In this article, we discuss 5 best growth stocks to buy according to Ray Dalio. If you want to see more growth stocks in Dalio’s portfolio, click 12 Best Growth Stocks to Buy According to Ray Dalio.
5. Monster Beverage Corporation (NASDAQ:MNST)
Number of Hedge Fund Holders: 46
Monster Beverage Corporation (NASDAQ:MNST) is a California-based company that markets and sells energy drink beverages and concentrates in the United States and internationally. The Bridgewater portfolio held 1.3 million Monster Beverage Corporation (NASDAQ:MNST) shares in the second quarter of 2022, worth $124.5 million and representing 0.52% of the total 13F securities. It is one of the best growth stocks to buy according to Ray Dalio.
UBS analyst Peter Grom on August 5 raised the price target on Monster Beverage Corporation (NASDAQ:MNST) to $99 from $94 but kept a Neutral rating on the shares. The company’s top line resilience was more than offset by much softer-than-anticipated gross margin in Q2, and while the management believes there will be margin improvement in Q3, there is very limited visibility on the path to recovery ahead, the analyst told investors in a research note.
According to Insider Monkey’s data, 46 hedge funds were long Monster Beverage Corporation (NASDAQ:MNST) at the end of Q2 2022, compared to 48 funds in the last quarter. Jim Simons’ Renaissance Technologies is the largest stakeholder of the company, with 5.65 million shares worth over $524.2 million.
Here is what Carillon Tower Advisers specifically said about Monster Beverage Corporation (NASDAQ:MNST) in its Q2 2022 investor letter:
“Monster Beverage Corporation (NASDAQ:MNST) develops and sells energy drinks and concentrates. The company’s shares outperformed, driven by an impressive earnings report highlighted by better than expected organic growth. Management also gave guidance that indicated a potential bottom in gross margins, as well as upcoming price increases that helped give investors confidence in its growth outlook.”
4. Intuitive Surgical, Inc. (NASDAQ:ISRG)
Number of Hedge Fund Holders: 56
Intuitive Surgical, Inc. (NASDAQ:ISRG) is a California-based company that provides access minimally invasive care in the United States and internationally. Ray Dalio’s hedge fund owns 599,155 Intuitive Surgical, Inc. (NASDAQ:ISRG) shares as of Q2 2022, worth over $120 million and representing 0.50% of the total 13F portfolio. Intuitive Surgical, Inc. (NASDAQ:ISRG) is one of the best growth stocks according to Ray Dalio.
On September 9, Stifel analyst Rick Wise raised the price target on Intuitive Surgical, Inc. (NASDAQ:ISRG) to $260 from $250 and reiterated a Buy rating on the shares. Driven by a detailed U.S. and international recurring-revenue model, he lifted his 2023 sales and EPS estimates, the analyst told investors. He also noted that adoption for Ion, Intuitive Surgical, Inc. (NASDAQ:ISRG)’s robotic lung biopsy platform, is in-line with his “most-aggressive” initial diligence scenario. Similarly, Citi analyst Joanne Wuensch on October 5 maintained a Buy rating on the stock and lowered the price target to $237 from $243.
According to Insider Monkey’s data, 56 hedge funds were long Intuitive Surgical, Inc. (NASDAQ:ISRG) at the end of June 2022, compared to 65 funds in the earlier quarter. Ken Fisher’s Fisher Asset Management featured as the leading stakeholder of the company, with 4.60 million shares worth $923.3 million.
Here is what Baron Health Care Fund has to say about Intuitive Surgical, Inc. (NASDAQ:ISRG) in its Q2 2022 investor letter:
“Intuitive Surgical, Inc. markets the da Vinci Surgical System, a robotic system used for minimally invasive surgical procedures. The stock declined along with other premium valuation, high-growth names due to investor concerns around inflation and rising interest rates. The potential for a more challenging sales environment for Intuitive’s hospital customer base also played a role. We continue to believe Intuitive has a long runway to expand the number of procedures performed using its robotic system.”
3. Airbnb, Inc. (NASDAQ:ABNB)
Number of Hedge Fund Holders: 57
Next on our list of the best growth stocks to buy according to Ray Dalio is Airbnb, Inc. (NASDAQ:ABNB), an American travel technology firm that enables hosts to offer stays and experiences to guests worldwide. Ray Dalio’s Bridgewater Associates held 771,399 shares of Airbnb, Inc. (NASDAQ:ABNB) in Q2 2022 worth $68.7 million, representing 0.29% of the total 13F securities. The hedge fund strengthened its hold on the stock by 290% during the June quarter.
On October 6, Jefferies analyst John Colantuoni maintained a Buy recommendation on Airbnb, Inc. (NASDAQ:ABNB) but lowered the price target on the shares to $138 from $140. His preference is to hold companies offering a combination of “competitive differentiation, exposure to attractive end-markets, levers to offset softer demand, and robust” free cash flow.
According to Insider Monkey’s data, 57 hedge funds were long Airbnb, Inc. (NASDAQ:ABNB) at the end of Q2 2022, compared to 66 funds in the last quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP is a prominent position holder in the company, with 3.15 million shares worth about $281 million.
Here is what Polen Capital specifically said about Airbnb, Inc. (NASDAQ:ABNB) in its Q2 2022 investor letter:
“Airbnb, Inc. (NASDAQ:ABNB) was one of our largest detractors from performance in the second quarter. Airbnb is the clear market leader in private rental bookings globally, according to market research firm Euromonitor. The business is currently firing on all cylinders, with revenue and earnings growth well above our expectations and long-term estimates. It would be easy to say that it is because as the world reopens, people are traveling for the first time in two years, providing a short-term benefit to the company. But, Airbnb also grew quickly in 2021 when people were still hesitant to travel and preferred staying close to home. The company’s growth in 2022 is not an easy comparison like it is for online travel agencies (which are more hotel-oriented), airlines, and hotels. In fact, Airbnb’s business has outpaced the hotel industry growth by more than 1,250 basis points per year since 2019, showing far more resilience than hotels and online travel agencies.
Airbnb didn’t invent the private rental market, but it developed a better offering and helped it scale with robust network effects and a system of trust protecting travelers and hosts alike. It has diligently removed friction from the marketplace to catalyze demand.
The business model has very high incremental profit margins. When the company went public only a year and a half ago, it had pretax profit margins on a non-GAAP basis of approximately 5% by our calculations. This year, those margins should approach 30%. In addition, the company has generated approximately $3 billion in free cash flow over the last 12 months. The runway for growth in private rental is very long, especially considering that hybrid work will likely remain for the long-term, allowing for more business/leisure trips that work better in Airbnbs than hotels, in our view…” (Click here to read full text)
2. Booking Holdings Inc. (NASDAQ:BKNG)
Number of Hedge Fund Holders: 93
Booking Holdings Inc. (NASDAQ:BKNG), the American travel firm, is one of the best growth stocks in Ray Dalio’s portfolio. Dalio’s Bridgewater Associates boosted its stake in the company by 1333% in Q2 2022, holding 45,094 shares worth $78.8 million. In Q2 2022, gross travel bookings at Booking Holdings Inc. (NASDAQ:BKNG) came in at $34.5 billion, an increase of 57% from the prior year quarter.
DA Davidson analyst Tom White on September 12 reaffirmed a Neutral rating on Booking Holdings Inc. (NASDAQ:BKNG) and lowered the price target on the shares to $2,150 from $2,300. The analyst updated his model to account for the recent momentum from the rebound in global travel demand, which he also sees as being negated by the broader macro and inflation-related slowdowns in travel spending next year.
Among the hedge funds tracked by Insider Monkey, Harris Associates is the leading stakeholder of Booking Holdings Inc. (NASDAQ:BKNG), with 616,383 shares worth over $1 billion. Overall, 93 hedge funds were long Booking Holdings Inc. (NASDAQ:BKNG) at the end of Q2 2022, compared to 99 funds in the prior quarter.
Here is what Matrix Asset Advisors specifically said about Booking Holdings Inc. (NASDAQ:BKNG) in its Q2 2022 investor letter:
“We started a new position in Booking Holdings Inc. (NASDAQ:BKNG) a leading global online travel company. Bookings has the largest market share in the online travel agency business through its Bookings.com, Priceline.com, Agoda, Kayak, OpenTable, Rentalcars, and Etraveli franchises. Before Covid, BKNG was growing at a double-digit rate with earnings reaching $102 per share in 2019. The company’s business was hit hard during Covid but remained profitable. As global economies emerge from Covid, the travel business and Bookings have recovered quickly but the stock has been a casualty of the NASDAQ sell-off. The company has a strong balance sheet and shareholder-oriented management. We think the share price decline provided a good entry point for this high-quality company in an industry with strong growth prospects.”
1. PayPal Holdings, Inc. (NASDAQ:PYPL)
Number of Hedge Fund Holders: 97
PayPal Holdings, Inc. (NASDAQ:PYPL) is an American fintech firm that provides payment solutions under the PayPal, PayPal Credit, Braintree, Venmo, Xoom, Zettle, Hyperwallet, Honey, and Paidy names. Ray Dalio owns 1.26 million shares of PayPal Holdings, Inc. (NASDAQ:PYPL) as of the second quarter of 2022, worth $88.5 million. Dalio boosted his stake in the company by 1009% in Q2 and PayPal Holdings, Inc. (NASDAQ:PYPL) is one of the best growth stocks in his portfolio.
On September 26, Canaccord analyst Joseph Vafi noted that despite a tough macro backdrop he sees the upcoming Pay with Venmo launch on Amazon as the latest positive catalyst for PayPal Holdings, Inc. (NASDAQ:PYPL) shares. He reiterated a Buy rating and a $160 price target on PayPal Holdings, Inc. (NASDAQ:PYPL) shares.
According to Insider Monkey’s data, 97 hedge funds held stakes worth $5.2 billion in PayPal Holdings, Inc. (NASDAQ:PYPL) at the end of Q2 2022, compared to 100 funds in the prior quarter worth $6.2 billion. D E Shaw is a notable position holder in the company, with 8.5 million shares valued at $595.6 million.
Here is what Lakehouse Capital specifically said about PayPal Holdings, Inc. (NASDAQ:PYPL) in its August 2022 investor letter:
“Lastly, we’ll wrap things up with a comment on our decision to exit our remaining stake in PayPal Holdings, Inc. (NASDAQ:PYPL), which we had already meaningfully reduced throughout the year. We had owned PayPal since the Fund’s inception as we believed it was well placed to continue gobbling up share in online payments, which in turn, was gaining share from the total payments pie. The company also possessed numerous opportunities to grow beyond its core platform, with the ability to add new tools and functionality (crypto offerings, Pay with Venmo, and Buy Now Pay Later etc) and enjoyed significant competitive advantages from its large two-sided network. The company had been performing well and business momentum accelerated during the pandemic. This led management to provide some ambitious growth targets at its investor day in 2021 calling for 15% user growth and 20% revenue growth on an annualized basis over the next five years.”
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