Here are Billionaire Ray Dalio’s Top Tech Stock Picks

Ray Dalio‘s Bridgewater Associates is the largest hedge fund in the world, with assets under management of around $120 billion. Performance has been good since inception, with the fund consistently beating the S&P 500. Given Bridgewater’s excellent historical performance, let’s take a closer look at Bridgewater’s recently filed 13F and its top tech picks as of the end of September, which include Apple Inc. (NASDAQ:AAPL), Alphabet Inc (NASDAQ:GOOGL), Symantec Corporation (NASDAQ:SYMC), Microsoft Corporation (NASDAQ:MSFT), and CA, Inc. (NASDAQ:CA).

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In the eyes of most traders, hedge funds are assumed to be underperforming, old investment tools of the past. While there are more than 8000 funds in operation at present, Hedge fund experts at Insider Monkey look at the aristocrats of this group, around 730 funds. Contrary to popular belief Insider Monkey’s research revealed that hedge funds underperformed in recent years because of their short positions as well as the huge fees that they charge. Hedge funds managed to outperform the market on the long side of their portfolio. In fact, the 15 most popular small-cap stocks among hedge funds returned 102% since the end of August 2012 and beat the S&P 500 Index by 53 percentage points (see more details here).

#5 CA, Inc. (NASDAQ:CA)

Shares held (as of September 30): 649,976
Total Value (as of September 30): $17.74 million
Percent of Portfolio (as of September 30): 0.24%

Bridgewater is bullish on CA, Inc. (NASDAQ:CA), as it increased its position in the stock by 819%. Although shares of the business software maker are down almost 10% year-to-date, they trade for a reasonable 10.93 times forward earnings and pay an attractive 3.73% dividend yield. The company reported in-line earnings results in October. Of the around 730 elite funds we track, 26 funds owned $332.18 million of CA, Inc. (NASDAQ:CA)’s shares. Those elite funds accounted for 2.60% of the float on June 30. Joel Greenblatt‘s Gotham Asset Management owned 2.31 million shares at the end of the second quarter.

#4 Microsoft Corporation (NASDAQ:MSFT)

Shares held (as of September 30): 471,008
Total Value (as of September 30): $20.85 million
Percent of Portfolio (as of September 30): 0.28%

Bridgewater increased its shares in Microsoft by 550% in the quarter. Under the leadership of new CEO Satya Nadella, Microsoft is quickly moving beyond Windows and into future growth areas such as the cloud, augmented reality, and business productivity applications. The company’s third quarter beat expectations, with EPS of $0.67 on revenues of $21.7 billion, beating estimates by $0.08 per share and $670 million, respectively. Guidance is upbeat with management expecting second quarter revenues of $24.8 to $25.4 billion versus the consensus of $25.1 billion. Jeffrey Ubben’s ValueAct Capital owned 75.27 million shares at the end of June but has recently sold 18.7 million shares.

#3 Symantec Corporation (NASDAQ:SYMC)

Shares held (as of September 30): 1.29 million
Total Value (as of September 30): $25.05 million
Percent of Portfolio (as of September 30): 0.34%

Ray Dalio’s fund increased its holding in Symantec Corporation (NASDAQ:SYMC) by an astonishing 1,548% from June 30 to September 30. Several analysts are bullish on the software security maker, as three analysts have ‘Buy’ ratings and twelve have ‘Hold’ ratings. The analysts have a consensus price target of $24.93 between them, giving shares over 25% upside from present levels. Given the forward P/E of 12.1 and dividend yield of 3%, shares look attractive.

#2 Alphabet Inc (NASDAQ:GOOGL)

Shares held (as of September 30): 40,226
Total Value (as of September 30): $25.68 million
Percent of Portfolio (as of September 30): 0.34%

Bridgewater raised its stake in Alphabet Inc (NASDAQ:GOOGL) by 89% in the third quarter to 40,226 shares. Alphabet’s cash cow, Google, has become more practical under new CEO Sundar Pichai. Under Pichai’s guidance, Google plans to fuse its Chrome OS and Android operating systems into one, making the world’s largest computing platform even more extensive. Google is also trying to make Android more uniform so programmers make apps for Android first rather than for the iPhone. In addition, Google is trying to go back into China, where more than 600 million internet users live. The shares trade at a reasonable 21 times forward earnings.

#1 Apple Inc. (NASDAQ:AAPL)

Shares held (as of September 30): 274,852
Total Value (as of September 30): $30.32 million
Percent of Portfolio (as of September 30): 0.41%

Bridgewater cut its holdings in Apple Inc. (NASDAQ:AAPL) by 48% in the third quarter, but still retained a stake of 274,852 shares, good for 0.41% of the fund’s portfolio. The reduced stake still makes Apple Bridgewater’s number one tech holding. Famed activist investor Carl Icahn, whose fund Icahn Capital LP owned 52.76 million shares at the end of June, recently called Apple ‘the greatest company in the world’ at an investor conference, citing the company’s cheap valuation. Despite the buybacks, hundreds of billions of cash on the balance sheet, and its strong eco-system, Apple trades at a forward P/E of 10.7 versus the S&P 500’s forward P/E of 17.65. Shares have rallied 6.62% year-to-date.

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