Bridgewater Associates, the hedge fund founded by Ray Dalio (Trades, Portfolio), disclosed in a regulatory portfolio update filing that its top five trades during the fourth quarter of 2022 included a new position in JPMorgan Chase & Co. (JPM, Financial) and reductions to its holdings of four consumer defensive stocks: Proctor & Gamble Co. (PG, Financial), Johnson & Johnson (JNJ, Financial), Coca-Cola Co. (KO, Financial) and PepsiCo Inc. (PEP, Financial).
Dalio founded the Greenwich, Connecticut-based firm in 1975. Bridgewater's portfolio management team applies Dalio’s key principles, which include employing radical truth and transparency, encouraging open and honest dialogue and allowing the best thinking to prevail.
Dalio stepped down as co-chief investment officer of Bridgewater in October 2022 as part of his succession plan to convert the firm into an employee-owned business. As of December 2022, the firm’s $18.32 billion 13F equity portfolio contains 822 stocks with a quarterly turnover ratio of 8%. The top four sectors in terms of weight are consumer defensive, health care, financial services and consumer cyclical, representing 27.88%, 19.78%, 10.51% and 9.79% of the equity portfolio.
Investors should be aware 13F filings do not give a complete picture of a firm’s holdings as the reports only include its positions in U.S. stocks and American depository receipts, but they can still provide valuable information. Further, the reports only reflect trades and holdings as of the most-recent portfolio filing date, which may or may not be held by the reporting firm today or even when this article was published.
JPMorgan Chase
Bridgewater purchased 692,356 shares of JPMorgan Chase (JPM, Financial), giving the position 0.51% equity portfolio weight.
Shares of JPMorgan Chase averaged $126.71 during the fourth quarter; the stock is fairly valued based on its price-to-GF Value ratio of 0.98 as of last Friday.
The New York-based bank has a GF Score of 78 out of 100 based on a momentum rank of 10 out of 10, a financial strength rank of 4 out of 10 and a rank of 6 out of 10 for profitability, growth and GF Value.
JPMorgan Chase’s financial strength ranks 4 out of 10 on the back of cash-to-debt and debt-to-equity ratios underperforming more than 60% of global competitors.
Other gurus with holdings in JPMorgan Chase include PRIMECAP Management (Trades, Portfolio) and Ken Fisher (Trades, Portfolio)’s Fisher Investments.
Proctor & Gamble
The firm sold 1,619,286 shares of Proctor & Gamble (PG, Financial), slicing 24.49% of the position and 1.04% of its equity portfolio.
Shares of Proctor & Gamble averaged $140.19 during the fourth quarter; the stock is fairly valued based on its price-to-GF Value ratio of 0.92 as of last Friday.
The Cincinnati-based consumer products company has a GF Score of 86 out of 100 based on a profitability rank of 8 out of 10, a financial strength rank of 6 out of 10 and a rank of 7 out of 10 for growth, GF Value and momentum.
Proctor & Gamble’s profitability ranks 8 out of 10 on several positive investing signs, which include a return on equity that outperforms approximately 92% of global competitors and an operating margin that has increased by approximately 2.4% per year on average over the past five years.
Johnson & Johnson
The firm sold 1,144,625 shares of Johnson & Johnson (JNJ, Financial), trimming 24.29% of the position and 0.95% of its equity portfolio.
Shares of Johnson & Johnson averaged $172.66; the stock is modestly undervalued based on its price-to-GF Value ratio of 0.90 as of last Friday.
The New Brunswick, New Jersey-based drug manufacturing company has a GF Score of 92 out of 100 based on a momentum rank of 10 out of 10, a profitability rank of 9 out of 10, a growth rank of 8 out of 10 and a rank of 7 out of 10 for financial strength and GF Value.
Johnson & Johnson’s profitability ranks 9 out of 10 on several positive investing signs, which include a three-star business predictability rank, a high Piotroski F-score of 8 out of 9 and an operating margin that outperforms approximately 91% of global competitors.
Coca-Cola
Bridgewater sold 3,045,898 shares of Coca-Cola (KO, Financial), trimming 26.56% of its position and 0.86% of its equity portfolio.
Shares of Coca-Cola averaged $60.37 during the fourth quarter; the stock is fairly valued based on its price-to-GF Value ratio of 0.92 as of last Friday.
The Atlanta-based beverage giant has a GF Score of 83 out of 100 based on a rank of 8 out of 10 for momentum and profitability, a financial strength rank of 5 out of 10 and a rank of 6 out of 10 for GF Value and growth.
Coca-Cola's profitability ranks 8 out of 10 on several positive investing signs, which include a high Piotroski F-score of 7 out of 9 and an operating margin that has increased by approximately 0.3% per year on average over the past five years and outperforms over 93% of global competitors.
PepsiCo
Bridgewater sold 1,000,913 shares of PepsiCo (PEP, Financial), slicing 24.89% of the position and 0.83% of its equity portfolio.
Shares of PepsiCo averaged $178.37 during the fourth quarter; the stock is fairly valued based on its price-to-GF Value ratio of 0.97 as of Friday.
The Purchase, New York-based snack and beverage company has a GF Score of 90 out of 100 based on a momentum rank of 10 out of 10, a profitability rank of 9 out of 10, a growth rank of 8 out of 10, a GF Value rank of 6 out of 10 and a financial strength rank of 5 out of 10.
PepsiCo has a profitability rank of 9 out of 10 on several positive investing signs, which include a high Piotroski F-score of 7 out of 9 and a gross profit margin that outperforms over 87% of global competitors.
