These stocks are owned by Bridgewater Associates.
Ray Dalio's Bridgewater Associates is the largest hedge fund in the world with more than $160 billion in assets, but Bridgewater's performance has been as impressive as its size. In 2018, the firm's flagship Pure Alpha fund gained 14.6%, outperforming both the S&P 500 and the majority of competing hedge funds. The Pure Alpha fund has averaged an annual gain of about 12% since 1991 and has logged just three down years in that stretch. Thanks to quarterly 13-F filings, any investor can track Dalio's latest moves. Here are Bridgewater's eight largest stock holdings.
Biogen (ticker: BIIB)
The majority of Dalio's largest holdings are exchange-traded funds, but biotech stock Biogen is Bridgewater's largest individual stock holding. Biogen develops drugs for treatment of cancer and inflammatory diseases, and its multiple sclerosis business holds about an 18% share of the $18 billion global market. Dalio first bought Biogen shares back in the third quarter of 2014, but he was aggressively adding to his stake in the first quarter of 2019. WhaleWisdom estimates Bridgewater's average price paid for the stake at $246.40 per share. Bridgewater owns 240,378 chares of BIIB stock worth about $56.8 million.
Bristol-Myers Squibb Co. (BMY)
Dalio's second-largest individual stock holding is also in the health care sector. Bristol-Myers Squibb is a pharmaceutical company with a large portfolio, led by immuno-oncology drug Opdivo and cardiovascular drug Eliquis. Dalio started accumulating his stake in Bristol-Myers in the second quarter of 2018 but raised his stake by 78% in the first quarter to 989,293 shares worth about $47.2 million. Investors emulating Dalio should be buying Bristol-Myers on the dip after the stock dropped 22.2% in the past year in part on concerns about opioid litigation.
Alliance Data Systems (ADS)
Alliance Data Systems is the third-largest private label credit card issuer in the U.S. and has 160 retail partnerships and $18 billion in credit card receivables. Alliance also recently sold its Epsilon data marketing business for $4.4 billion. Dalio has owned Alliance since the third quarter of 2015 but cut back his stake significantly in the first quarter to 261,001 shares worth about $45.6 million. Alliance has been far from a home run for Dalio, down 29.9% overall in the past three years. Bridgewater reduced its stake by 47% last quarter.
Eastman Chemical Co. (EMN)
Eastman, a specialty chemical producer, is one of Dalio's most recent stock picks. He first bought shares in the fourth quarter of 2018 before reducing his stake slightly by 3% in the first quarter this year. Bridgewater how holds 600,024 shares of Eastman stock worth about $45.5 million. Eastman has been another 2019 underperformer in the Bridgewater portfolio, dropping 3.6% year-to-date. Investors can now buy shares at a discount to Bridgewater's estimated average price of $73.11.
United Rentals (URI)
United Rentals is the largest equipment rental chain in the world, operating roughly 900 locations in North America. Bridgewater has been a long-term United Rental investor after first buying shares in the second quarter of 2013. Like some of Bridgewater's other top holdings of 2019, United hasn't been a big hit for Dalio, gaining just 10.7% overall in the past five years. Bridgewater cut its stake in United Rentals by 32% in the first quarter, but the fund still holds 375,118 shares worth about $42.8 million.
When it comes to top Bridgewater holdings, it doesn't get more controversial than struggling mall retailer Macy's. The debate rages on Wall Street as to whether Macy's can find a way to modernize its business in the e-commerce era or whether it is doomed to follow the path of Sears. Dalio is betting on a Macy's comeback after the stock tanked 63% in the past five years. Bridgewater has owned Macy's for more than a decade, and the fund tripled its investment in the first quarter to 1.57 million shares worth about $37.1 million.
Nucor Corp. (NUE)
Nucor is one of the largest steel producers in the U.S. Despite U.S. President Donald Trump's trade war tariffs on imported Chinese steel, Nucor has struggled to maintain sales and earnings as the trade war has weighed on global steel demand. Bridgewater has held shares of Nucor since the second quarter of 2017 and it was one of the fund's most aggressive buys in the most recent quarter. Bridgewater raised its Nucor stake by 597% in the first quarter to 635,546 shares worth about $37 million as the trade war ramps up.
Royal Bank of Canada (RY)
The financial sector is by far the most overweight sector in the Bridgewater portfolio. Since the second quarter of 2006, Bridgewater's allocation to the financial sector has consistently grown from around 9.1% to 84.8% today. Most of that exposure comes from ETFs, but Royal Bank of Canada is Bridgewater's largest single financial stock holding. Bridgewater has held shares since the second quarter of 2017, but the fund cut its stake by 18% in the first quarter. Bridgewater now owns 474,832 shares of RY stock worth about $35.8 million.
The Bridgewater Associates stock portfolio:
-- Biogen (BIIB)
-- Bristol-Myers Squibb Co. (BMY)
-- Alliance Data Systems (ADS)
-- Eastman Chemical Co. (EMN)
-- United Rentals (URI)
-- Macy's (M)
-- Nucor Corp. (NUE)
-- Royal Bank of Canada (RY)
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