Billionaire Ray Dalio’s Latest Portfolio Activity
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In the hedge fund world, 13F filing season is here, and we’re bringing you up-to-date coverage of this situation. While hedgies' 13F filings are reported to the SEC with a 45-day delay, this actually improves investors' ability to beat the market because, on average, fund managers are early into their investments. Our research has shown that hedge funds' top consensus picks can beat the market significantly (see the details of our market-beating strategy), so let’s take a look at one particular manager’s latest fourth quarter moves.
With assets under management north of $142 billion, Bridgewater Associates is one of the largest hedge funds in the world. Ray Dalio founded Bridgewater in 1973, and now serves as the fund’s co-CIO, taking the title of “Mentor.” In total, Dalio’s 13F equity portfolio of about $10 billion is rather small in comparison to his total asset base, though it still holds plenty of “monkeying “ material with over 200 stocks.
Last year, Ray Dalio had limited exposure to mining stocks, and two of his only holdings in this space were in Freeport McMoRan Copper & Gold (NYSE: FCX) and Newmont Mining. In the fourth quarter, though, Dalio and his fund upped their exposure significantly, increasing their positions in this duo by an average of 292.3%, while taking new stakes in Barrick Gold, Goldcorp, Yamana Gold, Kinross Gold, Eldorado Gold and Agnico-Eagle Mines.
Including Bridgewater’s new positions in Silver Wheaton and Pan American Silver, which have exposure to gold streams along with their silver assets, the hedge fund’s 13F portfolio now has over $35 million invested in mining stocks. Logically speaking, this bullishness is likely motivated by central banks’ penchant for monetary expansion, though it’s important to note that almost all of the fund’s movement in this space has occurred in the last few months (see what fellow gold bull John Paulson is buying).
At the end of the third quarter, The Chubb Corporation (NYSE: CB) was one of Dalio and Bridgewater’s smallest holdings, accounting for a little over $400,000 worth of its 13F capital. Three months later, however, the insurer has grown to a $7.8 million position in the hedge fund, sitting just outside the top quartile of its portfolio; this 1,685% boost was the largest increase of its kind in the fourth quarter.
After breaking through the $80 mark last October, shares of Chubb experienced a slight sell-off in the face of Hurricane Sandy-related uncertainties. While we are unable to determine exactly when Dalio upped his stake in Chubb, this November swoon may have provided a buying opportunity.
Since the start of 2013, Chubb’s stock price has recovered, rising more than 10%, and now rests just a couple of dollars off its all-time high of $85. The insurer recently beat Wall Street’s fourth quarter earnings expectations, and current-year guidance is 2%-8% higher than analysts’ consensus. A dividend yield north of 1.9% makes Chubb one of just five S&P 500-listed property & casualty insurers to offer a payout above this mark (see all of the hedge funds bullish on Chubb).
The final noticeable trend in Dalio and Bridgewater’s fourth quarter 13F filing was a focus on chip makers. The hedge fund undertook a new $15 million position in Intel (NASDAQ: INTC), while significantly upping its stakes in Broadcom (NASDAQ: BRCM), Qualcomm and Nvidia by an average of 732.5%. Each of these tech companies have gained at least 5% over the past three months (through Valentine’s Day), and Wall Street’s average price target on this quartet represents an upside of nearly 16% from current levels.
It’s also worth mentioning that Intel, Broadcom, Qualcomm and Nvidia each have their fingers in different facets of the budding smart TV industry, and Dalio was curiously increasing his stake in Corning last quarter. Corning is the famed manufacturer of Gorilla, Lotus and Willow Glass, and sitting here in the middle of February, it has seen its stock price rise by more than 17% since mid-November lows.
This article is written by Jake Mann and edited by Meena Krishnamsetty. They don't own shares in any of the stocks mentioned in this article. The Motley Fool recommends Corning and Intel. The Motley Fool owns shares of Corning, Freeport-McMoRan Copper & Gold, and Intel. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!