When billionaire Ray Dalio left his empire Bridgewater Associates in 2022, the inflation storm and economic uncertainties were pummeling the financial markets. While the fund had started 2022 on a positive note, its returns came crashing down it the last quarter of the year. According to a Bloomberg report, The Pure Alpha fund of Bridgewater fell about 13% in Q4’2022 through November. Bridgewater’s Pure Alpha II fund also fell a whopping 20% in the two months through the end of November 2022. Over the past four years, Bridgewater’s Pure Alpha fund declined by 4%. In 2023, the Pure Alpha fund fell 7.6%, while the hedge fund industry’s average return in 2023 through November was 4.35%, with many top hedge funds in the league of Bridgewater (Ken Griffin’s Citadel, for example) posting double-digit returns.
Billionaire Ray Dalio’s Bridgewater 2024 Returns So Far
But what about Ray Dalio’s Bridgewater returns in 2024? Ray Dalio gave reins of the fund to a younger management, who had plans to turn things around by cutting costs and restructuring. So far the strategy seems to be working. In April, Bloomberg reported that Bridgewater’s flagship Pure Alpha fund has rebounded a whopping 16% this year.
Dalio’s All Weather Strategy is Under The Weather
Bridgewater’s All Weather investing strategy developed by Ray Dalio seems to be facing problems in the current market environment, latest reports show.
But what is this All Weather strategy? Bridgewater explains:
“I developed a modus operandi to expect surprises. I learned not to let my experiences dominate my thinking; I could go beyond my experiences to see how the machine works.” Ray realized he could understand the economic machine by breaking down economies and markets into their component pieces, and studying the relationships of these pieces through time. This type of thinking is central to All Weather.”
But data shows that risk parity funds have trailed traditional 60/40 portfolios since 2019. A Bloomberg report said that pension funds are pulling billions from risk parity funds. One of the biggest reasons why risk parity funds saw losses is rising interest rates. When the Fed started increasing rates, volatility surged past these risk parity funds’ acceptable levels and bonds fell to unforeseen levels.
In this backdrop, we decided to take a look at some technology stocks billionaire Ray Dalio’s Bridgewater was selling in the first quarter of 2024. While the fund sold many tech stocks in the first quarter, overall, its portfolio allocation to tech jumped to 17% as of the end of March from just 7% in the previous quarter. Some top names in the portfolio are NVIDIA Corp (NASDAQ:NVDA), Alphabet (NASDAQ:GOOG) and Meta Platforms Inc (NASDAQ:META).
In this article we take a look at 5 stocks Bridgewater sold off completely or reduced its stake in during the March quarter. To see more tech stocks Bridgewater sold off in Q1 2024, click 4 Tech Stocks Ray Dalio is Selling in 2024.
BILL Holdings, Inc. (NYSE:BILL)
Number of Hedge Fund Holders: 49
Billionaire Ray Dalio’s Bridgewater Associates sold all 20,844 shares of the financial software company BILL Holdings, Inc. (NYSE:BILL) during the first quarter of 2024. Over the past one year BILL Holdings, Inc. (NYSE:BILL) shares have gained about 40%. BILL Holdings, Inc. (NYSE:BILL) recently posted fiscal Q3 results. Adjusted EPS in the period came in at $0.60, beating estimates by $0.07 per share. Revenue in the quarter jumped 18.5% year over year to $323 million, beating estimates by $16.86 million.
While Dalio’s fund is selling BILL, it’s buying major companies like NVIDIA Corp (NASDAQ:NVDA), Alphabet (NASDAQ:GOOG) and Meta Platforms Inc (NASDAQ:META).
Cisco Systems, Inc. (NASDAQ:CSCO)
Number of Hedge Fund Holders: 60
Bridgewater Associates cut its stake in Cisco Systems, Inc. (NASDAQ:CSCO) by 94% in the first quarter of 2024. The fund still owns 118,397 shares of Cisco Systems, Inc. (NASDAQ:CSCO) as of the end of March.
Hewlett Packard Enterprise Company (NYSE:HPE)
Number of Hedge Fund Holders: 50
Like HP Inc. (NYSE:HPQ), Hewlett Packard Enterprise Company (NYSE:HPE) was also dumped by Bridgewater in the first quarter, as the fund sold 560,336 shares of the company. HP Inc. (NYSE:HPQ) shares have gained about 23% over the past one year.
Of the 933 hedge funds tracked by Insider Monkey, 50 hedge funds had stakes in HP Inc. (NYSE:HPQ) as of the end of the March quarter.
HP Inc. (NYSE:HPQ)
Number of Hedge Fund Holders: 50
HP Inc. (NYSE:HPQ) is in the spotlight as analysts expect PC demand to remain upbeat amid an AI-driven refresh cycle. Market data firm Canalys recently said that about 18% of total personal computer shipments globally will be AI-capable PCs. The firm also estimates that 48 million AI-capable PCs will be shipped this year.
However, Ray Dalio’s hedge fund dumped 77% of its stake in HP Inc. (NYSE:HPQ) in the first quarter of 2024.
Dalio’s fund is selling HP but it’s holding on to its huge stakes in companies like NVIDIA Corp (NASDAQ:NVDA), Alphabet (NASDAQ:GOOG) and Meta Platforms Inc (NASDAQ:META).
Greenlight Capital mentioned HP Inc. (NYSE:HPQ) in its Q1 2024 investor letter. Here is what the firm has to say:
“The title of our Sohn presentation was “Solve AI,” which was a play on Solvay’s corporate name. Nonetheless, we established another new long position that actually stands to benefit from AI, which we believe is not reflected in the current stock price. HP Inc. (NYSE:HPQ) sells computers, printers and adjacent products and supplies. We established an initial position at an average price of $30.76 per share, which is about 9x current year earnings estimates. Recent results reflect a two-and-a-half-year cyclical downturn in demand for computers, which followed a mini-boom driven by COVID and related demand for equipment to work-from-home. We believe that we are, at a minimum, on the cusp of a normal PC refresh cycle, which should drive earnings above estimates. HPQ has committed to return 100% of free cash flow to shareholders through buybacks and dividends. The shares have a 3.6% dividend yield and we estimate HPQ has the capacity to buy back 25-30% of the outstanding shares over the next three years. (Click here to read)
QUALCOMM Incorporated (NASDAQ:QCOM)
Number of Hedge Fund Holders: 78
Ray Dalio’s Bridgewater Associates cut its stake in QUALCOMM Incorporated (NASDAQ:QCOM) by 90% in the first quarter of 2024, selling about 68,000 shares of the company in the period. The fund still owns 7481 shares of QUALCOMM Incorporated (NASDAQ:QCOM). Latest reports suggest QUALCOMM Incorporated (NASDAQ:QCOM) is partnering with semiconductor startup Ampere Computing to develop energy efficient AI chips.
Madison Investments mentioned QUALCOMM Incorporated (NASDAQ:QCOM) in its Q4 2023 investor letter. Here is what the firm has to say:
“QUALCOMM Incorporated (NASDAQ:QCOM) also reported a solid fourth fiscal quarter with better than expected results. The company guided the first quarter ahead of expectations despite headwinds from Samsung as the inventory headwinds dissipate. Qualcomm remains well positioned in the mobile handset market and should benefit as Artificial Intelligence moves to edge devices which could drive an upgrade cycle.”
Ray Dalio sold many more tech stocks in Q1’2024.
Click to see 4 More Tech Stocks Billionaire Ray Dalio is Selling in 2024.
If you are looking for an AI stock that is as promising as Microsoft but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. Billionaire Ray Dalio is Selling These Tech Stocks in 2024 was originally published on Insidermonkey.com