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Holly LaFon
Holly LaFon
Articles (9686)  | Author's Website |

Ray Dalio's 5 Largest Stock Buys of 1st Quarter

Bridgewater increases emerging markets and buys many common stocks

Bridgewater Associates, the world’s largest hedge fund, saw 39% turnover in its public equity portfolio with its purchase of 83 stocks in the first quarter.

The Connecticut-based firm, where founder Ray Dalio (Trades, Portfolio) is co-chief investment officer and co-chairman, operates on macroeconomic principles. Its vast portfolio of 303 positions across its strategies remained dominated by exchange-traded funds representing emerging markets and the U.S. market at the end of the quarter. Together, the ETFs encompass more than 60% of holdings. Vanguard FTSE Emerging Markets (VWO) was the largest at 19.17% of holdings after the firm increased the position by almost 45% in the first quarter.

Common stocks make up a smaller portion of the portfolio, with drugmaker Biogen Inc. (NASDAQ:BIIB) holding the largest space at 0.35%. The portfolio also has negligible differences among sector weightings.

Its largest new buys of the first quarter were: Citrix Systems Inc. (NASDAQ:CTXS), TD Ameritrade Holding Corp. (NASDAQ:AMTD), iShares Inc. MSCI Mexico (EWW), Realogy Holdings Corp. (NYSE:RLGY) and AutoNation Inc. (NYSE:AN).

Bridgewater Associates manages roughly $150 billion. In 2018, its Pure Alpha fund outperformed the benchmark index with a 15% gain, while the average hedge fund lost 2%, CNBC reported. The fund reportedly accumulated 12% returns annually in its three decades of operation.

In a March research note titled “Peak Profit Margins? A Global Perspective,” the firm wrote that profit margins may no longer juice stock returns in the future as they had in the past.

“Without that consistent expansion of margins, US equities would be 40% lower than they are today. Margins have been rising for 25 years, and when we look at market pricing, it appears to us that the market is extrapolating further margin gains. The long-term valuation of US equities hinges heavily on what happens to margins going forward: if margin gains can be extrapolated, then valuations look reasonable; if margins stagnate, then valuations are a bit expensive but not terrible; if margins revert toward historical averages, then US equities are highly overvalued,” managers wrote.

Citrix Systems Inc. (NASDAQ:CTXS)

Bridgewater purchased 290,266 shares of Citrix Systems, giving it 0.18% portfolio weight. The stock’s first-quarter share price averaged $104.

Citrix Systems Inc. has a market cap of $12.68 billion; its shares were traded around $96.28 with a price-earnings ratio of 25.75 and price-sales ratio of 4.65. The trailing 12-month dividend yield of Citrix Systems Inc. is 0.73%. The forward dividend yield of Citrix Systems Inc. is 1.46%. Citrix Systems Inc. had an annual average earnings growth of 12.10% over the past 10 years. GuruFocus rated Citrix Systems Inc. the business predictability rank of 3.5-star.

TD Ameritrade Holding Corp. (NASDAQ:AMTD)

Bridgewater purchased 574,854 shares of TD Ameritrade Holding, giving it 0.18% portfolio weight. The stock’s first-quarter share price averaged $54.

TD Ameritrade Holding Corp. has a market cap of $28.5 billion; its shares were traded around $51.51 Wednesday with a price-earnings ratio of 14.52 and price-sales ratio of 5.17. The trailing 12-month dividend yield of Td Ameritrade Holding Corp. is 2.17%. The forward dividend yield of TD Ameritrade Holding Corp. is 2.27%.

iShares Inc. MSCI Mexico (EWW)

Bridgewater purchased 487,976 shares of iShares Inc. MSCI Mexico, giving it 0.13% portfolio weight. The exchange-traded fund’s first-quarter share price averaged $44.

Realogy Holdings Corp. (NYSE:RLGY)

Bridgewater purchased 1,793,024 shares of Realogy Holdings, giving it 0.13% portfolio weight. The stock’s first-quarter share price averaged $16.

Realogy Holdings Corp. has a market cap of $906.850 million; its shares were traded around $7.94 Wednesday with a price-earnings ratio of 10.87 and price-sales ratio of 0.17. The trailing 12-month dividend yield of Realogy Holdings Corp. is 4.53%. The forward dividend yield of Realogy Holdings Corp. is 4.38%. Realogy Holdings Corp. had an annual average earnings growth of 2.10% over the past five years.

AutoNation Inc. (NYSE:AN)

Bridgewater purchased 438,167 shares of AutoNation, giving it 0.10% portfolio weight. The stock’s first-quarter share price averaged $36.

AutoNation Inc. has a market cap of $3.48 billion; its shares were traded around $39.05 Wednesday with a price-earnings ratio of 9.06 and price-sales ratio of 0.17. Autonation Inc. had an annual average earnings growth of 9.10% over the past five years.

See Ray Dalio (Trades, Portfolio)’s portfolio here.

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About the author:

Holly LaFon
I'm a financial journalist with a Master of Science in journalism from Medill at Northwestern University.

Visit Holly LaFon's Website


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