Dalio has held shares of both Intel and Microchip dating back to 2013, when they ranked as two of his best dividend stocks among his top stock picks. Both remain solid dividend stocks to this day, with Intel Corporation (NASDAQ:INTC) paying $0.24 quarterly with a yield of 2.91% while Microchip Technology Inc. (NASDAQ:MCHP) pays $0.36 quarterly with a yield of 2.90%. However, the dividend yields of both stocks have declined from their October 2013 levels of 3.9% and 3.5% respectively.
While both Micron and Intel had weak quarters along with the rest of the semiconductor industry as a whole, Microchip Technology Inc. (NASDAQ:MCHP) was one of the few stocks in the sector to perform well, gaining 9.18%. Dalio increased his position in the company by 60% during the quarter, while also expanding his stake in Micron Technology Inc. (NASDAQ:MU) by 121%, though he cut his Intel holding by 19%. Value investors Donald Yacktman and Tom Gayner hold positions in Intel, while billionaire Ken Griffin owns a stake in Microchip Technology.
Lastly is Dalio’s position in International Business Machines Corp. (NYSE:IBM), consisting of 136,044 shares with a value of $21.84 million, his third-most valuable position in a tech company. Dalio has owned a chunk of International Business Machines Corp. (NYSE:IBM) since early 2013 and shares are down by about 15% since then. In fact they are down dating all the way back to the third quarter of 2011 when Warren Buffett opened his $10 billion position in the business intelligence and computer services company. While Buffett added yet more shares to his position during the first quarter as he continues to staunchly stand by the stock, Dalio decreased his own position by 7%. International Business Machines Corp. (NYSE:IBM) is up by 8% year-to-date and has also hiked its quarterly dividend to $1.30, giving it a 3% yield. However IBM’s sales declined for the 12th straight quarter, down by 11.9% year-over-year following the shedding of several underperforming businesses as it turns its eyes towards the cloud like so many other tech giants.
Why are we interested in the 13F filings of a select group of hedge funds headed by masterminds like Ray Dalio? We use these filings to determine the top 15 small-cap stocks held by these elite funds, based on 16 years of research that show their top small-cap picks are much more profitable than both their large-cap stocks and the broader market as a whole. These small-cap stocks beat the S&P 500 Total Return Index by nearly one percentage point per month in our backtests, which were conducted over the period of 1999 to 2012. Moreover, since the beginning of forward testing from August 2012, the strategy worked just as our research predicted, outperforming the market every year and returning 141% over the past 32 months, trouncing the returns of the S&P 500 ETF (SPY) by more than 135% (see more details). We release our latest quarterly stock picks tomorrow, be sure to check them out.
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