
Bridgewater Associates’ Stake Value: $3,952,000
Percent of Bridgewater Associates’ 13F Portfolio: 0.02%
Number of Hedge Fund Holders: 55
American Tower Corporation (REIT) (NYSE:AMT) is an American real estate investment trust that operates wireless communications infrastructure around the world. Recently, Mizuho presented a positive outlook on REITs, as the sector outperformed S&P 500 in Q3. The firm also highlighted that American Tower Corporation (REIT) (NYSE:AMT) and Prologis account for over 23% of the Real Estate Select Sector SPDR ETF.
At the end of June 2021, 55 hedge funds tracked by Insider Monkey reported owning stakes in American Tower Corporation (REIT) (NYSE:AMT), down from 58 in Q1. The total value of the hedge fund stakes in Q2 stood at $4.7 billion, up from $4.5 billion in Q1.
In Q3, Bridgewater Associates holds 14,889 shares in American Tower Corporation (REIT) (NYSE:AMT), valued at roughly $4 million. The company accounts for 0.02% of Ray Dalio’s portfolio.
Like Levi Strauss & Co. (NYSE:LEVI), Lithia Motors, Inc. (NYSE:LAD), Moderna, Inc. (NASDAQ:MRNA), Amazon.com, Inc. (NASDAQ:AMZN), and Accenture plc (NYSE:ACN), American Tower Corporation (REIT) (NYSE:AMT) is a new addition in Ray Dalio’s portfolio.
Qualivian Investment Partners mentioned American Tower Corporation (REIT) (NYSE:AMT) in its Q3 2021 investor letter. Here is what the firm has to say:
“What Attracts Us
Superior Business:
• High barriers to entry resulting from low bargaining power of suppliers (land owners) and customers (wireless companies). Neither can find reasonable substitutes for existing cell towers. Combined with low possibility of disruption, this results in a business oligopoly and pricing power.
• Stable business with consistent high returns on equity, low maintenance capital required, and strong cash generation.
− Ten-year, non-cancelable contracts with built in pricing escalators and high renewal rates
− 1%-2% churnSuperior Reinvestment Opportunities:
• Strong growth for the foreseeable future due to increasing demand for wireless data usage, resulting in wireless carriers Capex equipment spend on existing and new towers.
• Low maintenance capital expenditure requirements; most of capital expenditure is for growthSuperior Management / Capital Allocation:
• Capital reinvested back in business has had returns well above cost of capital
• Company has purchased stock opportunistically…” (Click here to see the full text)
8. American Express Company (NYSE:AXP)
Bridgewater Associates’ Stake Value: $2,371,000
Percent of Bridgewater Associates’ 13F Portfolio: 0.01%
Number of Hedge Fund Holders: 52
American Express Company (NYSE:AXP), an American credit card service company, topped the analysts’ estimates in its latest Q3 earnings. The company posted a GAAP EPS of $2.27, beating the consensus by $0.50. Moreover, its Global Consumer Services Group reported an income of $1.5 billion, up from $1 billion during the same period last year.
Bridgewater Associates owns a $2.37 million stake in American Express Company (NYSE:AXP) as of Q3, which accounts for 0.01% of the hedge fund’s 13F portfolio. This October, BMO Capital highlighted that American Express Company (NYSE:AXP) is well-positioned to benefit from a recovery in volumes after the pandemic. The firm lifted its price target on the stock to $151, with a Market Perform rating on the shares.
Warren Buffett’s Berkshire Hathaway is the leading shareholder of American Express Company (NYSE:AXP) in Q3, holding a stake worth $25.3 billion. Overall, at the end of Q2 2021, 52 hedge funds tracked in the Insider Monkey database held stakes in American Express Company (NYSE:AXP), compared with 53 in the previous quarter. These stakes are valued at over $28.6 billion, up from $24.4 billion in Q1.
ClearBridge Investments mentioned American Express Company (NYSE:AXP) in its Q2 2021 investor letter. Here is what the firm has to say:
“In financials, American Express has done an excellent job demonstrating the resiliency of its franchise in the midst of a global pandemic that drove a 60% decline in its core travel and entertainment business. The company’s spend-centric model has been helped by fiscal stimulus ensuring a flush consumer, while management continues to execute well by adding millions of new consumer and small and medium business accounts, which should benefit the franchise over the medium to long term. We remain optimistic regarding the company’s prospects as travel and entertainment activity rebounds, adding to our position in the quarter.”
7. Amazon.com, Inc. (NASDAQ:AMZN)
Bridgewater Associates’ Stake Value: $5,318,000
Percent of Bridgewater Associates’ 13F Portfolio: 0.02%
Number of Hedge Fund Holders: 271
Amazon.com, Inc. (NASDAQ:AMZN) is one of the newest additions in Ray Dalio’s portfolio in Q3, as his hedge fund started building its position in the company by approximately 1,700 shares, valued at over $5.3 million. Amazon.com, Inc. (NASDAQ:AMZN) represents 0.02% of Bridgewater Associates’ 13F portfolio.
Martin Taylor’s Crake Asset Management is the largest shareholder of Amazon.com, Inc. (NASDAQ:AMZN) in Q3, owning shares worth $15.2 billion. Overall, 271 hedge funds tracked by Insider Monkey held a $60.4 billion worth of stake in the company in Q2. In the previous quarter, 243 hedge funds had positions in Amazon.com, Inc. (NASDAQ:AMZN), presenting a positive hedge fund sentiment in Q2.
Recently, Goldman Sachs named Amazon.com, Inc. (NASDAQ:AMZN) as its top internet stock pick in 2022, as the company showed growth in almost all of its sectors, including e-commerce, cloud computing, advertising, etc. On November 11, Tigress Financial lifted its price target on Amazon.com, Inc. (NASDAQ:AMZN) to $4,460, while keeping a Buy rating on the shares. In the past year, the stock gained 13.82%.
Polen Capital mentioned Amazon.com, Inc. (NASDAQ:AMZN) in its Q3 2021 investor letter. Here is what the firm has to say:
“Amazon has also lagged as its revenue growth is slowing on the very difficult comparisons from last year when this behemoth was growing revenue by over 40%. We still expect exceptional long-term growth and significant margin expansion as the fastest growing (and now large) segments of Amazon are also generating the highest margins.”
6. RH (NYSE:RH)
Bridgewater Associates’ Stake Value: $6,792,000
Percent of Bridgewater Associates’ 13F Portfolio: 0.03%
Number of Hedge Fund Holders: 54
RH (NYSE:RH) is an American home furnishing company that sells its products through retail stores and online. At the end of Q2, 54 hedge funds tracked by Insider Monkey reported owning stakes in the company, valued at over $4.3 billion. In the previous quarter, 50 hedge funds held $3 billion worth of stakes in the company.
In Q3, Bridgewater Associates started building its position in RH (NYSE:RH) with 10,185 shares, valued at nearly $6.8 million. The company represents 0.03% of Ray Dalio’s portfolio.
In fiscal Q2 2022, RH (NYSE:RH) posted an EPS of $8.48, beating the estimates by $1.99. This September, Loop Capital lifted its price target on RH (NYSE:RH) to $800, with a Buy rating on the shares, appreciating the company’s strong Q2 results.
Like Levi Strauss & Co. (NYSE:LEVI), Lithia Motors, Inc. (NYSE:LAD), Moderna, Inc. (NASDAQ:MRNA), Philip Morris International Inc. (NYSE:PM), Amazon.com, Inc. (NASDAQ:AMZN), and Accenture plc (NYSE:ACN), investors and analysts are also paying attention to RH (NYSE:RH) in 2021.
In its Q1 2021 investor letter, Polen Capital mentioned RH (NYSE:RH) among other stocks. Here is what the firm has to say:
“RH was also a top contributor during the quarter. RH is a leading luxury retailer in home furnishings, including high-end luxury furniture, home décor, lighting, textiles, etc. The company has experienced high demand for its products over the past year, despite many of its galleries and integrated restaurants being closed, at least temporarily, in 2020. We think the management team has continued to make thoughtful investments in the core business as well as other adjacencies to further meet customer needs. We believe RH has a long runway to further expand into other home furnishings categories, expand its footprint both domestically and internationally, and launch other luxury adjacent categories.”
5. Accenture plc (NYSE:ACN)
Bridgewater Associates’ Stake Value: $5,389,000
Percent of Bridgewater Associates’ 13F Portfolio: 0.02%
Number of Hedge Fund Holders: 52
Accenture plc (NYSE:ACN) provides IT-related professional services to its consumers. As of Q3, the company represents 0.02% of Ray Dalio’s portfolio.
On September 23, Accenture plc (NYSE:ACN) increased its quarterly dividend by 10%, which now stands at $0.97 per share. The stock’s current dividend yield is 1.16%. In its fiscal Q4 2021 results, Accenture plc (NYSE:ACN) posted a GAAP EPS of $2.20, beating the estimates by $0.01.
Select Equity Group is the largest shareholder of Accenture plc (NYSE:ACN) in Q3, owning stakes worth $20.5 billion. As of Q2, Insider Monkey’s data shows that the smart money also took interest in the company, as 52 hedge funds were bullish on Accenture plc (NYSE:ACN), up from 48 in the previous quarter. The total value of these stakes is over $3.1 billion, up from $2.35 billion in Q1 2021.
Fiduciary Management Inc. mentioned Accenture plc (NYSE:ACN) in its Q1 2021 investor letter. Here is what the firm has to say:
“Even great companies can get too expensive. In early January, we sold our long-standing position in Accenture PLC after the company’s valuation exceeded 30 times next 12 months (NTM) earnings per share (EPS). We originally invested in Accenture at the launch of the FMI International strategy at a valuation below 15 times NTM EPS and held the stock for over ten years. We added to the holding numerous times in the early years, growing the position size to as high as 5.5% in late 2014, before dialing it back in recent years as the valuation became less compelling. It is one of the world’s largest information technology services firms, specializing in helping complex, global businesses navigate disruption, and focusing on next-generation services like digital, cloud, and security. For years, the investment allowed FMI to capture the inherently higher growth of technology-related industries (GDP+) without investing directly in pure “invention-oriented” technology companies. Through Accenture we were able to avoid some of the shortfalls of tech investing: technology obsolescence, short product cycles, and subpar return on invested capital (ROIC). It grew steadily, was solidly profitable, capital-light, and generated high returns, all while maintaining a rock-solid balance sheet. It compounded its business value for many years, outperforming the MSCI EAFE indices by over 450% during our holding period. Unfortunately, the market increasingly recognized the company’s positive attributes, and the stock’s discount to intrinsic value slowly evaporated. Despite our admiration for the business, it exceeded our valuation threshold. We will continue to follow the company closely for future opportunities.”
4. Philip Morris International Inc. (NYSE:PM)
Bridgewater Associates’ Stake Value: $6,838,000
Percent of Bridgewater Associates’ 13F Portfolio: 0.03%
Number of Hedge Fund Holders: 46
Philip Morris International Inc. (NYSE:PM), a multinational cigarette and tobacco manufacturing company, has a track record of 13 years of consistent dividend growth. The company currently pays an annual dividend of $5.00 per share, with a dividend yield of 5.34%.
In Q3, Bridgewater Associates started building its position in Philip Morris International Inc. (NYSE:PM), with shares worth roughly $7 million. The company represents 0.03% of Ray Dalio’s portfolio. In its Q3 results, Philip Morris International Inc. (NYSE:PM) reported a 9% growth in its revenue at $8.12 billion. The revenue also beat the analysts’ estimates by $190 million. Recently, Deutsche Bank lifted its price target on Philip Morris International Inc. (NYSE:PM) to $120, while keeping a Buy rating on the shares.
Of the 873 hedge funds tracked by Insider Monkey, 46 hedge funds held stakes in Philip Morris International Inc. (NYSE:PM) in Q2, down from 48 in the previous quarter. The total value of these stakes is roughly $6 billion.
In its Q2 2021 investor letter, Broyhill Asset Management mentioned Philip Morris International Inc. (NYSE: PM) and discussed its stance on the firm. Here is what the fund said:
“Philip Morris (PM) shook off the prospects of a ban on menthol and a potential cap on nicotine and gained 23%. We shared our thoughts on these regulations during the quarter, which are available here.
‘PM Valuation. PM is up ~ 15% YTD and would have the most to gain under a nicotine cap. A cap would likely accelerate conversion to iQOS, which is 100% incremental for PM (PM also has zero exposure to combustible cigarettes in the U.S. and licenses its IQOS product for MO to distribute domestically). As such, the decline in PM was much more muted, with the stock hitting new 52 week highs a day after the Biden headline, driven by yesterday’s earnings release. It didn’t take long for investors to shift their attention back to fundamentals and the fundamentals here are best in class. In short, results beat estimates across the board (a recurring theme here), and management raised guidance for the full year (another recurring theme). IQOS continued to deliver impressive growth, recording continued market share gains on the heels of continued user acquisition growth, up 1.5M to 19.1M total users. Importantly, IQOS now represents nearly 30% of PM net revenues (management expects “smoke-free” products to represent more than half of their business by 2025, which should make the ESG folks happy), which is driving top-line growth and margin expansion. Hard to believe that they have created a product with higher margins than combustible cigarettes!! We expect PM operating margins to increase by 100bps – 200bps annually as IQOS continues to gain share. The stock trades at ~ 15x today or 2/3 of the market’s multiple for a business likely to generate $35B in cash flow – or 25% of the market cap – in just the next three years. Over the last decade, shares have traded at an average multiple of 18x and within a range of ~ 14x – 22x (+/-1 standard deviation). The stock yields 5.1% at the current price, and we expect management to resume share purchases in the back half of this year.’”
3. Moderna, Inc. (NASDAQ:MRNA)
Bridgewater Associates’ Stake Value: $3,198,000
Percent of Bridgewater Associates’ 13F Portfolio: 0.01%
Number of Hedge Fund Holders: 37
Moderna, Inc. (NASDAQ:MRNA), an American biotech company, recently got FDA’s approval to widen Covid-19 booster eligibility for all adults, aged 18 years and above. As of Q3, the company represents 0.01% of Ray Dalio’s portfolio.
At the end of Q2 2021, 37 hedge funds in Insider Monkey’s database reported owning stakes in Moderna, Inc. (NASDAQ:MRNA), compared with 39 in the previous quarter. The total value of these stakes is over $5.7 billion, up significantly from $1.6 billion as recorded in the previous quarter.
Recently, Piper Sandler reiterated an Overweight rating on Moderna, Inc. (NASDAQ:MRNA), while keeping a $348 price target on the stock, after the company presented a successful trial of its medicine for solid tumors and lymphoma. In its Q3 earnings, Moderna, Inc. (NASDAQ:MRNA) presented a striking 3,047.4% year-over-year growth in revenue at $4.97 billion.
Carillon Tower Advisers mentioned Moderna, Inc. (NASDAQ:MRNA) in its recently published Q3 2021 investor letter. Here is what the firm has to say:
“Moderna is a biotechnology company pioneering messenger RNA (mRNA) therapeutics and vaccines. The stock proved to be an impressive contributor once again in the quarter, as investors continue to evaluate the potential for future growth driven primarily by the firm’s revolutionary COVID-19 vaccine. Strong global demand for the vaccine may persist for the foreseeable future in order to maintain immunity as well as provide protection against any additional future variants. The potential for the firm’s mRNA technology to be used in a number of other use cases, specifically influenza, could also provide an additional tailwind for future growth.”
2. Lithia Motors, Inc. (NYSE:LAD)
Bridgewater Associates’ Stake Value: $2,390,000
Percent of Bridgewater Associates’ 13F Portfolio: 0.01%
Number of Hedge Fund Holders: 63
Lithia Motors, Inc. (NYSE:LAD) is an American automotive retailer company, based in Oregon, U.S. In Q3, Dalio’s Bridgewater Associates started building its position in the company with shares worth $2.39 million. Lithia Motors, Inc. (NYSE:LAD) represents 0.01% of Ray Dalio’s portfolio.
As of Q2, Insider Monkey’s data showed that hedge fund interest spiked in Lithia Motors, Inc. (NYSE:LAD), as 63 hedge funds held stakes in the company, up from 40 in the previous quarter. The total value of these stakes is roughly $3 billion, compared with $2.3 billion in Q1.
On October 20, Lithia Motors, Inc. (NYSE:LAD) announced its Q3 earnings and posted an EPS of $11.21, beating the consensus by $1.91. The company also reported a solid 53.9% quarter-over-quarter growth in new-vehicle retail revenues. Recently, Craig Hallum lifted its price target on Lithia Motors, Inc. (NYSE:LAD) to $520, while keeping a Buy rating on the shares.
1. Levi Strauss & Co. (NYSE:LEVI)
Bridgewater Associates’ Stake Value: $3,319,000
Percent of Bridgewater Associates’ 13F Portfolio: 0.01%
Number of Hedge Fund Holders: 30
Levi Strauss & Co. (NYSE:LEVI), an American clothing company, gained about 3% on October 6 as the company announced its solid Q3 earnings. The company posted an EPS of $0.48, beating the estimates by $0.11. Moreover, Levi Strauss & Co. (NYSE:LEVI) also reported $1.5 billion in revenue, even though its 4% stores are still closed globally due to the resurgence of Covid-19 cases.
As of Q3, Bridgewater Associates owns 135,430 shares in Levi Strauss & Co. (NYSE:LEVI), valued at $3.3 million. The company accounts for 0.01% of the hedge fund’s 13F portfolio.
At the end of Q2 2021, 30 hedge funds tracked by Insider Monkey were bullish on Levi Strauss & Co. (NYSE:LEVI), up from 19 in the previous quarter. The total value of these stakes is $414.2 million. In Q3, Select Equity Group is the company’s leading shareholder, owning shares worth $22.8 billion.
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Disclosure. None. 10 Latest Stock Picks of Billionaire Ray Dalio is originally published on Insider Monkey.
