Billionaire Ray Dalio’s Bridgewater Associates 13F Portfolio: Top 5 Stock Picks

In this article, we discuss the top 5 stock picks of billionaire Ray Dalio’s Bridgewater Associates 13F portfolio. If you want to see more stocks in this selection, check out Billionaire Ray Dalio’s Bridgewater Associates 13F Portfolio: Top 10 Stock Picks.

5. Costco Wholesale Corporation (NASDAQ:COST)

Number of Hedge Fund Holders: 64

Ray Dalio’s Bridgewater Associates’ Holdings: $566,509,000

Percentage of Ray Dalio’s Bridgewater Associates’ Portfolio: 2.86%

Costco Wholesale Corporation (NASDAQ:COST) is a Washington-based membership-only big box retailer.

Simeon Gutman at Morgan Stanley believes that the company could have a special 2023 as it can address the challenges related to excess inventory. Furthermore, Costco Wholesale Corporation (NASDAQ:COST) is expected to experience solid unit growth and market share gain during the next year. The analyst made these comments in a note issued to investors on October 28 following meetings with CFO Richard Galanti and other members of the leadership team at the Costco headquarters. Costco Wholesale Corporation (NASDAQ:COST) is experiencing positive momentum as comparable sales grew by 6% YoY in October 2022. Costco Wholesale Corporation (NASDAQ:COST) is another stock in Mr. Dalio’s Bridgewater Associates’ portfolio that has been able to outperform the S&P 500 Index since the start of 2022.

Cooper Investors shared its stance on Costco Wholesale Corporation (NASDAQ:COST) in its Q3 2022 investor letter. Here’s what the firm said:

“The US economy continues to run hot – the labour market is extremely tight and a number of executives we spoke to described their challenges in retaining staff and preventing competitors from poaching talent. Industrial companies in particular continue to see record backlogs, with the easing of logistics and supply chain constraints only just starting to have an impact on deliveries and lead times.

In terms of inflationary pressures, the vast majority of our holdings have been able to leverage strong market positions and stakeholder relationships to push pricing through in 2022 such that minimal impact to earnings has occurred. Clearly this is not a lever than can be pulled indefinitely but the more experienced management teams have kept some of their powder dry. Our meeting with management at Costco in Seattle was memorable for several reasons but one was their latent ability to increase member pricing which they have not done in over 5 years (and thus likely to do in 2023)…

…To conclude we’ll return to our meeting with Costco mentioned earlier. The business quality is no secret after decades of incredible execution, but the meeting gave us renewed conviction around Value Latencies in terms of the runway for growth, the focus on enhancing customer value, Costco’s vast buying power (it purchases 30% of the world’s jumbo cashews as one example) and management’s feral focus on the business model and cost discipline.”

4. The Coca-Cola Company (NYSE:KO)

Number of Hedge Fund Holders: 60

Ray Dalio’s Bridgewater Associates’ Holdings: $642,397,000

Percentage of Ray Dalio’s Bridgewater Associates’ Portfolio: 3.25%

The Coca-Cola Company (NYSE:KO) is an Atlanta, Georgia-based beverage company.

On October 26, Peter Grom at UBS increased the price target on The Coca-Cola Company (NYSE:KO) from $63 to $68 and reiterated a Buy rating on the stock. The analyst highlighted the company’s impressive Q3 2022 earnings beat as The Coca-Cola Company (NYSE:KO) was able to counter the negative impact of currency headwinds with organic growth.

The analyst added that The Coca-Cola Company’s (NYSE:KO) risk and return profile looks favorable as the company is set to experience strong growth in the top line, which has given the stock a premium valuation compared to its peers. Experts highlight that The Coca-Cola Company (NYSE:KO) has the power to act as a pricing leader amongst its peers, and the advanced revenue management tactics are providing more impetus to topline growth. The stock’s annual forward dividend yield stands at 2.90% as of November 14.

Here’s what Aristotle Capital Management, LLC, said about The Coca-Cola Company (NYSE:KO) in its Q2 2022 investor letter:

“The Coca-Cola Company (NYSE:KO), the global beverage business, was a leading contributor for the period. Coca-Cola continues to benefit from the refranchising of its bottling operations and realignment of incentives, catalysts we previously identified. These initiatives are demonstrating their strength in an inflationary and supply-chain-challenged environment. Additionally, the company has focused on evolving its customer engagement practices by leveraging digital and social medias for targeted campaigns, such as the design and launch of Coke Byte in the metaverse. Lastly, Coca-Cola has furthered its transformation into a total beverage company, as it debuted its new Jack Daniel’s Tennessee Whiskey and Coca-Cola ready-to-drink premixed cocktail. Although uncertainties surrounding cost pressures, lockdowns and geopolitical conflicts remain, we believe Coca-Cola is uniquely positioned to successfully continue its transition toward a total beverage business.”

3. PepsiCo, Inc. (NYSE:PEP)

Number of Hedge Fund Holders: 65

Ray Dalio’s Bridgewater Associates’ Holdings: $656,549,000

Percentage of Ray Dalio’s Bridgewater Associates’ Portfolio: 3.32%

PepsiCo, Inc. (NYSE:PEP) is a Harrison, New York-based beverage, food, and snacks company with a diversified product line.

The company posted strong quarterly results as it surpassed Q3 2022 consensus estimates and raised the full-year sales forecast. As compared to the Coca-Cola Company, PepsiCo, Inc. (NYSE:PEP) has a higher share of the revenue from the US. During Q3, PepsiCo, Inc. (NYSE:PEP) generated 55% of its revenue from the US as opposed to Coca-Cola’s revenue share of 34%. Furthermore, PepsiCo, Inc. (NYSE:PEP) has significant exposure in the snacks segment, which is growing more rapidly compared to the beverages industry. PepsiCo, Inc. (NYSE:PEP) has received a consensus buy rating from Wall Street analysts as of October 12, and the stock’s 12-month price target suggests a total return of 10.4%. The stock offers an annual dividend of $4.60 as of November 14.

Here’s what ClearBridge Investments said about PepsiCo, Inc. (NYSE:PEP) in its Q2 2022 investor letter:

“Also in the stable and predictable cash flow camp, though with a very different business model, global food and beverage company PepsiCo (NYSE:PEP) reported very strong organic growth in the first quarter, driven by healthy price/mix, and raised revenue guidance, while holding EPS guidance. Notably, its beverage business showed expanding margins.”

PepsiCo, Inc. (NYSE:PEP) was held by 65 hedge funds as of Q2 2022.

2. Johnson & Johnson (NYSE:JNJ)

Number of Hedge Fund Holders: 83

Ray Dalio’s Bridgewater Associates’ Holdings: $769,836,000

Percentage of Ray Dalio’s Bridgewater Associates’ Portfolio: 3.89%

Johnson & Johnson (NYSE:JNJ) is a New Brunswick, New Jersey-based healthcare giant with a presence in the consumer goods, pharmaceuticals, and medical devices segment.

Johnson & Johnson (NYSE:JNJ) is currently focused on spinning off its consumer healthcare division, which will be called Kenvue. This will aid Johnson & Johnson (NYSE:JNJ) to entirely focus on the pharmaceutical and medical divisions of the company. Furthermore, Johnson & Johnson (NYSE:JNJ) will be able to offload the risk related to the lawsuits against its baby powder to a separate entity. The company has further strengthened its pharmaceutical division following the $16.6 billion acquisition of Abiomed, Inc. (NASDAQ:ABMD). The strength of Abiomed lies in technologies related to the treatment of diseases of the heart, lungs, and kidneys. Johnson & Johnson’s (NYSE:JNJ) forward dividend yield stands at 2.67% as of November 14.

Here’s what Distillate Capital Partners LLC said about Johnson & Johnson (NYSE:JNJ) in its Q2 2022 investor letter:

“Johnson & Johnson was among the 2 largest trims at around 1% each. Each stock was up 1% in the quarter compared to the 16% price decline for the S&P 500 and the positions were reduced as the valuations became somewhat less appealing, though still attractive enough to warrant inclusion.”

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

Number of Hedge Fund Holders: 71

Ray Dalio’s Bridgewater Associates’ Holdings: $835,201,000

Percentage of Ray Dalio’s Bridgewater Associates’ Portfolio: 4.22%

The Procter & Gamble Company (NYSE:PG) is a Cincinnati, Ohio-based consumer goods company.

In a research note issued on October 20, Lauren Lieberman at Barclays increased the price target on The Procter & Gamble Company (NYSE:PG) from $139 to $145 and reiterated an Overweight rating on the stock. The analyst highlighted that the company’s Q1 FY23 results were better than expected.

Experts believe that The Procter & Gamble’s (NYSE:PG) unit sales are stable and more profitability can be expected in Q2 and Q3 of FY23 as inflation is expected to ease. The Procter & Gamble Company (NYSE:PG) is also set to experience the tailwind of its savings initiatives, reaching its peak in the second half of 2023. Furthermore, commodities rates and supply chain-related challenges are expected to reduce in FY23 as well, boosting The Procter & Gamble Company’s (NYSE:PG) margins. The Procter & Gamble Company (NYSE:PG) offers an annual forward dividend yield of 2.59% as of November 14.

Of the 895 hedge funds in Insider Monkey’s database, The Procter & Gamble Company (NYSE:PG) was held by 71 hedge funds as of Q2 2022.

You can also take a peek at Biggest ESG Companies in the World and the 15 Most Valuable NASDAQ Companies.

Follow Insider Monkey on Twitter