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Ray Dalio founded Bridgewater Associates, an American investment management firm, in 1975. It is reported to be the world's largest hedge fund company with $122 billion in assets under management. The company has 270 clients, including pension funds, endowments, foundations, foreign governments and central banks. It utilizes a global macro investing style that adapts to changes in economic trends, such as inflation, currency exchange rates, and U.S. gross domestic product.

We believe that by imitating the stock picks of the smartest investors, such as Ray Dalio and corporate insiders, investors are more likely to beat the market. Below we compiled a list of stocks both Ray Dalio and insiders love. These are Ray Dalio's holdings with at least $15 million, and the Insiders column shows the number of unique insiders purchasing their companies’ stocks since the beginning of March.

Company

Ticker

Value (x1000)

Insider Purchases

YTD Return

GENERAL ELECTRIC

(NYSE:GE)

43590

2

-14.7%

APPLIED MATERIALS

(NASDAQ:AMAT)

42550

1

-23.4%

PARKER HANNIFIN

(NYSE:PH)

34551

1

-27.9%

DOW CHEMICAL CO

(NYSE:DOW)

32954

2

-32.0%

ROBERT HALF INTL

(NYSE:RHI)

32675

1

-33.2%

ILLINOIS TOOL WORKS

(NYSE:ITW)

32129

1

-20.6%

MICROCHIP TECH

(NASDAQ:MCHP)

32020

1

-3.5%

MANPOWER INC

(NYSE:MAN)

30496

1

-48.2%

NORDSTROM INC

(NYSE:JWN)

30085

4

6.50%

JABIL CIRCUIT

(NYSE:JBL)

29676

1

-21.2%

FEDEX CORP

(NYSE:FDX)

29413

1

-27.5%

DILLARDS INC

(NYSE:DDS)

28941

1

16.4%

ALCOA INC

(NYSE:AA)

28878

1

-35.9%

GENUINE PARTS CO

(NYSE:GPC)

27971

1

-3.0%

AMERICAN EAGLE

(NYSE:AEO)

27448

4

-21.0%

HUNT J B TRANSPORT

(NASDAQ:JBHT)

26746

2

-11.9%

FASTENAL COMPANY

(NASDAQ:FAST)

26741

4

15.0%

CADENCE DESIGN SYS

(NASDAQ:CDNS)

24984

3

12.5%

LEXMARK INTL

(NYSE:LXK)

22430

1

-20.3%

MARRIOTT INTL

(NASDAQ:MAR)

21570

2

-34.7%

JOHNSON & JOHNSON

(NYSE:JNJ)

19956

1

0.7%

EXXON MOBIL CORP

(NYSE:XOM)

18571

1

-5.4%

ORACLE CORP

(NYSE:ORCL)

17455

1

-8.1%

MERCK & CO INC

(NYSE:MRK)

17373

2

-10.8%

AFLAC INC

(NYSE:AFL)

17270

1

-44.3%

TESORO CORP

(NYSE:TSO)

16069

2

0.5%

CLIFFS NATURAL

(NYSE:CLF)

15582

3

-28.8%

Ray Dalio’s largest position with at least two insider purchases is GE. Ray Dalio had $43.6 million in GE, and two insiders, William Beattie and Jeffrey Immelt, purchased a total of 45,000 shares of the stock in May and March. General Electric is an American multinational conglomerate corporation. It lost 14.74% since the beginning of this year. It has a market cap of $160.17 billion and a P/E ratio of 11.89. Miller held $170.7 million in GE shares by the end of June. Ray Dalio, Ken Fisher and Ken Griffin increased their position in GE in Q2.

In the second quarter, Ray Dalio initiated a new $27.4 million American Eagle Outfitters position. American Eagle Outfitters is an American clothing and accessories retailer based in Pittsburgh, Pennsylvania. It has a market cap of $2.35B and a P/E ratio of 14.21. AEO lost 20.95% since the beginning of the year and lost 10.78% since the end of June. Four insiders, Jay Schottenstein, Michael Jesselson, Janice Page and Joseph Noel Spiegel, bought a total of 1.1 million shares in August and September. These recent activities might indicate a good investment at this time.

Ray Dalio largely increased his position in Manpower Inc twofold in the second quarter, and he had $30.5 Million in MAN at the end of June. William Downe bought 6,000 shares on Aug 8. Manpower is a world leader in the workforce solutions, creating and delivering services that enable its clients to win in the changing world of work. MAN has a market cap of $2.78B and it lost 48.17% since the beginning of the year and 38.38% since the end of June. The stock might be undervalued at this time.

Nordstrom Inc is another company with the biggest number of insider purchases since March. Four insiders bought JWN since then. Nordstrom is an upscale department store chain in the United States. It has a market cap of $10.24 billion and a P/E ratio of 16. It returned 6.5% since the beginning of this year. Ray Dalio increased 92% shares in JWN and held $30 million in JWN shares by the end of June. Obviously Ray Dalio was thinking that JWN was a good investment. Now many insiders have joined him too. This might be a great time to buy JWN, when hedge funds and insiders agree that the stock has great potential.

Among all the stocks Ray Dalio and insiders like, DDS, FAST, CDNS, JWN and JNJ achieved the highest returns since the end of June, while MAN, AFL, AA, MAR and RHI performed worst. Although some of the stocks picked by Ray Dalio and insiders underperformed the market, we still believe that investors can outperform the market over the long term by focusing on the stock picks of these smart and connected investors.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: Stocks Ray Dalio And Insiders Love