Billionaire Ray Dalio is Dumping These 10 Stocks

In this article, we talk about 10 stocks that billionaire Ray Dalio dumped from his portfolio. If you want to see more stocks in this selection, check out Billionaire Ray Dalio is Dumping These 5 Stocks.

Ray Dalio is an American billionaire hedge fund manager, philanthropist, and the founder of Bridgewater Associates, one of the world’s largest hedge funds.

Dalio, who built Bridgewater Associates into one of the world’s biggest hedge funds before handing control of the $150 billion firm to a new generation of investors this past October, thinks government stimulus programs during the pandemic have created a bubble. To fight inflation, Dalio said the Fed will continue raising rates. “And there’ll be real pain, of course.” In an interview at MarketWatch’s Best New Ideas in Money Festival, Dalio explained his outlook on the economy:

“I do believe that as you raise the interest rate to what’s appropriate, that competitiveness is going to drive it down, and then also, it will hurt earnings, it will hurt the economy.”

The billionaire investor heralded further doom by stating his belief the Fed will raise its funds rate to between 4-5%, and that the US economy will further worsen in 2023 into a ‘stagflationary environment’, causing the S&P 500 to pay the price by falling around another 20%. To avoid the aforementioned stagflation environment, Dalio observed that the central bank would need to find some balance between inflation and interest rates.

As of the fiscal third quarter of 2022, Ray Dalio’s Bridgewater Associates manages $20 billion in 13F securities. Some of the top stocks in the portfolio of Ray Dalio’s fund at the end of Q3 2022 included Procter & Gamble Company. (NASDAQ:PG), Visa, Inc. (NYSE:V), and Walmart Inc. (NYSE:WMT).

Ray Dalio of Bridgewater Associates

Our Methodology

These stocks were sold entirely by Ray Dalio’s fund in the third quarter. For each stock we have mentioned the number of shares the fund reported owning in the previous quarter.

Billionaire Ray Dalio is Dumping These 10 Stocks

10. eBay Inc. (NASDAQ:EBAY)

Number of Hedge Fund Holders: 42

Number of Shares Owned by Ray Dalio’s Fund in Q2: 340.24K

eBay Inc. (NASDAQ:EBAY) is an American multinational e-commerce company based in San Jose, California, that facilitates consumer-to-consumer and business-to-consumer sales through its website.

On November 15, MoffettNathanson analyst Michael Morton initiated coverage of eBay, Inc. (NASDAQ:EBAY) with a Market Perform rating and $44 price target. Morton states that he prefers market share gainers and finds it “challenging to have an appetite for market share losers.” The analyst doesn’t subscribe to the bear case of peak e-commerce penetration and believes e-commerce penetration growth will continue at the historical pace, contending that the internet “creates a self-fulfilling prophecy for continued share loss once it starts.”

42 out of the 920 hedge fund portfolios studied by Insider Monkey during this year’s third quarter had bought eBay Inc. (NASDAQ:EBAY)’s shares. The firm’s largest investor is D. E. Shaw which owns approximately 5.9 million shares that are worth $218 million.

Unlike Procter & Gamble Company. (NASDAQ:PG), Visa, Inc. (NYSE:V), and Walmart Inc. (NYSE:WMT), Ray Dalio seems to have lost confidence in eBay Inc. (NASDAQ:EBAY), and sold off its shares in Q3 2022.

Smead Capital Management, an investment management company, mentioned eBay Inc. (NASDAQ:EBAY) in its third-quarter 2022 investor letter. Here’s what the firm said:

“Two things are very noticeable right off the top. First, sometimes you have to be happy losing less in a bear market environment so that you have more of your capital to grow in the next bull market. We are never really happy losing money. Second, 2022 is likely to be our third year of existence as a fund to lose money for the year. This year would join 2008 and 2018 in this undistinguished category. Our biggest detractors was dominated by eBay (NASDAQ:EBAY). Consumer/investor fears about media and e-commerce hit WBD and EBAY and profit taking in Amgen came from early 2022 strength.”

9. Snap Inc. (NYSE:SNAP)

Number of Hedge Fund Holders: 42

Number of Shares Owned by Ray Dalio’s Fund in Q2: 531.41K

Snap Inc. (NYSE:SNAP) is an American camera and social media company that developed and maintains technological products and services, including Snapchat, Spectacles, and Bitmoji.

Earlier this October, UBS analyst Lloyd Walmsley lowered the price target on Snap Inc. (NYSE:SNAP) to $10 from $14 and maintained a Buy rating on the shares of the company. The analyst sees both “positives and negatives” from the quarter, but expects Snap shares to be range-bound pending better visibility. However, he sees the company being well positioned for an eventual recovery.

Among the hedge funds being tracked by Insider Monkey, John Overdeck and David Siegel’s Two Sigma Advisors is a leading shareholder in Snap Inc. (NYSE:SNAP), with 21.89 million shares worth more than $215 million. Overall, 42 hedge funds reported holding shares in the company at the close of Q3 2022.

Here is what RiverPark Large Growth Fund had to say about Snap Inc. (NYSE:SNAP) in its Q3 2022 investor letter:

“SNAP shares were our top detractor for the quarter on its July decline from weaker revenue growth relative to guidance (which had been reduced in May) and the fact that management did not provide an outlook for 3Q. Shares subsequently rebounded somewhat as the company announced better-than-expected near-term revenue growth, while announcing a broadbased cost restructuring.

Although the company continues to face near-term macro headwinds and difficult year-over-year comparisons from COVID-fueled quarters last year, we believe SNAP can reaccelerate its revenue growth to greater than 20% annually over the next several years. With TTM revenue of $4.5 billion (as compared with Meta’s $120 billion), 347 million daily average users (about 1/10 of Meta’s), and $14 TTM ARPU (about 1/3 of Meta’s), we believe SNAP has a long runway for both revenue growth and expanded profitability as it improves its platform functionality, continues to grow its audience (daily active users continue to grow at a double-digit rate), and expands its monetization.”

8. NCR Corporation (NYSE:NCR)

Number of Hedge Fund Holders: 49

Number of Shares Owned by Ray Dalio’s Fund in Q2: 9.81K

NCR Corporation (NYSE:NCR), formerly known as National Cash Register, is an American software, consulting and technology company providing several professional services and electronic products.

DA Davidson analyst Matt Summerville lowered the price target on NCR Corporation (NYSE:NCR) to $35 from $45 but kept a Buy rating on the company’s shares on October 27. According to the analyst, NCR’s Q3 results were demonstrative of the continued sizable global challenges, including higher interest rates, outside of the company’s control. However, Summerville states that the company’s initiatives to address inflation and supply-chain challenges are generating results above what the management had in mind.

The number of hedge funds tracked by Insider Monkey that disclosed having a stake in NCR Corporation (NYSE:NCR) jumped to 49 at the end of the third quarter from 47 at the end of Q2. Glenn W. Welling’s Engaged Capital reportedly held the highest stake in the company, worth roughly $84.64 million.

Here is what ClearBridge Small Cap Value Strategy has to say about NCR Corporation (NYSE:NCR) in its Q3 2022 investor letter:

“Information technology (IT) proved a headwind to performance, and included the portfolio’s worst performing stock, NCR (NYSE:NCR), during the quarter. Broadly, the increase in interest rates discounted longer-term cash flows, compressed multiples and pressured share prices for the typically more growth-oriented sector. Still others felt pressure for company-specific reasons, such as the market’s disappointment that ATM and point-of-sale software company NCR was no longer the center of a bidding war between two private equity firms. However, we have high conviction in management’s decision to split the company, allowing for each entity to devote greater time and attention to optimizing very profitable and high cash flow generating businesses. We continue to own NCR as we believe the assets, and their respective free cash flow generation, are undervalued regardless of whether it continues as one company or two.”

7. AT&T Inc. (NYSE:T)

Number of Hedge Fund Holders: 61

6. Autodesk, Inc. (NASDAQ:ADSK)

Number of Hedge Fund Holders: 62

Number of Shares Owned by Ray Dalio’s Fund in Q2: 7.78k

Autodesk, Inc. (NASDAQ:ADSK) is an American multinational software corporation that provides 3D design, engineering, and entertainment software and services across the globe. It is also partnering with Epic Games to accelerate immersive real-time, or RT, experiences across industries, with an initial focus on AEC.

Earlier this September, Mizuho analyst Gregg Moskowitz lowered the price target on Autodesk, Inc. (NASDAQ:ADSK) to $240 from $290 and kept a Buy rating on the shares following the company’s annual user conference. According to the analyst, Autodesk’s introduction of three new verticalized cloud environments has the potential to more meaningfully transform customer operations as they transition to the cloud over the long-term.

By the end of this year’s third quarter, 62 out of the 920 hedge funds polled by Insider Monkey had invested in Autodesk, Inc. (NASDAQ:ADSK). Autodesk, Inc. (NASDAQ:ADSK) largest investor as of Q3 is Rajiv Jain’s GQG Partners which owns 2.89 million shares that are worth $539.79 million.

Although Ray Dalio trusts in stocks like Procter & Gamble Company. (NASDAQ:PG), Visa, Inc. (NYSE:V), and Walmart Inc. (NYSE:WMT), the same can’t be said for AT&T Inc. (NYSE:T), which was sold off from his portfolio in Q3.

Arch Capital made the following comment about Autodesk, Inc. (NASDAQ:ADSK) in its Q3 2022 investor letter:

“Let’s look at a specific example. One of our portfolio companies is Autodesk, Inc. (NASDAQ:ADSK), a construction/engineering/architecture software business with an incredible moat. Our cost basis on the stock is $230. Shares traded as high as $340 in 2021 but today are down around $200. With this declining share price, Autodesk management has been able to take the healthy free cash flow it generates and retire some of its shares outstanding at an accelerated rate.

At the beginning of 2022, Autodesk had approximately 220 million shares outstanding. Today, that number is down to around 216 million, and we expect this number to continue to drop over the next few years as the company ramps up its free cash flow generation. This reduction in share count will juice growth in free cash flow per share, which will determine what returns we get owning Autodesk over the long haul. The lower the stock drops, the faster Autodesk’s share count drops, all else equal.”