In this article, we discuss 10 stocks that Ray Dalio is buying in 2022. If you want to see more additions to the billionaire’s portfolio, click Ray Dalio is Buying These 5 Stocks in 2022.
Ray Dalio is an American billionaire investor and hedge fund manager, who founded Bridgewater Associates in 1985 and has served as its co-chief investment officer since the fund’s inception. Ray Dalio is perhaps one of the most well-known Wall Street financiers, who serves pension funds, endowments, foundations, foreign governments, and central banks via his New York-based hedge fund.
Bridgewater Associates started out as a wealth advisory firm, dealing initially in currencies and interest rates, but it gradually signed on prominent clients, including pension funds for the World Bank and Eastman Kodak. Bridgewater Associates quickly rose to prominence as the biggest hedge fund in the world in 2005.
Ray Dalio invests primarily in the healthcare, finance, consumer staples, consumer discretionary, and communications sectors as of Q1 2022. The billionaire’s $24.80 billion fund purchased 261 new stocks in the first quarter of 2022, made additional purchases in 546 securities, sold out of 24 companies, and reduced holdings in 156 names.
In the first fiscal quarter of 2022, Ray Dalio’s most notable stock picks included The Procter & Gamble Company (NYSE:PG), Johnson & Johnson (NYSE:JNJ), and The Coca-Cola Company (NYSE:KO). However, in this article, we discuss the billionaire’s new stocks in 2022.
Our Methodology
We used Ray Dalio’s Q1 portfolio for this analysis, selecting some of the most prominent stocks added to the billionaire’s holdings during the quarter. Hedge fund sentiment around each stock has been derived from Insider Monkey’s database of 900+ elite hedge funds tracked at the end of the fourth quarter of 2021. We believe it is useful to track the holdings of elite hedge funds, since they are experienced at navigating the market and their stock picking strategies can help retail investors.
Ray Dalio is Buying These Stocks in 2022
10. Airbnb, Inc. (NASDAQ:ABNB)
Number of Hedge Fund Holders: 63
Airbnb, Inc. (NASDAQ:ABNB) is a California-based travel technology firm that offers vacation rentals and tourist experiences to guests worldwide. Ray Dalio’s Bridgewater Associates added Airbnb, Inc. (NASDAQ:ABNB) to its Q1 2022 portfolio by purchasing 198,143 shares worth $34 million, representing 0.13% of the total 13F securities.
On May 3, Airbnb, Inc. (NASDAQ:ABNB) reported its Q1 results, announcing a GAAP loss per share of $0.03, topping analysts’ estimates by $0.27. The revenue gained 70.3% year-over-year, reaching $1.51 billion, outperforming Street estimates by $60 million. 102.1 million bookings were made in Q1, up 59% from the prior-year quarter. Airbnb, Inc. (NASDAQ:ABNB) expects Q2 revenue to fall in between $2.03 billion to $2.13 billion.
Citi analyst Ronald Josey believes Airbnb, Inc. (NASDAQ:ABNB)’s summer product release engages users better when searching for travel lodging and experiences. With these new products, Airbnb, Inc. (NASDAQ:ABNB) is “defining and extending its lead” within the alternative accommodations and broader lodging market globally as travel recovers, the analyst told investors. With the shares down 18% since posting Q1 results, the analyst thinks it is time to benefit from the “dislocation” and reiterated a Buy rating on Airbnb, Inc. (NASDAQ:ABNB) with a $200 price target on May 12.
Among the hedge funds tracked by Insider Monkey, 63 funds were bullish on Airbnb, Inc. (NASDAQ:ABNB) at the end of December 2021, up from 58 funds in the prior quarter. Jim Simons’ Renaissance Technologies reported owning 3.40 million shares of Airbnb, Inc. (NASDAQ:ABNB) in Q1 2022, worth $584.6 million.
In addition to The Procter & Gamble Company (NYSE:PG), Johnson & Johnson (NYSE:JNJ), and The Coca-Cola Company (NYSE:KO), Airbnb, Inc. (NASDAQ:ABNB) is a notable addition to Ray Dalio’s portfolio.
Here is what Tollymore Investment Partners has to say about Airbnb, Inc. (NASDAQ:ABNB) in its Q3 2021 investor letter:
“Today disruptors are not typically seeking to replace incumbents entirely. Rather, they break the links in the customer journey, in doing so better aligning monetisation with value creation and minimizing externalities. For example, Airbnb broke the link between staying in residential property and owning it. Airbnb is a specific example of a business model innovation which separated asset use from ownership. This is hardly a novel idea; it’s called renting. Rental models lend themselves to assets which are expensive and durable, and where usage is infrequent.”
9. American Express Company (NYSE:AXP)
Number of Hedge Fund Holders: 64
American Express Company (NYSE:AXP) is a New York-based company that provides charge and credit card products, as well as travel-related services worldwide. American Express Company (NYSE:AXP) operates through three segments – Global Consumer Services Group, Global Commercial Services, and Global Merchant and Network Services. Ray Dalio’s 13F filings reveal that his hedge fund added American Express Company (NYSE:AXP) to its Q1 2022 portfolio by buying 4,640 shares worth $868,000.
On May 4, the company declared a quarterly dividend of $0.52 per share, in line with previous. The dividend is payable on August 10, to shareholders of record on July 1. The company reported above consensus earnings for Q1 on April 22, posting an EPS of $2.73 and a revenue of $11.74 billion. The revenue grew almost 29.5% as compared to the same quarter last year.
Wolfe Research analyst Bill Carcache downgraded American Express Company (NYSE:AXP) on May 12 to Peer Perform from Outperform with a $146 price target. The analyst downgraded the credit card issuers group to Underweight from Market Weight on his view that a recession is on the horizon.
According to Insider Monkey’s Q4 database, 64 hedge funds were long American Express Company (NYSE:AXP), compared to 57 funds in the earlier quarter. In Q1 2022, Warren Buffett’s Berkshire Hathaway held the biggest stake in the company, consisting of 151.6 million shares worth $28.35 billion.
Here is what ClearBridge Investments has to say about American Express Company (NYSE:AXP) in its Q2 2021 investor letter:
“In financials, American Express has done an excellent job demonstrating the resiliency of its franchise in the midst of a global pandemic that drove a 60% decline in its core travel and entertainment business. The company’s spend-centric model has been helped by fiscal stimulus ensuring a flush consumer, while management continues to execute well by adding millions of new consumer and small and medium business accounts, which should benefit the franchise over the medium to long term. We remain optimistic regarding the company’s prospects as travel and entertainment activity rebounds, adding to our position in the quarter.”
8. Medtronic plc (NYSE:MDT)
Number of Hedge Fund Holders: 55
Medtronic plc (NYSE:MDT) is an American medical device company headquartered in Dublin, Ireland, operating via Cardiovascular Portfolio, Neuroscience Portfolio, Medical Surgical Portfolio, and Diabetes Operating Unit segments. Ray Dalio’s Bridgewater Associates purchased 1.88 million Medtronic plc (NYSE:MDT) shares in the first quarter of 2022, worth $208.5 million, representing 0.84% of the total 13F securities.
On May 17, Citi analyst Joanne Wuensch reiterated a Buy rating on Medtronic plc (NYSE:MDT) but lowered the firm’s price target on the stock to $120 from $127. According to the analyst, market multiples are contracting given soaring inflation, shrinking growth, and rising interest rates. Where medical technology stands in this volatile market is uncertain, added the analyst.
Among the hedge funds tracked by Insider Monkey, 55 funds were long Medtronic plc (NYSE:MDT) at the end of the fourth quarter of 2021, compared to 62 funds in the earlier quarter. The total stakes owned in Q4 amounted to $2.78 billion, up from $2.27 billion in Q3. Ric Dillon’s Diamond Hill Capital disclosed a significant stake in Medtronic plc (NYSE:MDT) in Q1 2022, with 4.11 million shares worth $456 million.
Here is what Polen International Growth has to say about Medtronic plc (NYSE:MDT) in its Q4 2021 investor letter:
“The top absolute detractors during the quarter (includes) Medtronic. Shares of Medtronic underperformed during the quarter on what we see as short-term setbacks in its Renal Denervation technology and HUGO robotic surgery platform. Both are pipeline prospects that could be sources of revenue growth if Medtronic can successfully commercialize them. However, they are not generating meaningful sales today. Looking ahead, we believe Medtronic’s management is handling this world-leading tech business well and that its growth prospects remain compelling.”
7. PayPal Holdings, Inc. (NASDAQ:PYPL)
Number of Hedge Fund Holders: 110
PayPal Holdings, Inc. (NASDAQ:PYPL) is a California-based company that operates a technology platform to enable digital payments on behalf of merchants and consumers worldwide. Ray Dalio purchased 114,312 shares of PayPal Holdings, Inc. (NASDAQ:PYPL) in the first fiscal quarter of 2022, worth $13.22 million.
On May 17, PayPal Holdings, Inc. (NASDAQ:PYPL) priced its offering of $3 billion of senior notes in four tranches, consisting of $500 million of 3.900% notes due 2027, $1 billion of 4.400% notes due 2032, $1 billion of 5.050% notes due 2052, and $500 million of 5.250% notes due 2062. The offering is expected to close on May 23, 2022.
PayPal Holdings, Inc. (NASDAQ:PYPL) reported earnings for Q1 2022 on April 27, posting a GAAP EPS of $0.43, missing estimates by $0.05. The company’s revenue of $6.48 billion outperformed analysts’ predictions by $75.59 million.
Morgan Stanley analyst James Faucette on May 10 reiterated an Overweight rating on PayPal Holdings, Inc. (NASDAQ:PYPL) but lowered the price target on the shares to $137 from $139, citing his view that the market is missing PayPal Holdings, Inc. (NASDAQ:PYPL)’s strong performance as it continues to outpace underlying e-commerce growth.
According to Insider Monkey’s fourth quarter database, 110 hedge funds were long PayPal Holdings, Inc. (NASDAQ:PYPL), compared to 123 funds in the preceding quarter. Ken Fisher of Fisher Asset Management disclosed a significant stake in the company in Q1 2022, with 16.7 million shares worth $1.94 billion.
Here is what ClearBridge Investments Large Cap Growth Strategy has to say about PayPal Holdings, Inc. (NASDAQ:PYPL) in its Q1 2022 investor letter:
“We entered a position in PayPal in December well aware of the electronic payment platform’s ambitious goals for user growth. The company has started to experience a reduction in revenue growth due to weakening in the macro environment and a deceleration in e-commerce broadly due to reopening headwinds and difficult comps. This led to a sharply reduced outlook for 2022 revenue and long-term earnings that has weighed on the stock. We initiated a position after the shares had already fallen 40% from their all-time high but were wrong in modeling that a muted outlook was already priced in. Nevertheless, we believe PayPal is fundamentally holding share in the industry and is set up for continued growth in e-commerce once reopening headwinds pass. The company onboarded nearly 120 million net new users over the last few years; naturally, many users will churn off the platform. We also see the company’s strategy to add additional use cases to its wallet such as investing, crypto, savings accounts and bill pay as catalysts to accelerate revenue growth over time.”
6. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 110
NVIDIA Corporation (NASDAQ:NVDA) was incorporated in 1993 and is headquartered in Santa Clara, California. The company provides graphics, compute, and networking solutions in the United States, Taiwan, China, and internationally. Ray Dalio added NVIDIA Corporation (NASDAQ:NVDA) to his portfolio by purchasing 59,938 shares of the company in Q1 2022, worth $16.35 million.
On May 20, Wells Fargo analyst Aaron Rakers maintained an Overweight rating on NVIDIA Corporation (NASDAQ:NVDA) but lowered the firm’s price target on the shares to $250 from $370 ahead of the Q1 report on May 25. The analyst expects NVIDIA Corporation (NASDAQ:NVDA) to announce robust Data Center growth, and thinks the company’s demand visibility, momentum, and Hopper product cycle will be the primary focus for investors. Any indications of deceleration would be an incremental negative, the analyst told investors in a research note.
Among the hedge funds tracked by Insider Monkey, 110 hedge funds were bullish on NVIDIA Corporation (NASDAQ:NVDA) at the end of Q4 2021, up from 83 funds in the prior quarter. Phill Gross and Robert Atchinson’s Adage Capital Management held a prominent stake in the company in Q1 2022, with 2.5 million shares worth $694.4 million.
Like The Procter & Gamble Company (NYSE:PG), Johnson & Johnson (NYSE:JNJ), and The Coca-Cola Company (NYSE:KO), elite investors are piling into NVIDIA Corporation (NASDAQ:NVDA).
Here is what RiverPark Long/Short Opportunity Fund has to say about NVIDIA Corporation (NASDAQ:NVDA) in its Q1 2022 investor letter:
“Nvidia is the leading designer of graphics processing chips (commonly known as GPU’s- graphics processing units), required for powerful computer processing. Over the past 20 years, the company has evolved through innovation and adaptation from a predominantly gaming- focused chip vendor to one of the largest semiconductor/software vendors in the world, dominating the core secular growth markets of gaming, data centers and professional visualization. Over the past decade, the company has grown revenue at a compound annual rate of over 20% while expanding operating margins and, through its asset light business model, producing ever increasing amounts of free cash flow. For 2021 the company generated 61% revenue growth to $27 billion, expanded its EBITDA margins to over 44% and generated over $8 billion of free cash flow. Over the past five years, the company has generated a cumulative $23 billion of FCF after cumulative capital expenditures of less than $4 billion.
We expect future growth to remain robust as NVDA chips and software are critical to many of the core technologies being adopted globally, including cloud computing, virtual reality and advanced artificial intelligence. As with NFLX, we took advantage of the over 40% recent drop in the company’s shares over the last several months to initiate a small position.”
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Disclosure: None. Ray Dalio is Buying These 10 Stocks in 2022 is originally published on Insider Monkey.
