In this article, we discuss the 11 best growth stocks to buy according to Ray Dalio. If you want to skip our detailed analysis of these stocks, go directly to the 5 Best Growth Stocks To Buy According To Ray Dalio.
Billionaire Ray Dalio founded Bridgewater Associates, one of the most successful hedge funds today with over $15 billion in assets under management, in 1973 when he was still learning the ropes on Wall Street. Over the years, Dalio, whose personal net worth is close to $20 billion, per news publication Forbes, has become one of the prominent names in the finance world through an investment strategy that carefully bets on both value and growth stocks. Between March and June this year, the portfolio value of the fund has jumped by $4 billion.
The top ten holdings comprise 33% of the portfolio with investments concentrated in the consumer goods, technology, and services sectors. The fund, which is based in Connecticut, made new purchases in 329 stocks, bought additional stakes in 255, reduced holdings in 116 stocks, and sold out of 80 equities during the second quarter of 2021, according to the latest 13F filings. Even though he came from humble beginnings, starting out as a caddy, Dalio has a degree from Harvard Business School and has also worked at a commodities firm.
Some of the top growth stocks in the investment portfolio of Bridgewater Associates at the end of the second quarter of 2021 were Micron Technology (NASDAQ:MU), NVIDIA Corporation (NASDAQ: NVDA), and Coupa Software Incorporated (NASDAQ: COUP), among others discussed in detail below. The success of Dalio – since inception, the total returns of his hedge fund have crossed $46 billion in value – has been an exception in the finance world that has struggled to produce more icons like him.
The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021 our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Ray Dalio of Bridgewater Associates
Our Methodology
With this context in mind, here is our list of the 11 best growth stocks to buy according to Ray Dalio. These were picked from the investment portfolio of Bridgewater Associates at the end of the second quarter of 2021.
The analyst ratings of each company are also discussed to provide readers with some more context about their investment decisions.
The hedge fund sentiment around each stock was gauged using the data of 873 hedge funds tracked by Insider Monkey. The list is compiled according to the number of hedge funds having stakes in each firm.
Best Growth Stocks To Buy According To Ray Dalio
11. NetApp, Inc. (NASDAQ:NTAP)
Number of Hedge Fund Holders: 31
NetApp, Inc. (NASDAQ:NTAP) is a California-based company that provides software, systems, and cloud services. It is placed eleventh on our list of 11 best growth stocks to buy according to Ray Dalio. According to the latest filings, Bridgewater Associates owned 88,499 shares in the company at the end of June 2021 worth $7.2 million, representing 0.04% of the portfolio.
On September 9, investment advisory Morgan Stanley maintained an Overweight rating on NetApp, Inc. (NASDAQ:NTAP) stock and raised the price target to $102 from $96, noting that the firm could possibly exceed run-rate targets in the next few years.
Out of the hedge funds being tracked by Insider Monkey, Boston-based investment firm Arrowstreet Capital is a leading shareholder in NetApp, Inc. (NASDAQ:NTAP) with 1.6 million shares worth more than $139 million.
10. ZoomInfo Technologies Inc. (NASDAQ:ZI)
Number of Hedge Fund Holders: 35
ZoomInfo Technologies Inc. (NASDAQ:ZI) is ranked tenth on our list of 11 best growth stocks to buy according to Ray Dalio. The firm owns and operates a cloud-based market intelligence platform and is headquartered in Washington. According to the latest data, Bridgewater Associates owned 9,744 shares in the company at the end of the second quarter of 2021 worth $508,000.
On September 7, investment advisory Stifel maintained a Buy rating on ZoomInfo Technologies Inc. (NASDAQ:ZI) stock and raised the price target to $75 from $70, noting the strong fundamentals performance of the firm.
Out of the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in ZoomInfo Technologies Inc. (NASDAQ:ZI) with 2.6 million shares worth more than $136 million.
Just like Micron Technology (NASDAQ:MU), NVIDIA Corporation (NASDAQ:NVDA), and Coupa Software Incorporated (NASDAQ:COUP), ZoomInfo Technologies Inc. (NASDAQ:ZI) is one of the top growth stocks in the portfolio of Ray Dalio.
9. Zscaler, Inc. (NASDAQ:ZS)
Number of Hedge Fund Holders: 38
Zscaler, Inc. (NASDAQ:ZS) is placed ninth on our list of 11 best growth stocks to buy according to Ray Dalio. The firm markets cloud security services and is headquartered in California. According to 13F filings, Bridgewater Associates owned 45,589 shares in the company at the end of June 2021 worth $9.8 million, representing 0.06% of the portfolio.
On September 10, investment advisory BMO Capital reiterated an Outperform rating on Zscaler, Inc. (NASDAQ:ZS) stock and raised the price target to $315 from $250, highlighting the richer sales mix and growth durability of the firm.
Out of the hedge funds being tracked by Insider Monkey, Boston-based investment firm Arrowstreet Capital is a leading shareholder in Zscaler, Inc. (NASDAQ:ZS) with 1.4 million shares worth more than $318 million.
Along with Micron Technology (NASDAQ:MU), NVIDIA Corporation (NASDAQ:NVDA), and Coupa Software Incorporated (NASDAQ:COUP), Zscaler, Inc. (NASDAQ:ZS) is one of the best growth stocks to buy according to Ray Dalio.
In its Q4 2020 investor letter, Artisan Partners Limited Partnership, an asset management firm, highlighted a few stocks and Zscaler, Inc. (NASDAQ:ZS) was one of them. Here is what the fund said:
“We also exited our investment in Zscaler. Zscaler provides cloudbased Internet security solutions. Cybersecurity remains a top concern for businesses and governments alike as cyberattacks can have devastating financial and reputational consequences. Furthermore, managing the security needs of legacy on-premise applications, a growing number of cloud-based applications (Office 365, Salesforce, etc.) and a remote workforce make operating IT infrastructures increasingly complex. Zscaler’s scalable, cloud-based security platform is a more secure and efficient way to connect users and applications, which eliminates the need for several layers of security (firewalls, VPNs, etc.) developed and built over the last couple of decades. While the pandemic crisis is likely disrupting some areas of Zscaler’s new sales funnel, the company is particularly well-suited to scale and accelerate our market share-gain thesis. Ninety percent of employees are remotely connecting to the enterprise IT network in today’s inverted world, as opposed to prior solutions which are geared to support 10%-20% of workers connecting remotely with the rest connecting from within the walls of a corporate network. Many employees have used traditional VPN connections to log into their networks remotely, but Zscaler’s platform offers a more secure connection without exposing an entire internal network, is easier to configure and is less costly to operate at scale. While the trend toward connecting remote devices over the Internet backbone remains firmly in motion, the stock appreciated over 300% in 2020, quickly outgrowing our small-cap market cap mandate, and we ended our successful campaign.”
8. Teradyne, Inc. (NASDAQ:TER)
Number of Hedge Fund Holders: 44
Teradyne, Inc. (NASDAQ:TER) is a North Reading-based firm that makes and sells automatic testing equipment to the semiconductor industry. It is ranked eighth on our list of 11 best growth stocks to buy according to Ray Dalio. According to regulatory filings, Bridgewater Associates owned 41,550 shares in the company at the end of June 2021 worth $5.5 million, representing 0.03% of the portfolio.
On June 21, investment advisory Evercore maintained an Outperform rating on Teradyne, Inc. (NASDAQ:TER) stock and raised the price target to $175 from $160, noting that the firm remained one of the “top picks” of the advisory.
Out of the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in Teradyne, Inc. (NASDAQ:TER) with 128 million shares worth more than $544 million.
In addition to Micron Technology (NASDAQ:MU), NVIDIA Corporation (NASDAQ:NVDA), and Coupa Software Incorporated (NASDAQ:COUP), Teradyne, Inc. (NASDAQ:TER) is one of the growth stocks favored by billionaire Ray Dalio.
7. Zendesk, Inc. (NYSE:ZEN)
Number of Hedge Fund Holders: 52
Zendesk, Inc. (NYSE:ZEN) is a California-based software development company. It is placed seventh on our list of 11 best growth stocks to buy according to Ray Dalio. According to securities filings, Bridgewater Associates owned 42,206 shares in the company at the end of the second quarter of 2021 worth $6 million, representing 0.06% of the portfolio.
In May, investment advisory UBS upgraded Zendesk, Inc. (NYSE:ZEN) stock to Buy from Hold and raised the price target to $190 from $171, predicting that the firm was capable of returning to an over 30% growth profile.
At the end of the second quarter of 2021, 52 hedge funds in the database of Insider Monkey held stakes worth $1.8 billion in Zendesk, Inc. (NYSE:ZEN), up from 45 in the previous quarter worth $1.4 billion.
Micron Technology (NASDAQ:MU), NVIDIA Corporation (NASDAQ:NVDA), and Coupa Software Incorporated (NASDAQ:COUP) are some of the growth stocks attracting the interest of elite investors, just like Zendesk, Inc. (NYSE:ZEN).
In its Q4 2020 investor letter, Wasatch Ultra Growth Fund, an asset management firm, highlighted a few stocks and Zendesk, Inc. (NYSE:ZEN) was one of them. Here is what the fund said:
“Zendesk, Inc. (ZEN) was also a top contributor. The company provides business software using the software-as-a-service (SaaS) model. Zendesk has experienced strong demand throughout the Covid19 pandemic from customers in e-commerce, as well as from other businesses with employees working from home. Additionally, demand from clients in the travel and hospitality industries has picked up as global economies have begun to reopen. Adjusted earnings per share rose 42% in the company’s most recent quarter on revenue growth of 24% compared to the same quarter a year ago. An improved sales outlook from Zendesk’s management also helped lift the stock.”
6. NXP Semiconductors N.V. (NASDAQ:NXPI)
Number of Hedge Fund Holders: 52
NXP Semiconductors N.V. (NASDAQ:NXPI) is ranked sixth on our list of 11 best growth stocks to buy according to Ray Dalio. The company makes and sells semiconductors and is headquartered in the Netherlands. According to the latest filings, Bridgewater Associates owned 2,084 shares in the company at the end of June 2021 worth $429,000.
On September 3, investment advisory Argus initiated coverage of NXP Semiconductors N.V. (NASDAQ:NXPI) stock with a Buy rating and a price target of $260, noting that the firm was a leading semiconductor supplier to the auto industry.
Out of the hedge funds being tracked by Insider Monkey, Washington-based investment firm Fisher Asset Management is a leading shareholder in NXP Semiconductors N.V. (NASDAQ:NXPI) with 1 million shares worth more than $212 million.
In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and NXP Semiconductors N.V. (NASDAQ:NXPI) was one of them. Here is what the fund said:
“Within IT, we have also increased exposure to a cyclical semiconductor industry currently working through a severe supply shortage due to several years of capacity reductions, COVID-19 shutdowns and one-off production delays as well as demand resilience in areas like autos and smartphones. Two recent additions, specialty semiconductor maker (including) NXP Semiconductors, was among the portfolio’s leading contributors in the first quarter. NXP rose as auto production ramped up and electric vehicle sales continued to expand.”
Click to continue reading and see 5 Best Growth Stocks To Buy According To Ray Dalio.
Suggested Articles:
- 10 Technology Stocks to Buy According to Mario Gabelli
- Cathie Wood Is Selling These 10 Stocks
- 10 Best SPACs to Invest In According to Reddit
Disclosure. None. 11 Best Growth Stocks To Buy According To Ray Dalio is originally published on Insider Monkey.
