12 Best Growth Stocks to Buy According to Billionaire Ray Dalio’s Bridgewater Associates

In this piece, we will take a look at the 12 best growth stocks to buy according to billionaire Ray Dalio’s Bridgewater Associates.

Since founding Bridgewater Associates in 1975, Ray Dalio has earned his status as one of the most respected investors. The hedge fund has become the largest in the highly competitive industry, with over $90 billion in assets under management. 

Bridgewater Associates was one of the few hedge funds that successfully navigated the 2008 financial crisis, with its main fund rising 9%  even as the S&P 500 plunged 37%.

Bridgewater Associates’ investment engine has always been a collection of hundreds of signals or quantitative indicators that provided insights on when the market was due to rise or fall. Details of the signals or the approaches leveraged have always remained a closely guarded secret, with Dalio reiterating the need to safeguard their competitive edge in the industry. The hedge fund performance has always asserted Dalio’s stock’s picking edge, as depicted by the fund’s flagship Pure Alpha 11 fund, delivering average annual returns of 11.4% between 1991 and 2022. As the overall hedge fund sector would come under pressure in 2018, going down by an average of 6.7%, Bridgewater Associates generated a 14.6% return. 

Dalio has stepped down from the day-to-day running of Bridgewater Associates in 2022 but he continues to play an active role while mentoring the current portfolio managers.

Recently, Dalio has raised concerns over the valuation levels in the equity market. Dalio has also warned that the US faces a severe political and economic crisis exacerbated by the rising interest rates. The legendary investor fears that growing internal tensions and external threats could end up creating risky situations that could rattle the markets. 

Ray Dalio of Bridgewater Associates

Our Methodology 

After analyzing 13F fillings of Dalio’s fund, we chose 12 stocks with strong revenue growth over the past 12 months.

12. Inter Parfums, Inc. (NASDAQ:IPAR)

Percent of Revenue Growth in Past One Year: 31.74%

Bridgewater Associates’ Q3 2023 Stake: $3.18 Million

Number of Hedge Fund Holders: 21

Inter Parfums, Inc. (NASDAQ:IPAR) makes and markets perfumes, scents, and colognes in New York. Its brands are Jimmy Choo, Kate Spade, Abercrombie & Fitch, and GUESS. Inter Parfums, Inc. has risen by 35.23% this year. 

Inter Parfums, Inc.’s revenue was $1.30 billion for the twelve months ending on September 30, 2023, a 31.74% increase from last year, which shows why it is one of the top growth stocks to invest in, as per billionaire Ray Dalio’s Bridgewater Associates. The hedge fund had 23,645 shares of Inter Parfums, Inc. in Q3 2023, valued at $3.18 million. 

11. Enphase Energy, Inc. (NASDAQ:ENPH)

Percent of Revenue Growth in Past One Year: 34.37% 

Bridgewater Associates’ Q3 2023 Stake: $11.17 Million

Number of Hedge Fund Holders: 40

Enphase Energy, Inc. (NASDAQ:ENPH) makes and sells solar home energy solutions in the US and abroad. The company offers microinverters that work at the solar module level, as well as software for energy management.

Enphase Energy, Inc.’s revenue was $2.71 billion for the twelve months ending on September 30, 2023, a 34.37% increase from last year.

ClearBridge SMID Cap Growth Strategy commented on Enphase Energy, Inc. in its Q2 2023 investor letter:

“We exited our position in Enphase Energy, Inc., in the IT sector, which designs, manufactures and sells semiconductor equipment for the residential solar photovoltaic industry. New regulations within California, as well as improving supply chain dynamics in Europe, have placed additional pressure on the company. Facing concerns surrounding weaker US residential demand, decelerating revenue growth trends and falling prices compressing margins, we elected to sell the position and redeploy our assets to other, higher-conviction holdings.”

10. NextEra Energy, Inc. (NYSE:NEE)

Percent of Revenue Growth in Past One Year: 38.12%

Bridgewater Associates’ Q3 2023 Stake: $8.39 Million

Number of Hedge Fund Holders: 58

NextEra Energy, Inc. (NYSE:NEE) is a US energy company that makes and sells electric power from wind, solar, nuclear, coal, and natural gas sources. NextEra Energy, Inc. price has fallen by 28.78% year to date.

A 38.12% revenue growth over the 12 months ended September 2023 underscores why NextEra Energy, Inc. is one of the best growth stocks to buy, according to billionaire Ray Dalio’s Bridgewater Associates.

NextEra Energy, Inc. was highlighted in Carillon Tower Advisers‘ investor letter for the third quarter of 2023. The letter contained the following information:

“NextEra Energy, Inc. traded lower with all utilities during the third quarter as 10-year Treasury yields rose. Investors also began questioning the company’s ability to continue generating strong returns for its renewables development business.”

9. Lamb Weston Holdings, Inc. (NYSE: LW)

Percent of Revenue Growth in Past One Year: 38.91%

Bridgewater Associates’ Q3 2023 Stake: $45.64 Million

Number of Hedge Fund Holders: 46

Lamb Weston Holdings, Inc. (NYSE:LW) is a company that produces, distributes, and markets frozen potato products. Its product line includes frozen potatoes, commercial ingredients, and appetizers under the Lamb Weston Brand. 

Lamb Weston Holdings, Inc. is up by 12% for the year; its revenue for the 12 months ended August was up 38.91% year over year, affirming why it is one of the best growth stocks in Bridgewater Associates portfolio.

Here is what The London Company said about Lamb Weston Holdings, Inc. in its third-quarter 2023 investor letter:

“Lamb Weston Holdings, Inc. – LW underperformed after the company reported lower volumes and provided a cautious outlook. This sparked fears the industry could have too much capacity as volumes slow. However, management has been clear the majority of the lower volume for LW has been intentional by shedding lower margin contracts. On a positive note, the fry attachment rate remained high. We remain attracted to LW’s market share, pricing power, and industry tailwinds.”

8. Alkermes plc (NASDAQ:ALKS)

Percent of Revenue Growth in Past One Year: 40.56%

Bridgewater Associates’ Q3 2023 Stake: $921,557

Number of Hedge Fund Holders: 37

Alkermes plc (NASDAQ:ALKS) is a biopharmaceutical company that makes drugs for neuroscience and oncology patients in the U.S., Ireland, and other countries. Alkermes plc (NASDAQ:ALKS) has risen by 7.53% this year.

Alkermes plc (NASDAQ:ALKS)’s revenue was $1.59 billion for the twelve months ending on September 30, 2023, a 40.56% increase from last year.

7. Arista Networks, Inc. (NYSE:ANET)

Percent of Revenue Growth in Past One Year: 42.37%

Bridgewater Associates’ Q3 2023 Stake: $7.58 Million

Number of Hedge Fund Holders: 59

Arista Networks, Inc. (NYSE:ANET) is a high-growth technology company that develops, markets and sells cloud networking solutions. Its cloud networking solutions include flexible operating systems, network applications, and gigabit Ethernet switches and routers.

Amid growing demand for Arista Networks, Inc.’s cloud solutions, its revenue for the 12 months ended September 2023 was up 42.37%. 

6. Prologis Inc. (NYSE:PLD)

Percent of Revenue Growth in Past One Year: 43.40%

Bridgewater Associates’ Q3 2023 Stake: $1.09 Million 

Number of Hedge Fund Holders: 48

Prologis Inc. (NYSE:PLD) is one of Bridgewater Associates investment plays in the real estate sector. The company is a San Francisco-based real estate investment trust that makes and owns modern, high-quality properties. Prologis Inc. has about 1 billion square feet of warehouses and distribution centers for Amazon, Home Depot, and FedEx. 

Prologis Inc. is up by 4.4% for the year while trading with a price-to-earnings multiple of 37.88. Its revenue for the 12 months that ended September was up 43.40%. The hedge fund increased its stakes in Prologis Inc. by 15% in Q3 2023 to $1.09 million. 

Here is what Baron Real Estate Income Fund said about Prologis, Inc. in its Q2 2023 investor letter:

“The shares of Prologis, Inc., the world’s largest industrial REIT, declined in the third quarter of 2023 along with most REITs. We are big fans of CEO Hamid Moghadam and Prologis’ management team, and we remain optimistic about the company’s long-term growth outlook.

Prologis owns a high-quality real estate portfolio that is concentrated in major global trade markets and large population centers across the Americas, Europe, and Asia. Prologis has an unmatched global platform, strong competitive advantages (scale, data, and technology), and attractive embedded growth prospects. The company is the only industrial REIT with an A credit rating.

We continue to believe the appreciation potential for Prologis shares remains compelling given that the company’s rents on its in-place leases are more than 65% below current market rents, thus providing a strong runway for growth in the next three to five years.”

5. Kinsale Capital Group, Inc. (NYSE:KNSL)

Percent of Revenue Growth in Past One Year: 44.19%
Bridgewater Associates’ Q3 2023 Stake: $1.98 Million
Number of Hedge Fund Holders: 24

Kinsale Capital Group, Inc. (NYSE:KNSL) is a financial services company offering US property and casualty insurance products. Kinsale Capital Group, Inc. markets and sells insurance products in commercial lines, including small business, energy, healthcare, and inland marine, among others.

Kinsale Capital Group, Inc. has gained 26% year to date, trading at a P/E ratio of 28.34. Its revenue growth rate for the 12 months ended September stands at 44.19%. Bridgewater Associates increased its stake in the company by 61% to stakes worth $1.98 million in Q3 2023. 

Here is what Baron Discovery Fund said about Kinsale Capital Group, Inc. in its Q3 2023 investor letter:

“Specialty insurer Kinsale Capital Group, Inc. contributed to performance after reporting consensus-beating quarterly results. Gross written premiums grew 58%, and earnings per share increased 50%. Market conditions remained favorable, with rising premium rates and more business shifting from the standard lines market to the excess and surplus lines market where Kinsale operates. The company is also capitalizing on disruption in the property market, where rates are rising rapidly after years of industry losses and a reduction in reinsurance capacity. We continue to own the stock because we believe Kinsale is well managed and has a long runway for growth in an attractive segment of the insurance market.”

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4. AAON, Inc. (NASDAQ:AAON)

Percent of Revenue Growth in Past One Year: 44.91%
Bridgewater Associates’ Q3 2023 Stake: $1.13 Million
Number of Hedge Fund Holders: 20

AAON, Inc. (NASDAQ:AAON) and its subsidiaries make and sell air conditioning and heating systems in the US and Canada. AAON, Inc. has three segments: AAON Oklahoma, AAON Coil Products, and BASX. The stock has risen by 30.97% this year and trades at price-to-earnings multiple of 31.87.

AAON, Inc.’s revenue was $1.12 billion for the twelve months ending on September 30, 2023, a 44.91% increase from last year.

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3. NVIDIA Corporation (NASDAQ:NVDA)

Percent of Revenue Growth in Past One Year: 57.07%
Bridgewater Associates’ Q3 2023 Stake: $20.923 Million
Number of Hedge Fund Holders: 180

NVIDIA Corporation (NASDAQ:NVDA) is a technology company that designs and develops graphics and networking solutions. The company is best known for developing chips that power data centers, personal computers, and mobile devices. NVIDIA Corporation has significantly improved its fortunes amid solid demand for graphics processing units for powering artificial intelligence solutions.

NVIDIA Corporation is already up by more than 230% for the year, an impressive rally against record earnings and revenues. Its revenue for the 12 months ended October was up 57.07% year over year.

Here is what White Brook Capital said about NVIDIA Corporation in its Q3 2023 investor letter:

“The magnificent seven, that underpin the S&P 500 performance, which includes NVIDIA Corporation, now comprise almost 30% of the market capitalization of the S&P500. At least three of the seven stocks have heightened downside risk and suffer from already high penetration, weakening end markets, competitive risk, and lofty valuation. They have been remarkably resilient to increased interest rates and the potential for slowing growth. Small and midcap stocks, on the other hand, have been systemically penalized by fears of recession and continue to price that eventuality even as significantly better outcomes have become more probable. Today, it’s relatively easy to find attractive investments in this segment.”

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2. Permian Resources Corporation (NYSE:PR)

Percent of Revenue Growth in Past One Year: 63.67%
Bridgewater Associates’ Q3 2023 Stake: $8.79 Million
Number of Hedge Fund Holders: 35

Permian Resources Corporation (NYSE:PR) is a high-growth energy company focusing on developing crude oil and related liquids and natural gas reserves in the US. Over the past 12 months, its revenue has increased by 63.67%, benefiting from high oil and natural gas prices.

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1. e.l.f. Beauty, Inc. (NYSE:ELF)

Percent of Revenue Growth in Past One Year: 70.85%
Bridgewater Associates’ Q3 2023 Stake: $12.07 Million
Number of Hedge Fund Holders: 34

e.l.f. Beauty, Inc. (NYSE:ELF) and its subsidiaries make and sell cosmetic and skin care products under four brands globally. The company has eye, lip, face, paw, and skin care products. e.l.f. Beauty, Inc. is up 129.98% year to date and trades at price-to-earnings multiple of 59.75.

e.l.f. Beauty, Inc.’s revenue was $765.74 million for the twelve months ending on September 30, 2023, a 70.85% increase from last year. Bridgewater Associates increased its stakes in e.l.f. Beauty, Inc. by 12% in Q3 2023 to 109,862, valued at $12.07 million. 

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originally published on Insider Monkey.