Ray Dalio, the founder of Bridgewater Associates, manages one of the most prominent hedge funds, valued at $7.9 billion. In 2014 Dalio was listed as the wealthiest Connecticut resident, with an estimated worth of over $14 billion. Let’s take a closer look at Dalio’s investment style as well as Bridgewater Associates’ recent investment moves in Apple Inc. (NASDAQ:AAPL), Gilead Sciences, Inc. (NASDAQ:GILD), and McDonald’s Corporation (NYSE:MCD).

Bridgewater Associates was founded in 1975. It serves a wide range of institutional clients from pension funds, foreign governments, to central banks. The institution was also the first to make use of the risk premia parity approach, utilizing risk allocation when describing a portfolio of shares rather than capital allocation. Many other financial strategies like currency overlay, separation of beta and alpha strategies, and the absolute return product have also been pioneered by Bridgewater. According to Dalio, his hedge fund uses quantitative models for investing in new opportunities, avoiding unrealistic historical methods, and instead focuses its energy on grouping uncorrelated investments based on risk.

Ray Dalio stat

Apple Inc.

In the first quarter of 2016, Bridgewater Associates reduced its holdings in tech giant Apple by 67%. Now, Dalio’s fund commands 106,000 shares of the company, valued at $11.55 million and comprising just 0.15% of his total portfolio holdings.

Dalio isn’t the first expert to become cautious on Apple. Others have noted that the company is not demonstrating any real growth and reflecting a shrinking market. Apple has traditionally been the epitome of simplicity, but recent developments in its marketing and product strategies seems to tell a different story. In competition with Android devices, Apple is seemingly losing a lot of market share. With a pricing war already here, Apple will face a difficult choice. Expand its product range even more, letting go of its ideology of keeping things simple forever, or keep producing only high-end hardware and eventually end up with a negligible market share. This, together with other factors, can be seen as one of the main reasons why Bridgewater has reduced Apple to a fraction of its original holding.

Despite these new concerns surrounding the company, the majority of analysts remain bullish on the stock. According to TipRanks, 86% of analysts are bullish on Apple, 11% are neutral, and 3% are bearish. The average 12-month price target is $125.32, marking a 28% potential upside.

Gilead Sciences, Inc.

In the first quarter of 2016, Bridgewater altered its investment portfolio by increasing its holdings in the medical company Gilead by 14%. Now, Dalio’s hedge fund’s stake in Gilead is valued at $22.95 million, comprising 0.29% of the overall portfolio.

Gilead has lost some ground in the past month as experts worry that it will no longer lead the market in its hepatitis C franchise due to new competition. The company’s flagship products; Harvoni and Sovaldi, used to rule the market. Recently, Merck and AbbVie have entered the arena with competing products at more affordable prices, worrying analysts that Gilead will lose its competitive edge. However, taking the quantitative approach Bridgewater has, the risk portfolio of GILD is still relatively favorable, and therefore a choice has been made to increase holdings in the company. Many analysts agree with this bullish sentiment, pointing to the company’s diverse pipeline and growing HIV franchise.

According to TipRanks, 57% of analysts are bullish on Gilead while 43% are neutral. The average 12-month price target between these analysts is $114.42, marking a 33% potential upside.

McDonald’s Corporation

Bridgewater Associate has also recently ventured into the fast food industry, adding McDonald’s into its holdings. The hedge fund bought up over 125,000 shares of the iconic fast food company, with its stake now valued at $15.81 million. This comprises 0.20% of Dalio’s overall portfolio.

Many experts lauded McDonald’s earlier this year for its successful turnaround. The company has earned praise from its customers by introducing all-day breakfast and more healthy, customizable meal options as it attempts to shed its unhealthy image.

Although McDonald’s is widely viewed as profiting from royalties and franchise fees, it is also nestled deeply in the real estate market, with about 15% of restaurants being owned by the corporation itself and rented to franchisees. Dividends have also ever been increasing. Acquiring a stake in this could therefore be viewed as a sound financial decision.

According to TipRanks, 55% of analysts are bullish on McDonald’s, 39% are neutral, and 6% are bearish. The average 12-month price target between these analyst sis $133.36, marking a 10% potential upside.