Billionaire Ray Dalio’s Top Stock Picks Include Microsoft, Intel

Founded in 1973 by Ray Dalio, Bridgewater Associates is the largest hedge fund in the world, overseeing more than $212 billion worth of assets. Bridgewater is a global macro firm that employs fundamental analysis and invests in equity and debt markets around the world. It is also reported that the firm accepts fund from institutional investors only. In 2011 Dalio stepped down as CEO of the firm but still plays an active role in the management of assets. At the end of the first quarter, Bridgewater’s equity portfolio carried an estimated value of 7.89 billion and has a massive exposure to financial stocks, which accounted for 81% of the portfolio. Still, the fund’s top equity positions are from the technology sector.

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Big Surge In ADS Ownership

Bridgewater Associates’ holding of Alliance Data Systems Corporation (NYSE:ADS) stock went up by more than 300% during the first quarter. As reported in its latest 13F filing, the fund holds 108,164 shares valued at $23.8 million. Steve Cohen shares the same enthusiasm for Alliance Data Systems Corporation (NYSE:ADS), having also increased his bet on this stock during the quarter. His family office fund, Point72 Asset Management, reportedly holds 269,100 shares worth $59.2 million. At the end of April, Alliance Data Systems reported first quarter results that exceeded market’s expectations. The company posted a profit of $157.1 million or $3.84 per share when accounted for one time gains and costs, while analysts had projected $3.80 per share. Revenues came in at $1.68 billion, in line with expectations. Alliance Data Systems Corporation (NYSE:ADS) is trading at a P/E ratio of 24, below the industry average of 37 as reported by Yahoo! Finance.

Troubled PBM Company

Dalio and his team have also bought Express Scripts Holding Company (NASDAQ:ESRX) shares left and right during the quarter, as Bridgewater’S stake in the company surged by 324% to 394,218 shares. The position was reportedly worth $27.1 million at the end of March. Express Scripts is currently facing allegations of providing investors with misleading information and financial data. The company has allegedly overstated the health of its business relationship with Anthem, Inc. (NYSE:ANTM), which accounts for 14% of its annual revenues. In January 2016 Anthem threatened to terminate the contract with Express Scripts, claiming it had not received competitive benchmark pricing from Express Scripts, which refused to renegotiate the contract in good faith. As worries of a breakup between the companies started to rise, the stock plummeted by as much as 24% by mid-February. Although shares regained some of the lost ground, they are still down by roughly 16% for the year. John Shapiro‘s Chieftain Capital is betting big on Express Scripts Holding Company (NASDAQ:ESRX), which accounts for more than 15% of its equity portfolio. Valued at $288 million, Chieftain’s position amounts to 4.2 million share as reported in its latest 13F filing.

Bridgewater’s stake in VMware, Inc. (NYSE:VMW) was also slightly increased, with the fund now holding 548,037 shares worth in excess of $28.6 million at the end of the first quarter. VMware, Inc. (NYSE:VMW) is a publicly traded subsidiary of EMC Corporation (NYSE:EMC), which owns 81% of the company. EMC’s merger deal with Dell has put pressure on the stock price of VMware at first, but it managed to stage a rally fueled by news of stock buyback and good first quarter results. Revenues came in at $1.59 billion, up by 5% year over year, while earnings stood at $0.86 per share, topping analysts’ estimates of $0.84 per share and $1.58 billion in revenues. The company also said it would buy back up to $1.2 billion worth of shares by the end of the year. John Overdeck and David Siegel, the managers of Two Sigma Advisors, are also bullish on this stock, having upped their bet by 42% during the same period of time. The fund now holds 1.8 million shares worth more than $94.3 million.

Very Bullish On Intel

Dalio and his team are also very bullish on Intel Corporation (NASDAQ:INTC) and have increased their investment in the microprocessor titan by roughly 250% over the quarter. According to its latest 13F filing, Bridgewater’s stake amounts to 985,943 shares valued at $31.9 million. Although it failed to cement a place in the mobile industry and despite slumping PC sales, Intel has managed to shift its focus in order to benefit from the cloud bonanza. The company’s Xeon server processors are uncontested leaders in the server segment, which means cloud giants like Amazon and Microsoft are guaranteed clients. The company is still a leader in the PC processor market and said it has not plans to exit the mobile market either. Billionaire Ken Fisher is also betting big on Intel Corporation (NASDAQ:INTC) as his fund, Fisher Asset Management reportedly holds 19.6 million shares, up by 1% for the quarter, worth $617 million according to its latest 13F filing.

Microsoft Still Top Investment

A new quarter brings a new favorite: Bridgewater’s new top equity bet is Microsoft Corporation (NASDAQ:MSFT). Dalio and his team have stepped up their interest in the tech giant, boosting their holding by 20% to 640,248 shares valued at $35.3 million at the end of the first quarter. First Eagle Investment Management, on the other hand, chose to further reduce its exposure to Microsoft Corporation (NASDAQ:MSFT) and now holds 23.6 million shares, down by 22% from the previous quarter. With PC sales continuing to fall, Microsoft bet on their hybrid tablet seems to finally pay off, as the company’s recent quarterly report showed a 61% surge in the sales of Surface devices. However, the Surface has only managed to carve itself up a niche rather than directly compete with the already-established players and Windows still accounts for just 11% of the tablet market. As its crusade in the smartphone business was a complete disaster, Microsoft Corporation (NASDAQ:MSFT) has announced today the sale of its feature phone division for $350 million to HMD and Foxconn subsidiary FIH Mobile, which plan to revive the Nokia phone brand.

Disclosure: none.