Bridgewater Associates, the hedge fund founded by renowned billionaire investor Ray Dalio (Trades, Portfolio), is known for its culture of radical transparency, considering itself an “idea-meritocracy” where the best ideas win.
Founded in 1975, the Greenwich, Connecticut-based firm employs a host of analysts and quantitative traders to manage vast portfolios for numerous individual, institutional and sovereign clients.
In a CNBC interview with Sara Eisen on Thursday during a fireside chat at the Managed Funds Association, Dalio said he is closely monitoring the “risky” U.S. fiscal situation.
“We’re going to have a debt crisis in this country,” he said. “How fast it transpires, I think, is going to be a function of that supply-demand issue, so I’m watching that very closely.”
While the legendary founder of Bridgewater Associates is no longer in charge of its day-to-day operations, he still acts as a mentor to the chief investment officer and is a member of the board. As such, his influence is still very much a factor in its portfolio decisions.
Based on Dalio’s predictions for the future of the market, investors may be curious to know what financial stocks Bridgewater is invested in as of the second quarter. For the three months ended June 30, 13F filings show the firm’s five largest financial services holdings are Visa Inc. (V, Financial), PayPal Holdings Inc. (PYPL, Financial), Mastercard Inc. (MA, Financial), Tradeweb Markets Inc. (TW, Financial) and MarketAxess Holdings Inc. (MKTX, Financial).
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.
Visa
In the second quarter, Bridgewater increased its stake in Visa (V, Financial) by 2.70% to 1.01 million shares. The holding accounts for 1.49% of the equity portfolio. GuruFocus estimates Dalio’s firm has gained 6.02% on the investment over its lifetime.
The San Francisco-based credit card company has a $481.70 billion market cap; its shares were trading around $231.61 on Thursday with a price-earnings ratio of 29.39, a price-book ratio of 12.96 and a price-sales ratio of 15.28.
The GF Value Line suggests the stock is modestly undervalued based on historical ratios, past financial performance and analysts’ future earnings projections.
At 98 out of 100, the GF Score indicates the company has high outperformance potential. It received high ratings for all five criteria: profitability, growth, value, momentum and financial strength.
PayPal
The firm trimmed its PayPal (PYPL, Financial) investment by 3.26% to 1.50 million shares, which represents 0.62% of the equity portfolio. GuruFocus data shows Bridgewater has lost 21.08% on the holding to date.
The fintech company headquartered in San Jose, California, which facilitates online money transfers, has a market cap of $63.90 billion; its shares traded around $58.20 on Thursday with a price-earnings ratio of 16.30, a price-book ratio of 3.26 and a price-sales ratio of 2.32.
According to the GF Value Line, the stock is significantly undervalued currently.
The GF Score of 92 implies the company has high outperformance potential, driven by solid ratings for profitability and growth as well as more moderate financial strength, momentum and value ranks.
Mastercard
Dalio’s firm curbed the Mastercard (MA, Financial) position by 49.04% to 154,805 shares, giving it 0.38% space in the equity portfolio. GuruFocus found it has gained 4.54% on the investment.
The Purchase, New York-based payment processing company has a $376.36 billion market cap; its shares were trading around $399.44 on Thursday with a price-earnings ratio of 37.44, a price-book ratio of 68.40 and a price-sales ratio of 16.29.
Based on the GF Value Line, the stock appears to be modestly undervalued currently.
The GF Score of 97 means the company has high outperformance potential on the back of high ratings for four of the criteria as well as a more moderate financial strength rank.
Tradeweb Markets
Bridgewater upped its holding of Tradeweb Markets (TW, Financial) by 0.06% to 741,589 shares. The stock occupies 0.31% of its equity portfolio. According to GuruFocus, it has gained 6.92% on the investment.
Headquartered in New York City, the company, which operates an electronic trading platform for fixed income, derivatives and exchange-traded funds, has a market cap of $17.05 billion; its shares traded around $80.58 on Thursday with a price-earnings ratio of 50.68, a price-book ratio of 3.29 and a price-sales ratio of 13.85.
The GF Value Line suggests the stock is fairly valued currently.
Supported by high rating for four of the criteria and a low value rank, the GF Score is 86. This means the company has good outperformance potential.
MarketAxess Holdings
During the second quarter, the firm upped its position in MarketAxess by 23.33% to 181,657. It has 0.29% weight in the equity portfolio. GuruFocus says it has lost 9.89% on the investment.
The New York-based fintech company, which operates and electronic trading platform, has a $7.89 billion market cap; its shares were trading around $209.43 on Thursday with a price-earnings ratio of 31.21, a price-book ratio of 6.77 and a price-sales ratio of 10.77.
According to the GF Value Line, the stock is significantly undervalued currently.
The GF Score of 97 means the company has high outperformance potential. While four of the criteria received solid ratings, momentum is more moderate.
Additional top holdings
Other financial services stocks in Bridgewater’s equity portfolio include CME Group Inc. (CME, Financial), Interactive Brokers Group Inc. (IBKR, Financial), Citigroup Inc. (C, Financial), MetLife Inc. (MET, Financial) and Sprott Inc. (SII, Financial).
