2 Shares Ray Dalio’s Bridgewater Associates bought Hand Over Fist

Since Bridgewater Associates founded in 1975, Ray Dalio grew the investment firm to the largest hedge fund in the world with over $124 billion in assets under management (AUM). With nearly 900 stocks in his portfolio, Dalio has a finger in many pies.

His investment strategy is based on the concept of risk parity, or diversifying investments across multiple stocks based on how volatile they are, and can use leverage to improve returns. In recent years, however, Bridgewater has lagged behind the market and seen money withdraw from the fund. Similar funds also lagged behind Forbes funds reporting risk parity lost to global 60/40 funds – or funds with 60% of their investments in stocks and 40% in US Treasuries – every year since 2019.

However, Bridgewater is no longer run by its founder. Dalio stepped back from day-to-day oversight in 2020 and will retire in 2022. However, he has been looking over the shoulder of current management to ensure he maintains the performance for which he was noted. There were rumors about him it might even come back at the management of the speculative fund last year.

The hedge fund, however, was keeping up with the benchmark S&P 500 in 2024, returning over 14% in the first six months of the year. Dalio’s fund has been pouring a lot of money into a handful of companies lately, and the two stocks below are the ones that have seen 500% increases in stocks bought in the most recent period.

Key points about this article:

• Ray Dalio’s Bridgewater Associates was founded in 1975 and has grown to become the world’s largest hedge fund with $124 billion in assets under management.
• With nearly 900 stocks in its portfolio, Bridgewater has bought a large amount of stock for just a few companies, and the two below are the largest amounts purchased by the fund in the past quarter.
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ExxonMobil (XOM)

Exxon gas station sign

The integrated oil and gas giant ExxonMobil (NYSE:XOM) had the biggest share change in the second quarter. Bridgewater Associates went from owning 151,000 shares at the end of the first quarter to more than 941,000 shares at the end of the second, an increase of 521%.

Exxon’s dominance in the important Permian Basin may drive the hedge fund’s investment decision. After the oil stock’s acquisition of Pioneer Natural Resources last year, Exxon rose to prominence as the biggest player in the space with 1.4 million net acres.

However, XOM stock has traded in a fairly narrow band over the past six months, hovering between $110 per share and $120 per share. Oil prices fell after OPEC+ countries cut production and China’s economy continued to slow.

The benchmark US West Texas Intermediate crude fell as low as $65.75 a barrel last week – the lowest price in three years – but has since rebounded to above $71 a barrel.

Because Exxon has not followed its industry peers as deeply into the renewables fund, but instead focuses on its core fossil fuel development strength, it can be sensitive to the price of oil. However, with the Permian being one of the world’s most prolific fields, just as the US has become the largest oil producer, long-term demand for oil will keep Exxon Mobil growing.

Cameco (CCJ)

Nuclear reactor cooling towers

Uranium miner Cameo (NYSE:CCJ) is the second largest acquisition of the quarter for Bridgewater Associates. He increased his holdings from 347,000 shares to nearly 2.1 million shares, an increase of nearly 500%. The total value of hedge funds is $101 million. But at an average purchase price of $44 per share, Bridgewater has a loss of about 9%. That could very well change.

Although uranium prices have retreated from their March highswhich had represented a fourfold increase in price from a 12-year low in 2016, uranium is still three times more expensive than it was. The reason is that the demand for nuclear power is increasing. More than 20 countries have applied tripling nuclear capacity until 2050.

Cameco is one of the world’s largest uranium miners, owning mines in Saskatchewan and the US. It also has a 40% stake in a joint venture with Kazatomprom for a mine in Kazakhstan. Its main supply has annual commitments from 2024 to 2028 increased in the second quarter at an average of around £29 million a year.

With the U.S. government supporting the construction of small modular reactors while streamlining licensing requirements, Cameco has a long-term tailwind that should push its stock much higher going forward.

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