Ray Dalio, a former stock broker, is the founder and CEO of Bridgewater Associates, a successful hedge fund. In fact, LCH Investments reported last month that Bridgewater is now the most profitable hedge fund, making the most money for its investors since its 1975 start with $45 billion, putting George Soros’ Quantum fund at number two. In 2015, Bridgewater generated net gains of $3.3 billion, compared to Quantum’s $0.9 billion.
In the last quarter, the $7.71 billion fund generated a 7.17% return. Some notable companies in Dalio added or reduced in the fourth quarter include: Apple, Inc. (NASDAQ:AAPL), Gilead Sciences, Inc. (NASDAQ:GILD), and Microsoft Corporation (NASDAQ:MSFT).
Dalio increased his holdings in Apple by 19%, now owning over 325,000 shares of the company. In the fourth quarter, analysts were focused on light and/or weak guidance by major chip suppliers such as Dialog Semiconductor and Qorvo, which sparked weak iPhone demand concerns. In its Q4 earnings report, Apple posted better than expected revenues and EPS, but slightly below consensus iPhone and iPad units. Other fourth quarter events included the appointment of new COO Jeff Williams, strong Black Friday sales from retailers such as Best Buy and Target, and the release of a new version of Apple TV.
Dalio’s fourth quarter activity matches analyst consensus, as 32 out of 38 analysts who have rated the company in the past 3 months gave a Buy rating on TipRanks.
Gilead Sciences, Inc.
While Dalio added many shares to his portfolio over the fourth quarter, Gilead Sciences was not one of them. The hedge fund manager reduced his stake in the company by close to 2% in the fourth quarter. In the fourth quarter, the company received FDA approval for drug Letaris, involved in treating pulmonary arterial hypertension, and for Genvoya, a once a day pill that combine’s the company’s 3 existing HIV drugs. The company also posted better than expected revenue and EPS in its Q3 earnings report, marked by $8.2 billion in sales for its Hep C drugs Harvoni and Sovaldi. Gilead entered a ~$2 billion deal with Belgian biotech company Gelapagos to develop drugs which target inflammatory diseases.
The company came under fire in early December, being probed by a U.S. senate committee over its calculated drug prices of Harvoni and Solvaldi, the latter which costs $84,000 per patient for a 12-week regimen. The committee accused the company of putting profits before patients with the outrageously priced Hep C treatments, limiting patient access and imposing very high costs on federal and state health programs. If a patient has Hep C and wants to avoid a liver transplant, it seems he/she must be very wealthy to afford the company’s treatment.
The overwhelmingly majority of experts still say Gilead is a “strong buy.” The average forecast is for the stock to hit $118 in the coming months, according to data compiled TipRanks.
Dalio added shares of another tech stock, Microsoft, to his holdings in the fourth quarter, increasing his stake by 14%. Microsoft had an eventful fourth quarter, starting with the release of its Q1 earnings in October. The company posted better than expected revenues, EPS, and guidance for next quarter, as well as over 50% growth in its cloud services. The company had success with Windows 10, and in the fourth quarter reached 110 million active devices.
Microsoft also partnered with HPE to provide consulting services to customers using Windows 10, acquired game development technology provider Havok from Intel, and launched a fund to bring affordable internet to under-served markets. The company extended its patent license with ASUS, giving the company the ability to install Office and other apps from Microsoft on Android phones. In the fourth quarter, the company jumped on the autonomous driving bandwagon by inking a deal with Volvo to make driver-less cars. Product releases in the fourth quarter include the Surface 4 tablet/laptop, the Lumia 950 smartphone, and an Xbox One update.
Dalio and analysts agree on this tech giant, as 14 out of the 20 analysts who have rated the company in the past 3 months gave a Buy rating according to TipRanks.