In this piece, we will take a look at the 12 best growth stocks to buy according to billionaire Ray Dalio’s Bridgewater Associates. If you want to see more stocks in this selection, then take a look at 5 Best Growth Stocks to Buy According to Billionaire Ray Dalio’s Bridgewater Associates.
Since founding Bridgewater Associates in 1975, Ray Dalio has earned his status as one of the most respected investors. The hedge fund has become the largest in the highly competitive industry, with over $90 billion in assets under management.
Bridgewater Associates was one of the few hedge funds that successfully navigated the 2008 financial crisis, with its main fund rising 9% even as the S&P 500 plunged 37%.
Bridgewater Associates’ investment engine has always been a collection of hundreds of signals or quantitative indicators that provided insights on when the market was due to rise or fall. Details of the signals or the approaches leveraged have always remained a closely guarded secret, with Dalio reiterating the need to safeguard their competitive edge in the industry. The hedge fund performance has always asserted Dalio’s stock’s picking edge, as depicted by the fund’s flagship Pure Alpha 11 fund, delivering average annual returns of 11.4% between 1991 and 2022. As the overall hedge fund sector would come under pressure in 2018, going down by an average of 6.7%, Bridgewater Associates generated a 14.6% return.
Dalio has stepped down from the day-to-day running of Bridgewater Associates in 2022 but he continues to play an active role while mentoring the current portfolio managers.
Recently, Dalio has raised concerns over the valuation levels in the equity market. Dalio has also warned that the US faces a severe political and economic crisis exacerbated by the rising interest rates. The legendary investor fears that growing internal tensions and external threats could end up creating risky situations that could rattle the markets.
Ray Dalio of Bridgewater Associates
Our Methodology
After analyzing 13F fillings of Dalio’s fund, we chose 12 stocks with strong revenue growth over the past 12 months.
12. Inter Parfums, Inc. (NASDAQ:IPAR)
Percent of Revenue Growth in Past One Year: 31.74%
Bridgewater Associates’ Q3 2023 Stake: $3.18 Million
Number of Hedge Fund Holders: 21
Inter Parfums, Inc. (NASDAQ:IPAR) makes and markets perfumes, scents, and colognes in New York. Its brands are Jimmy Choo, Kate Spade, Abercrombie & Fitch, and GUESS. Inter Parfums, Inc. (NASDAQ:IPAR) has risen by 35.23% this year.
Inter Parfums, Inc. (NASDAQ:IPAR)’s revenue was $1.30 billion for the twelve months ending on September 30, 2023, a 31.74% increase from last year, which shows why it is one of the top growth stocks to invest in, as per billionaire Ray Dalio’s Bridgewater Associates. The hedge fund had 23,645 shares of Inter Parfums, Inc. (NASDAQ:IPAR) in Q3 2023, valued at $3.18 million.
11. Enphase Energy, Inc. (NASDAQ:ENPH)
Percent of Revenue Growth in Past One Year: 34.37%
Bridgewater Associates’ Q3 2023 Stake: $11.17 Million
Number of Hedge Fund Holders: 40
Enphase Energy, Inc. (NASDAQ:ENPH) makes and sells solar home energy solutions in the US and abroad. The company offers microinverters that work at the solar module level, as well as software for energy management.
Enphase Energy, Inc. (NASDAQ:ENPH)’s revenue was $2.71 billion for the twelve months ending on September 30, 2023, a 34.37% increase from last year.
ClearBridge SMID Cap Growth Strategy commented on Enphase Energy, Inc. (NASDAQ:ENPH) in its Q2 2023 investor letter:
“We exited our position in Enphase Energy, Inc. (NASDAQ:ENPH), in the IT sector, which designs, manufactures and sells semiconductor equipment for the residential solar photovoltaic industry. New regulations within California, as well as improving supply chain dynamics in Europe, have placed additional pressure on the company. Facing concerns surrounding weaker US residential demand, decelerating revenue growth trends and falling prices compressing margins, we elected to sell the position and redeploy our assets to other, higher-conviction holdings.”
10. NextEra Energy, Inc. (NYSE:NEE)
Percent of Revenue Growth in Past One Year: 38.12%
Bridgewater Associates’ Q3 2023 Stake: $8.39 Million
Number of Hedge Fund Holders: 58
NextEra Energy, Inc. (NYSE:NEE) is a US energy company that makes and sells electric power from wind, solar, nuclear, coal, and natural gas sources. NextEra Energy, Inc. (NYSE:NEE) price has fallen by 28.78% year to date.
A 38.12% revenue growth over the 12 months ended September 2023 underscores why NextEra Energy, Inc. (NYSE:NEE) is one of the best growth stocks to buy, according to billionaire Ray Dalio’s Bridgewater Associates.
NextEra Energy, Inc. (NYSE:NEE) was highlighted in Carillon Tower Advisers‘ investor letter for the third quarter of 2023. The letter contained the following information:
“NextEra Energy, Inc. (NYSE:NEE) traded lower with all utilities during the third quarter as 10-year Treasury yields rose. Investors also began questioning the company’s ability to continue generating strong returns for its renewables development business.”
9. Lamb Weston Holdings, Inc. (NYSE: LW)
Percent of Revenue Growth in Past One Year: 38.91%
Bridgewater Associates’ Q3 2023 Stake: $45.64 Million
Number of Hedge Fund Holders: 46
Lamb Weston Holdings, Inc. (NYSE:LW) is a company that produces, distributes, and markets frozen potato products. Its product line includes frozen potatoes, commercial ingredients, and appetizers under the Lamb Weston Brand.
Lamb Weston Holdings, Inc. (NYSE:LW) is up by 12% for the year; its revenue for the 12 months ended August was up 38.91% year over year, affirming why it is one of the best growth stocks in Bridgewater Associates portfolio.
Here is what The London Company said about Lamb Weston Holdings, Inc. (NYSE:LW) in its third-quarter 2023 investor letter:
“Lamb Weston Holdings, Inc. (NYSE: LW) – LW underperformed after the company reported lower volumes and provided a cautious outlook. This sparked fears the industry could have too much capacity as volumes slow. However, management has been clear the majority of the lower volume for LW has been intentional by shedding lower margin contracts. On a positive note, the fry attachment rate remained high. We remain attracted to LW’s market share, pricing power, and industry tailwinds.”
8. Alkermes plc (NASDAQ:ALKS)
Percent of Revenue Growth in Past One Year: 40.56%
Bridgewater Associates’ Q3 2023 Stake: $921,557
Number of Hedge Fund Holders: 37
Alkermes plc (NASDAQ:ALKS) is a biopharmaceutical company that makes drugs for neuroscience and oncology patients in the U.S., Ireland, and other countries. Alkermes plc (NASDAQ:ALKS) has risen by 7.53% this year.
Alkermes plc (NASDAQ:ALKS)’s revenue was $1.59 billion for the twelve months ending on September 30, 2023, a 40.56% increase from last year.
7. Arista Networks, Inc. (NYSE:ANET)
Percent of Revenue Growth in Past One Year: 42.37%
Bridgewater Associates’ Q3 2023 Stake: $7.58 Million
Number of Hedge Fund Holders: 59
Arista Networks, Inc. (NYSE:ANET) is a high-growth technology company that develops, markets and sells cloud networking solutions. Its cloud networking solutions include flexible operating systems, network applications, and gigabit Ethernet switches and routers.
Amid growing demand for Arista Networks, Inc. (NYSE:ANET)’s cloud solutions, its revenue for the 12 months ended September 2023 was up 42.37%.
6. Prologis Inc. (NYSE:PLD)
Percent of Revenue Growth in Past One Year: 43.40%
Bridgewater Associates’ Q3 2023 Stake: $1.09 Million
Number of Hedge Fund Holders: 48
Prologis Inc. (NYSE:PLD) is one of Bridgewater Associates investment plays in the real estate sector. The company is a San Francisco-based real estate investment trust that makes and owns modern, high-quality properties. Prologis Inc. (NYSE:PLD) has about 1 billion square feet of warehouses and distribution centers for Amazon, Home Depot, and FedEx.
Prologis Inc. (NYSE:PLD) is up by 4.4% for the year while trading with a price-to-earnings multiple of 37.88. Its revenue for the 12 months that ended September was up 43.40%. The hedge fund increased its stakes in Prologis Inc. (NYSE:PLD) by 15% in Q3 2023 to $1.09 million.
Here is what Baron Real Estate Income Fund said about Prologis, Inc. (NYSE:PLD) in its Q2 2023 investor letter:
“The shares of Prologis, Inc., the world’s largest industrial REIT, declined in the third quarter of 2023 along with most REITs. We are big fans of CEO Hamid Moghadam and Prologis’ management team, and we remain optimistic about the company’s long-term growth outlook.
Prologis owns a high-quality real estate portfolio that is concentrated in major global trade markets and large population centers across the Americas, Europe, and Asia. Prologis has an unmatched global platform, strong competitive advantages (scale, data, and technology), and attractive embedded growth prospects. The company is the only industrial REIT with an A credit rating.
We continue to believe the appreciation potential for Prologis shares remains compelling given that the company’s rents on its in-place leases are more than 65% below current market rents, thus providing a strong runway for growth in the next three to five years.”
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Disclosure: None. 12 Best Growth Stocks to Buy According to Billionaire Ray Dalio’s Bridgewater Associates is originally published on Insider Monkey.
