While investors like Warren Buffett and Carl Icahn make headlines every other day, Ray Dalio shies away from the limelight despite being the manager of the largest hedge fund in the world, Bridgewater Associates, which has more than $120 billion in assets under management. His public equity portfolio, however, accounts for only a fraction of that figure, its value having been pegged at $7.71 billion as of the end of 2015. Having ended 2015 on a dismal note, Mr. Dalio was forced to shake things up, which is reflected in the fund’s latest 13F filing. In this article, however, we’ll take a look at five stocks which Bridgewater Associates has been holding for a long time.
By analyzing the equity portfolios of 780+ top investors, we can see what stocks they are collectively bullish on and use this data to compile a portfolio that can outperform the market. We have determined through this process that the best strategy is to follow the 15 most popular small-cap picks among hedge funds, which have delivered an alpha of around 81 basis points per month in our backtests covering the period between 1999 and 2012 (see more details).
Ray Dalio is fond of Apple Inc. (NASDAQ:AAPL) and believes the stock still has room to grow. Over the previous quarter, his fund’s position in the stock registered a 19% increase to 327,452 shares. Bridgewater Associates’ current position in Apple was opened during the first quarter of 2013, when the stock was trading around the $70 level. Since then, Apple Inc. (NASDAQ:AAPL) shares have surged by more than 50%, having ended yesterday’s trading session at $107.68 per share. One of the most popular stocks among the funds followed by Insider Monkey, Apple Inc. (NASDAQ:AAPL) was held by 133 elite funds at the end of 2015, or 17% of the funds that we track. Chase Coleman, the manager of Tiger Global Management, is very bullish on Apple, having initiated a position during the previous quarter that amounted to 10.6 million shares according to the fund’s latest 13F filing. On the other hand, long-term Apple fan Carl Icahn chose to reduce his stake by 14% over the fourth quarter, with his fund reported ownership of 45.7 million shares as of December 31.
Macy’s, Inc. (NYSE:M) is also among Dalio’s long-term favorites, as this position dates back to the final quarter of 2008. He first bought the stock when it was trading around its all-time low and has enjoyed the great rally that has since ensued. With the stock having suffered a significant correction during the second half of 2015, Dalio used the opportunity to buy on the dip, having increased his position by more than 300%. In its latest 13F filing, Bridgewater Associates indicated ownership of 771,186 Macy’s shares valued at roughly $27 million. Hedge fund sentiment towards Macy’s, Inc. (NYSE:M) plunged during the fourth quarter, as the number of long positions reported by firms that we follow dropping to 51, down by nearly 25% from 67 as of the end of the third quarter. David Einhorn‘s Greenlight Capital holds the largest stake in Macy’s, Inc. (NYSE:M) among the funds that we track, a position initiated during the fourth quarter. The main reason behind the investment is Einhorn’s belief that the company is a potential takeover target for private equity firms and real estate investment trusts, given Macy’s real estate portfolio.
Three more of the billionaire investor’s favorite long-term holdings are discussed on the next page.