In this article, we will take a detailed look at Billionaire Ray Dalio and Insiders Love These 10 Stocks. For a quick overview of such stocks, read our article Billionaire Ray Dalio and Insiders Love These 5 Stocks.
Investors are on tenterhooks before the latest inflation report scheduled to be out on Tuesday. While many believe a more-than-expected uptick in prices could further derail the Fed’s plan of action regarding rate hikes, the bulls believe the market is set for further gains in 2024 and beyond as stocks continue to rage higher and market gains that were once concentrated in a few names are now rewarding other companies as well. A latest Wall Street Journal report cited data from Bespoke Investment Group, which showed that the equal-weighted S&P 500 rose to a record high last week, as about one-fifth of the stocks in the index hit new 52-week highs.
The WSJ report also quoted Joseph Amato, chief investment officer of Neuberger Berman, who said that risky assets could perform well as inflation is coming down and the Fed is “no longer fighting you.”
Market Gains are Broadening Out
Scott Chronert, Citi U.S. equity strategist, who has been bullish on the S&P 500 fundamentals for several weeks now, recently said in a program on CNBC that there is a lot to support his bullish view on the market. The analyst said while the Magnificent Seven group of stocks certainly contributed to the market rally, the “broadening” of the rally to other stocks is also playing a key role in the bull run. Chronert said that after being on the sidelines for most part of 2023, investors are now trying to join the market rally since he believes inflows in ETFs are growing. The analyst also said the generative AI growth drivers are still pulling the Magnificent Seven tech stocks. Chronert expects the S&P 500 to touch 5,700 this year based on his bullish case assumptions.
Methodology
In this backdrop, when market experts are expecting further growth in the stock market, it’s important to see which stocks insiders and hedge funds are buying. For this article we used Insider Monkey’s stock screener to first list down the stocks that have seen heavy insider buying activity over the past few months. From these stocks we selected 10 stocks in which billionaire Ray Dalio’s Bridgewater Associates has stakes, based on the fund’s Q4’2023 portfolio. Some top names in the list are Exxon Mobil Corp (NYSE:XOM), Enphase Energy Inc (NASDAQ:ENPH) and Block Inc (NYSE:SQ). The idea was to find stocks that both Ray Dalio and corporate insiders love. But why is it important to keep tabs on hedge fund activity? Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here).
Billionaire Ray Dalio and Corporate Insiders are Loading Up on These Stocks
10. CNX Resources Corp (NYSE:CNX)
Bridgewater Associates’ Stake: $1,084,440
Bridgewater Associates reported owning a $1 million stake in CNX Resources Corp (NYSE:CNX) as of the end of the fourth quarter of 2023. This was a 68% decline in the fund’s stake in CNX Resources Corp (NYSE:CNX) when compared to the previous quarter. Bernard Lanigan, a board member at CNX Resources Corp (NYSE:CNX), amassed 172,830 shares of CNX Resources Corp (NYSE:CNX) on June 30, 2023, at $21.25 per share. Since then, the stock has gained about 19% in value through March 8. In addition to CNX, hedge funds also like Exxon Mobil Corp (NYSE:XOM), Enphase Energy Inc (NASDAQ:ENPH) and Block Inc (NYSE:SQ).
Longleaf Partners Small-Cap Fund made the following comment about CNX Resources Corporation (NYSE:CNX) in its Q3 2023 investor letter:
“CNX Resources Corporation (NYSE:CNX) – Natural gas company CNX Resources was the top performer in the quarter. The company benefited from rising energy prices, as well as strong operational execution. CNX remains highly discounted, as the market does not give the company credit for its longer-term undrilled assets or its “new technology investments,” which include methods to reduce carbon on a net basis. Management expects this to be a material business for CNX over the longer term, but for now it is a high-quality hidden asset. CNX has taken advantage of the price disconnect through meaningful share repurchase.”
9. Block Inc (NYSE:SQ)
Bridgewater Associates’ Stake: $1,356,719
As of the end of the last quarter of 2023, Ray Dalio’s hedge fund reported owning 17,540 shares of Block Inc (NYSE:SQ). On November 8, Roelof Botha, a board director at the payments company, snapped up 540,646 shares of Block Inc (NYSE:SQ) at $50.89 per share. Since then, the stock has gained about 47% in value as of March 8.
As of the end of the fourth quarter of 2023, 75 hedge funds tracked by Insider Monkey had stakes in Block Inc (NYSE:SQ). The biggest sake in Block Inc (NYSE:SQ) is owned by Catherine D. Wood’s ARK Investment Management which owns a $920 million stake in Block Inc (NYSE:SQ).
Baron Fifth Avenue Growth Fund stated the following regarding Block, Inc. (NYSE:SQ) in its fourth quarter 2023 investor letter:
“During the quarter, we also added to our existing investment in Block, Inc. (NYSE:SQ). The company provides a point-of-sale technology to small businesses and operates the Cash App ecosystem of financial services for individuals. After the company reported solid quarterly result, it has also guided to reach a rule of 40 on GAAP profitability for fiscal year 2026 (implying that the combination of gross profit growth and GAAP operating margins would be at least 40%). We believe Block’s businesses are resilient, and greater management focus on cost discipline should drive further margin expansion over the long term. We also believe that Block has a long runway for growth, durable competitive advantages, and a robust track record of innovation.”
8. Transocean LTD (NYSE:RIG)
Bridgewater Associates’ Stake: $1,741,132
American drilling company Transocean LTD (NYSE:RIG) is a new addition in Ray Dalio’s portfolio since Bridgewater bought $1.7 million worth of Transocean LTD (NYSE:RIG) shares during the last quarter of 2023. On February 27, Frederik Wilhelm Mohn, a director at Transocean LTD’s (NYSE:RIG) board, bought one million shares of Transocean LTD (NYSE:RIG) at $4.89 per share. Since then the stock has gained about 6.6% in value.
7. Keurig Dr Pepper Inc. (NASDAQ:KDP)
Bridgewater Associates’ Stake: $1,907,004
Beverage company Keurig Dr Pepper Inc. (NASDAQ:KDP) ranks seventh in our list of the stocks both Ray Dalio and Insiders love. Keurig Dr Pepper Inc.’s (NASDAQ:KDP) CEO Robert Gamgort on March 5 bought 171,821 Keurig Dr Pepper Inc. (NASDAQ:KDP) shares at $29.10 per share. Two directors at Keurig Dr Pepper Inc.’s (NASDAQ:KDP) board also bought 171,821 shares each at the same price. Since March 5 through market close on March 7 the stock jumped 1.39%.
6. Sarepta Therapeutics Inc (NASDAQ:SRPT)
Bridgewater Associates’ Stake: $2,544,595
Ray Dalio’s Bridgewater decreased its stake Sarepta Therapeutics Inc (NASDAQ:SRPT) by 48% in the fourth quarter of 2023, concluding the year with a $2.5 million stake in the Massachusetts-based medical research and drug development company. Richard Barry, a director at Sarepta Therapeutics Inc’s (NASDAQ:SRPT) board, bought 50,000 shares of Sarepta Therapeutics Inc (NASDAQ:SRPT) on November 3 at $78.81 per share. As of March 7 market close the stock was trading at around $120.78 per share. This shows a whopping 53% increase in stock price. In addition to SRPT, insiders are also piling into Exxon Mobil Corp (NYSE:XOM), Enphase Energy Inc (NASDAQ:ENPH) and Block Inc (NYSE:SQ).
Bronte Capital Amalthea Fund made the following comment about Sarepta Therapeutics, Inc. (NASDAQ:SRPT) in its Q3 2023 investor letter:
“The FDA is widely considered to be the world’s foremost regulator of drug products, with a stringent and rigorous process for evaluating new marketing applications. Disagreements between the FDA and regulators in other developed markets (such as the European Medicines Agency or the Australian Therapeutic Goods Administration (TGA)) are rare, and when they do occur, it is usually because the FDA has taken a more critical view of the applicant’s evidence.
For a drug to be approved in the US, it must meet the statutory requirement of “substantial evidence of effectiveness” under the Federal Food, Drug, and Cosmetic Act. There are essentially three ways to meet this requirement. Normally, the FDA expects the sponsor to succeed in two “adequate and well-controlled studies”. Alternatively, the sponsor can rely on success from a single study if the results from that study are “very persuasive”, or if they are combined with some sort of independent confirmatory evidence. For the most part lobbying from the cohort of patients, the “patient voice”, has played a relatively minor role in the FDA’s decision-making process and the agency has been prepared to make tough but rational decisions when the “substantial evidence” standard is clearly not met.
However, this was not the case in 2016 when the FDA famously overruled its own review team and external advisory committee to approve Sarepta Therapeutics, Inc.’s (NASDAQ:SRPT) controversial drug for Duchenne muscular dystrophy (Exondys 51). At the time, Sarepta had completed a single phase 2 trial in just 12 patients which, per the FDA Commissioner (Robert Califf) himself, had “major flaws” in both its design and conduct. Ellis Unger, director of the Office of Drug Evaluation at the FDA, declared that the drug was a “scientifically elegant placebo”, and that patients and their families were taking on unknown risks for likely non-existent benefits…” (Click here to read the full text)
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Disclosure. None. Billionaire Ray Dalio and Insiders Love These 10 Stocks was initially published on Insider Monkey.
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