Founded in 1973 by Ray Dalio, Bridgewater Associates is the largest hedge fund in the world, overseeing more than $212 billion worth of assets. Bridgewater is a global macro firm that employs fundamental analysis and invests in equity and debt markets around the world. It is also reported that the firm accepts fund from institutional investors only. In 2011 Dalio stepped down as CEO of the firm but still plays an active role in the management of assets. At the end of the first quarter, Bridgewater’s equity portfolio carried an estimated value of 7.89 billion and has a massive exposure to financial stocks, which accounted for 81% of the portfolio. Still, the fund’s top equity positions are from the technology sector.
While there are many metrics that investors can assess in the investment process, hedge fund sentiment is something that is often overlooked. However, hedge funds and other institutional investors allocate significant resources while making their bets and their long-term focus makes them the perfect investors to emulate. This is supported by our research, which determined that following the small-cap stocks that hedge funds are collectively bullish on can help a smaller investor beat the S&P 500 by around 95 basis points per month (see more details here).
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Big Surge In ADS Ownership
Bridgewater Associates’ holding of Alliance Data Systems Corporation (NYSE:ADS) stock went up by more than 300% during the first quarter. As reported in its latest 13F filing, the fund holds 108,164 shares valued at $23.8 million. Steve Cohen shares the same enthusiasm for Alliance Data Systems Corporation (NYSE:ADS), having also increased his bet on this stock during the quarter. His family office fund, Point72 Asset Management, reportedly holds 269,100 shares worth $59.2 million. At the end of April, Alliance Data Systems reported first quarter results that exceeded market’s expectations. The company posted a profit of $157.1 million or $3.84 per share when accounted for one time gains and costs, while analysts had projected $3.80 per share. Revenues came in at $1.68 billion, in line with expectations. Alliance Data Systems Corporation (NYSE:ADS) is trading at a P/E ratio of 24, below the industry average of 37 as reported by Yahoo! Finance.