Editor’s Note: Related tickers: Microsoft Corporation (NASDAQ:MSFT), Apple Inc. (NASDAQ:AAPL), Oracle Corporation (NASDAQ:ORCL), Intel Corporation (NASDAQ:INTC), EMC Corporation (NYSE:EMC), Lockheed Martin Corporation (NYSE:LMT)
Several weeks after the end of each quarter, hedge funds including billionaire Ray Dalio‘s Briddgewater Associates- which is one of the largest hedge funds in the world- are required to file 13Fs with the SEC, disclosing many of their long positions in U.S. stocks. We process these filings in our database and use the included information to develop investing strategies; we have found, for example, that the most popular small cap stocks among hedge funds generate an average excess return of 18 percentage points per year (learn more about our small cap strategy). Read on for our quick take on the five largest single-stock holdings in Bridgewater’s portfolio as of the end of March or compare the fund’s picks to those in previous filings.
Dalio and his team sold some of their shares of Microsoft Corporation (NASDAQ:MSFT) but the software company remained their largest single-stock holding by market value at 1.4 million shares. Microsoft Corporation (NASDAQ:MSFT) is currently valued at 11 times forward earnings estimates, which actually prices it at a premium to Apple Inc. (NASDAQ:AAPL) on that basis. The company’s financials have been ticking up recently though we would attribute that to the release of Windows 8. In the fourth quarter of 2012, Microsoft Corporation (NASDAQ:MSFT) had just missed being one of the five most popular stocks among hedge funds (see which stocks made the top five).
Bridgewater more than doubled the size of its position in Oracle Corporation (NASDAQ:ORCL) to a total of about 920,000 shares. The third quarter of the enterprise software company’s fiscal year ended in February, with revenue and earnings being essentially flat compared to the same period in the previous fiscal year. The market is pricing in some future growth for Oracle Corporation (NASDAQ:ORCL), however, given the trailing earnings multiple of 16. The Baupost Group, managed by value investor Seth Klarman, cut its stake by 23% in Q4 2012 but still closed December with over 10 million shares (find Klarman’s favorite stocks).
Intel Corporation (NASDAQ:INTC) was another of the fund’s top picks with the filing disclosing ownership of over 1 million shares at the beginning of April (up from aboutn760,000 three months earlier). The decline of PCs has forced Intel Corporation (NASDAQ:INTC) to shift more towards provision of software and services, with somewhat mixed results: revenue fell 3% last quarter compared to the first quarter of 2012, and earnings were down 25%. The stock does merit some attention from income investors, with a dividend yield of 3.7%. Renaissance Technologies, whose founder Jim Simons is now a billionaire, has also had a large position in Intel Corporation (NASDAQ:INTC).