Billionaire Ray Dalio’s Top 5 Small-Cap Stock Picks

Page 1 of 5

In this article, we present the list of billionaire Ray Dalio’s top 5 small-cap stock picks. If you want to read our comprehensive analysis of Bridgewater Associates’ history, investment philosophy, and hedge fund performance, go directly to Billionaire Ray Dalio’s Top 10 Small-Cap Stock Picks.

5. Papa John’s International, Inc. (NASDAQ:PZZA)

Value of Bridgewater Associates’ 13F Position: $9.20 million

Number of Hedge Fund Shareholders: 36

Ray Dalio’s Bridgewater Associates has been a shareholder of Papa John’s International, Inc. (NASDAQ:PZZA) since Q2 of 2021 and hiked its stake by another 11% in Q4 to 68,900 shares. The pizza chain is one of the more popular small-cap stocks among hedge funds, is owned by 36 of them at the end of 2021.

One of the 11 Best Delivery Stocks To Buy Now, Papa John’s International, Inc. (NASDAQ:PZZA) grew same-store sales by 11% in North America during Q4, hitting $528.9 million in revenue. That showing came on the heels of a strong Q3 in which systemwide sales also rose by 11%, two-year comps pushed near 30%, and adjusted EPS more than doubled. Papa John’s expects to grow sales again in Q1 despite a tough comp, as it’s coming up against its popular epic stuffed crust pizza launch of a year earlier.

Artisan Partners’ Artisan Small Cap Fund believes the international expansion will continue to drive attractive and sustainable profits for the company, having this to say about Papa John’s International, Inc. (NASDAQ:PZZA) in its Q3 2021 investor letter:

“Papa John’s is a global operator and franchisor of pizza delivery and carryout restaurants. The company is tracking nicely against our turnaround thesis which hinges upon an improvement in store-level economics leading to accelerating growth in restaurant development activity. Improved store-level economics is being driven in part by market share gains resulting from menu innovation. New menu items—parmesan crusted Papadias, Epic Stuffed Crust, Shaq-a-roni— coupled with enhancements to the digital/loyalty platform and supportive advertising are attracting new customers to the brand, increasing frequency of its existing customers and driving higher unit volumes and returns. As a result, the company is experiencing incremental interest from new and existing franchisees to develop new restaurants. Papa John’s opened a record 123 units in the first half of 2021 and now expects to open 220-260 new stores this year (vs. 140-180 previously)—most of which are outside of the US. Combined with ample white space globally, we believe a higher unit growth trajectory will drive an attractive and sustainable profit cycle.”

Page 1 of 5