Billionaire Ray Dalio’s Bridgewater Associates and Cathie Wood’s ARK Invest follow sharply different investment philosophies. Bridgewater generally runs a diversified, macro-driven portfolio that balances exposure across assets, countries and economic environments. ARK concentrates on companies it believes can benefit from disruptive innovation.
Still, Insider Monkey’s analysis of their second-quarter 13F filings shows that the two firms shared exposure to several stocks. Among the largest common holdings were Eli Lilly (LLY) and Nvidia (NVDA).
Bridgewater held 87,023 Eli Lilly shares worth about $104.4 million at the end of the second quarter, after increasing its position by 16,211 shares. ARK held 77,254 shares valued at about $92.7 million, after adding 64,578 shares.
Bridgewater’s Nvidia stake was much larger, comprising 3.87 million shares worth about $773.6 million. However, it reduced the position by 826,808 shares during the quarter. ARK moved in the other direction, adding 345,821 Nvidia shares to end the quarter with 1.38 million shares valued at about $276.4 million.
Let’s focus on LLY.
Zooming In On LLY
Lilly bulls believe the stock is positioned for continued growth as its obesity and diabetes franchise expands, led by Mounjaro and Zepbound. The company’s revenue climbed 48% year over year in the second quarter, driven by strong demand for the two medicines. Bulls believe this growth can support earnings expansion for years as the company continues to benefit from the large and growing market for diabetes and weight-loss treatments.
However, bears believe much of that opportunity is already reflected in Lilly’s share price. The stock trades at a forward non-GAAP P/E of 30.39, a 61.25% premium to the healthcare sector median of 18.85. Its trailing non-GAAP P/E of 35.43 is also about 94% above the sector median. The valuation is less demanding on a growth-adjusted basis, with Lilly’s forward non-GAAP PEG ratio of 1.44 below the sector median of 1.79. Still, bears argue that the premium leaves the stock vulnerable if Mounjaro and Zepbound sales growth begins to normalize after the initial GLP-1 boom.
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