Billionaire Ray Dalio Loads Up On Lyondell, Mining Stocks in Q2

Billionaire Ray Dalio, who calls himself “a professional mistake maker,” runs the world’s biggest hedge fund firm, Bridgewater Associates. The Connecticut-based asset manager was founded in 1975 out of a two-bedroom apartment and currently manages approximately $150 billion in global investments for various institutional clients, including foreign governments and central banks, corporate and public pension funds, university endowments, and charitable foundations.

Bridgewater Associates represents the biggest hedge fund vehicle on the planet and also runs the two largest individual hedge funds in the world, Pure Alpha and All Weather. The asset manager’s flagship Pure Alpha fund, which makes broad bets on global economic trends, was down by 12% in the first half of 2016 – the fund’s worst first-half performance in more than 20 years. Meanwhile, the hedge fund’s All Weather fund, which is said to “perform well across all environments,” returned an impressive 10% in the first half of the year. Ray Dalio was the third-highest earning hedge fund manager in 2015, as he took home $1.4 billion, so retail investors should definitely look at his firm’s quarterly moves for inspiration. Hence, the following article will lay out several noteworthy plays made by Bridgewater Associates during the second quarter of 2016.

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#5. Silver Wheaton Corp. (USA) (NYSE:SLW)

– Shares Owned by Bridgewater Associates (as of June 30): 845,201

– Value of Bridgewater Associates’ Holding (as of June 30): $19.89 Million

Bridgewater Associates boosted its position in Silver Wheaton Corp. (USA) (NYSE:SLW) by 79% during the second quarter of 2016, to 845,201 shares. The increased position was valued at $19.89 million at the end of June. The shares of the largest pure precious metal streaming company in the world have gained 142% since the beginning of 2016. Silver Wheaton’s second quarter revenue was $212 million, on sales volume of 7.1 million ounces of silver and 79,800 ounces of gold. The company’s top-line grew by 29% year-over-year, reflecting a 28% increase in the number of silver ounces sold, a 16% increase in the number of gold ounces sold, as well as higher realized prices for both metals. Earlier this month, Silver Wheaton agreed to acquire the rights to an additional 25% of the Salobo mine’s gold production from Rio de Janeiro-based Vale SA (ADR) (NYSE:VALE) for an upfront payment of $800 million, expanding a 2013 streaming deal that already included 50% of the mine’s gold output. David Iben’s Kopernik Global Investors reported owing 1.61 million shares of Silver Wheaton Corp. (USA) (NYSE:SLW) in its 13F filing for the second quarter.

#4. Agnico Eagle Mines Ltd (USA) (NYSE:AEM)

– Shares Owned by Bridgewater Associates (as of June 30): 459,027

– Value of Bridgewater Associates’ Holding (as of June 30): $24.56 Million

The world’s biggest hedge fund firm added 204,100 shares of Agnico Eagle Mines Ltd (USA) (NYSE:AEM) to its holding during the April-to-June period, finishing the second quarter with 459,027 shares valued at $24.56 million. The Canadian gold mining company has mines located in Canada, Mexico and Finland, but also has exploration and development activities in each of those countries, as well as in the U.S. and Sweden. The Toronto-based company has the highest gross margin among major producers and also represents the only major gold miner to expand its margin over the past five years. As gold prices gained ground due to global economic-growth concerns and expectations that the Federal Reserve will increase interest rates at a slower-than-previously-anticipated pace, the shares of Agnico Eagle Mines have jumped by 124% in 2016. Royce & Associates, founded by Chuck Royce, owns 84,000 shares of Agnico Eagle Mines Ltd (USA) (NYSE:AEM) as of June 30.

The second page of this article will reveal three other major moves completed by Bridgewater Associates during the June quarter.

#3. LyondellBasell Industries NV (NYSE:LYB)

– Shares Owned by Bridgewater Associates (as of June 30): 353,116

– Value of Bridgewater Associates’ Holding (as of June 30): $26.28 Million

The Connecticut-based hedge fund vehicle had 353,116 shares of LyondellBasell Industries NV (NYSE:LYB) in its portfolio at the end of the June quarter, a whopping 253,400 shares more than it did at the end of the March quarter. The boosted stake was worth $26.28 million on June 30. The Dutch chemicals and polymer producer, which emerged from bankruptcy in 2010, has seen the value of its stock decline by 14% since the start of the year. The company’s second quarter revenue decreased by $1.82 billion year-over-year to $7.33 billion, reflecting lower average sales prices due to decreases in the prices of crude oil and other feedstocks. However, LyondellBasell’s cost of sales for the quarter decreased by 19% year-over-year due to the same declines in some feedstocks and energy costs. There were 54 hedge funds followed by Insider Monkey with long positions in LyondellBasell at the end of the March quarter, which accumulated 6% of the company’s outstanding shares. Iridian Asset Management, founded by David Cohen and Harold Levy, has 4.05 million shares of LyondellBasell Industries NV (NYSE:LYB) among its holdings as of the end of the second quarter.

#2. Goldcorp Inc. (USA) (NYSE:GG)

– Shares Owned by Bridgewater Associates (as of June 30): 1.72 Million

– Value of Bridgewater Associates’ Holding (as of June 30): $32.89 Million

The $150 billion hedge fund firm increased its exposure to Goldcorp Inc. (USA) (NYSE:GG) by 78% during the three-month period ended June 30, to 1.72 million shares. The reshuffled position was valued at $32.89 million at the end of June. The senior gold producer has lagged peers thus far in 2016, with its shares gaining “only” 64% year-to-date. The world’s third-largest bullion producer by market value recently reported a second quarter net loss that missed analysts’ expectations, as output declined and costs increased more than anticipated. Goldcorp embarked on a company-wide program to optimize all areas of its business during the second quarter, with the aim of achieving $250 million in sustainable annual efficiencies by 2018. The number of hedge funds invested in Goldcorp rose to 33 from 25 during the March quarter. Robert B. Gillam’s McKinley Capital Management reported owning 1.88 million shares of Goldcorp Inc. (USA) (NYSE:GG) through the latest round of 13F filings.

#1. Barrick Gold Corporation (USA) (NYSE:ABX)

– Shares Owned by Bridgewater Associates (as of June 30): 2.11 Million

– Value of Bridgewater Associates’ Holding (as of June 30): $45.11 Million

Barrick Gold Corporation (USA) (NYSE:ABX) was the sixth-largest position and the largest equity position (excluding positions in ETFs and other instruments) in Bridgewater Associates’ pool of holdings at the end of June. The Connecticut-based asset manager upped its stake in Barrick by 74% during the April-to-June period, to 2.11 million shares. The world’s largest gold miner reported revenue of $2.01 billion for the second quarter, down from $2.23 billion posted a year prior. Meanwhile, the company’s second quarter cash flow increased to $527 million from $525 million year-over-year despite registering lower production as a result of non-core asset sales. Barrick plans to reduce its debt load by at least $2 billion in 2016, with nearly half of the debt reduction target being met already. As a result, the company has less than $150 million in debt due before 2018 and approximately $5 billion of its $9 billion debt load does not mature until after 2032. Barrick shares are 194% in the green year-to-date. Kopernik Global Investors owns 2.56 million shares of Barrick Gold Corporation (USA) (NYSE:ABX) as of June 30.

Disclosure: None