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Bridgewater Associates buys HPQ, RL, and GE and sells TSO, BEN, and CTSH—13F Flash B

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Nov. 20 2020, Updated 12:26 p.m. ET

Bridgewater Associates is an investment management firm founded by Ray Dalio in 1975 and based in Westport, Connecticut. It manages approximately $150 billion in global investments for a wide array of institutional clients, including foreign governments and central banks, corporate and public pension funds, university endowments, and charitable foundations. It’s a pioneer in risk budgeting and the separation of alpha and beta, managing portable alpha/global tactical asset allocation (GTAA), hedge fund, optimal beta/risk parity, currency overlay, global fixed income, and inflation-indexed bond mandates.

Abbreviated financial summaries and metrics for these securities are included below. Detailed analysis and recommendations require a subscription (more information at the bottom of the article).

Bridgewater Associates started new positions in Hewlett-Packard Co. (HPQ), Ralph Lauren Corp. (RL), and General Electric Co. (GE) and sold Tesoro Corp. (TSO), Franklin Resources Inc. (BEN), and Cognizant Tech Solutions (CTSH).

Why buy Ralph Lauren Corp. (RL)?

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Ralph Lauren said its second quarter net revenues increased 3% to $1.9 billion. It said that, excluding the net negative impact from foreign currency translation and discontinued businesses, net revenues increased approximately 4% in the second quarter. It added that growth in the Americas, Europe, and most of Asia was partially offset by lower sales in Japan. Its board declared an increase in the quarterly cash dividend to $0.45 per share. For the third quarter of fiscal 2014, it expects consolidated revenues to increase 8% to 10%, with wholesale growing faster than retail sales. Foreign currency is estimated to negatively impact revenue growth by approximately 100 basis points in the third quarter, and it will primarily affect the company’s retail segment, given its geographically mixed business. The company will intensify its investment in global retail operations in the second half of fiscal 2014. This will include incremental spending on store operations and its omni-channel efforts in addition to more advertising and marketing spending. It expects strong sales in the holiday season. It further said the board’s decision to raise the quarterly cash dividend by 12.5% demonstrates its conviction in the company’s operating strategies and growth prospects.

Bridgewater Associates founder Ray Dalio received a BA from Long Island University and an MBA from Harvard Business School. He founded Bridgewater in 1975 in his New York City brownstone apartment. At the time, he actively traded commodities, currencies, and credit markets. His initial business was providing risk consulting to corporate clients as well as offering a daily written market commentary titled “Bridgewater Daily Observations” that’s still produced. Bridgewater’s competitive edge was creative and quality analysis. According to Dalio, Bridgewater Associates is a “global macro firm.” It uses “quantitative” investment methods to identify new investments while avoiding unrealistic historical models. Its goal is to structure portfolios with uncorrelated investment returns based on risk allocations rather than asset allocations. In 1989, it launched its flagship fund, Pure Alpha, a hedge fund/GTAA/portable alpha strategy. In 1996, it launched a second fund, All Weather, a diversified beta strategy/risk parity portfolio.

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