Billionaire Bridgewater Founder Ray Dalio’s Top 5 Holdings in 2023

1. The Procter & Gamble Company (NYSE:PG)

Value of Bridgewater Associates’ 13F Position: $735 million

Number of Hedge Fund Shareholders: 76

The Procter & Gamble Company (NYSE:PG) is Ray Dalio’s top holding so far in 2023, just as it was throughout all of 2022. Bridgewater also remained the company’s biggest shareholder for the fourth-straight quarter. Dalio’s firm trimmed its stake in PG slightly during Q1, selling off 2% of its shares to leave Bridgewater with 4.94 million.

The Procter & Gamble Company (NYSE:PG) has executed an impressive restructuring in recent years, cutting billions of dollars in overhead and trimming its product portfolio. Proctor & Gamble’s sales have proven resilient in the face of price increases, which were driven 10% higher in the company’s fiscal Q3, while volumes dropped by just 3%. That has helped further boost the company’s margins and drive earnings growth, which is expected to persist into the company’s 2024 fiscal year. PG shares have nearly doubled over the last five years however and may be too fairly valued to justify buying into now.

Rowan Street Capital worries how The Procter & Gamble Company (NYSE:PG) investors will fare once the market loses its appetite for safe stocks, as it outlined in its Q4 2022 investor letter:

“Let’s look at The Procter & Gamble Company (NYSE:PG). Dividend yield is 2.4%. Earnings are forecasted to grow at 5.9%, and its current earnings multiple is at 25x. Now, lets say over the next 3-5 years the market loses interest in the “safe”, mature companies that grow at anemic rates and gets an appetite for growth again. It’s very unlikely that Mr. Market will be paying 25x for 5.9% earnings growth. Lets assume that multiple declines to the market average of 18x — that would be ~6.9% drag per year on the total expected return over next 3-5 years. If we get 2.4% (dividend) + 5.9% (earnings growth) – 6.9% (decrease in earnings multiple) = 1.4% (annual return we can expect on average from this stock).”

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