Below we present the list of Top 5 Stocks Billionaire Ray Dalio Just Bought. For more background on Ray Dalio and some of his other top stock picks, check out Top 10 Stocks Billionaire Ray Dalio Just Bought.
- PepsiCo, Inc. (NASDAQ:PEP)
Ray Dalio’s Bridgewater Associates opened large stakes in each of the two soft drink giants during Q3, beginning with PepsiCo, Inc. (NASDAQ:PEP), in which the fund bought 693,736 shares valued at $96.15 million at the end of September. 53 of the select group of high performing hedge funds tracked by Insider Monkey were long PEP shares on June 30, down from over 60 at the end of Q3 2019.
Bridgewater has to be pleased with Pepsi’s Q3 results released on October 1, which showed the beverage giant has returned to profitability and revenue growth. The former metric rose by 6.4% to $1.66 per share, while the latter increased by 5.3% to $18.1 billion. Pepsi also ate into rival Coca-Cola’s market share, as its beverage volumes rose by 1% during the quarter, while Coke’s fell by 6%.
- Johnson & Johnson (NYSE:JNJ)
665,402 shares of Johnson & Johnson (NYSE:JNJ) were purchased by Bridgewater Associates during Q3, giving the firm a JNJ position valued at $99.07 million on September 30. One of the most profitable companies in the world and a longtime holding of Warren Buffett, JNJ ranked as one of the 30 Most Popular Stocks Among Hedge Funds at the end of June.
Despite its profitability, JNJ does have some headwinds facing it, including ongoing lawsuits, biosimilar competition and a Covid-induced decline in the sales of its medical devices, which were down by 32.7% year-over-year in Q2, which improved to a 3.9% decline in Q3. Some of that explains why the stock has underperformed this year, posting 2.69% gains. On the positive side, JNJ has a robust development pipeline that has borne significant fruit over the past few years and should continue to do so in the future.
- The Coca-Cola Company (NYSE:KO)
Dalio took a slightly larger position in The Coca-Cola Company (NYSE:KO) during Q3 than in rival Pepsi, building a KO position valued at $100.28 million on September 30 which contained 2.03 million Coca-Cola shares. One of the 5 Food and Service Industry Stocks That Thames Capital Has Been Gorging On, Coca-Cola shares were owned by 59 of the hedge funds tracked by Insider Monkey on June 30, making it slightly more popular than Pepsi.
While Coca-Cola had its market share eaten into (or rather, drank up) by Pepsi, it does maintain several advantages over its bitter rival, including far more free cash flow generation ($5.5 billion to $4.1 billion in Q3, though the gap is closing). Coca-Cola has also been effective at cutting costs during the pandemic, which lead to a 2.3 percentage point rise in adjusted operating profit during Q3, to 30.4%.
- The Procter & Gamble Company (NYSE:PG)
Dalio went big on two consumer staples stocks to round out his ten biggest new stock buys of Q3, beginning with a $170.33 million position in The Procter & Gamble Company (NYSE:PG), amounting to 1.23 million shares. PG shares were in the 13F portfolios of 73 of the hedge funds tracked by Insider Monkey on June 30.
Consumer staples stocks tend to perform well even during difficult economic stretches and that’s certainly been true for Procter and Gamble. The company’s fiscal 2020 year, which wrapped up at the end of June, was a success, as PG enjoyed a 5% sales increase to $71 billion. It performed even better in the first quarter of its fiscal 2021 year, as sales rose by 9% year-over-year, with the U.S and Chinese markets posting double-digit sales increases.
As Distillate Capital noted in its Q2 investor letter, PG is one of the rare stocks that has actually been able to improve its free cash yield this year, whether based on the fund’s standard methodology, or next-twelve-months estimates.
- Walmart Inc. (NYSE:WMT)
Topping the list of Dalio’s new stock picks is Walmart Inc. (NYSE:WMT), which Bridgewater bought 1.39 million shares of during the September quarter, building a position valued at $195.06 million. That vaulted Walmart straight into second spot among Bridgewater’s most valuable stock picks, where it trailed only Alibaba Group Holding Limited (NYSE:BABA).
Walmart is taking the fight to Amazon.com, Inc. (NASDAQ:AMZN) with its Walmart+ delivery service, which has already been subscribed to by 11% of American consumers according to a Piplsay Research poll of 20,179 Americans. Furthermore, 19% of those subscribers migrated to the service from Amazon Prime. With its huge advantage in number of physical locations and its ability to deliver perishable food items, Walmart could quickly eat into Amazon’s seemingly unassailable e-commerce position. Walmart’s e-commerce revenue surged by 94% year-over-year during its fiscal Q2.
For more timely stock picks from the world’s greatest investors, don’t miss the Top 10 Stocks Billionaire George Soros Just Bought.
Disclosure: None.
