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The Dalio Dynasty: Unraveling The Crown Jewels Of The World’s Biggest Hedge Fund’s Portfolio – Costco Wholesale (NASDAQ:COST), Coca-Cola (NYSE:KO)

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Ray Dalio is the founder and former CEO of Bridgewater Associates, the world’s largest hedge fund, with nearly $125 billion in total assets under management. With a net worth of over $15 billion, Dalio is one of the most successful investors of all time. He’s known for his strategic bets navigating the markets during times of macroeconomic uncertainty. Dalio delivered a 9% profit during the 2008 financial crisis when stocks were down by nearly 37%. 

Dalio claims his success lies in timing the markets perfectly, as he often touts the importance of conducting proper macroeconomic research. 

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“It’s impossible to separate economics from managing money. Doing economic research makes me a better trader,” Dalio said. 

Take a look at some of Bridgewater’s biggest holdings.

Proctor & Gamble Co.

Procter & Gamble Co. (NYSE:PG) is one of the world’s largest consumer staples companies with a market cap of over $347 billion. Given the increased market volatility amid speculation over delayed rate cuts, Proctor & Gamble stock could be an excellent defensive pick. Bridgewater Associates holds 4.8 million shares of Proctor & Gamble, which accounts for approximately 4.23% of its portfolio. 

Proctor & Gamble is also a dividend aristocrat as the company has raised its dividend payouts for 67 consecutive years. It currently pays $3.76 in dividends annually, yielding 2.55% on the current price. The company’s financials have grown substantially over the past year with net sales increasing 6% year over year to $21.9 billion in the fiscal 2024 first quarter that ended Sept. 30. The company’s earnings per share (EPS) increased 17% from the same period last year to $1.83. 

Both JPMorgan and Barclays have an Overweight rating on Proctor & Gamble stock. JPMorgan has a price target of $162, indicating a potential upside of nearly 10%. On the other hand, Barclays has a price target of $160, reflecting a potential upside of over 8%. 

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Coca-Cola Co.

Bridgewater Associates held 9 million shares of the Coca-Cola Co. (NYSE:KO) as of Sept. 30. Approximately 3.04% of its portfolio is invested in Coca-Cola stock.

Coca-Cola stock has surged by 1.53% year to date, outperforming the S&P 500 index. The company’s leading market share makes it well-positioned to weather an economic slowdown. Analysts expect Coca-Cola’s EPS to rise at a compound annual growth rate (CAGR) of 6.2% over the next five years.

The dividend aristocrat company allocated $5.3 billion toward dividends and share repurchases during the first nine months of 2023, magnifying shareholder returns. Barclays has an Overweight rating on Coca-Cola stock with a price target of $66, indicating a potential upside of over 10%. 

Costco Wholesale Corp.

Bridgewater Associates owns over 828,000 shares of Costco Wholesale Corp. (NASDAQ:COST), one of the largest retailers in the U.S. Costco is Bridgewater Associate’s third-largest stock holding, accounting for 2.83% of its portfolio. 

Shares of Costco have risen by 5.29% this year, outperforming the Nasdaq Composite Index. The company has reported robust growth in its monthly sales, as its net sales for December rose 9.9% year over year to $26.15 billion. 

This trajectory is expected to continue, as analysts expect the company’s revenue to rise 6.5% year over year to $58.83 billion in the fiscal 2024 second quarter ending in February. The consensus EPS estimate of $3.57 for the ongoing quarter indicates an 8.3% rise year over year. 

Costco is cracking down on membership sharing, which accounts for nearly 72% of the retailer’s profits. This move could boost the retailer’s profit margins significantly in the near term. 

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Photo courtesy: World Economic Forum On Flickr


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