The market faces upside risks in 2021: Morning Brief

TipRanks

Billionaire Ray Dalio Picks Up These 3 “Strong Buy” Stocks

Sometimes, the experts will tell us what we already know. Ray Dalio, the founder of Bridgewater Associates, has built a legendary reputation in financial circles, for taking his firm from a home business in his two-bedroom apartment to the international hedge fund giant, employing over 1,500 people and managing more than $138 billion in total assets. But when questioned on how he did it, or how today’s investors can survive the ongoing pandemic crisis, his advice can sound downright ordinary.Dalio’s advice for investing during the pandemic can be summed up easily enough. First, he says to diversify the portfolio. Diversification means spreading out the risk, which in turn will reduce your losses should one – or even several – investments turn south. Second, Dalio tells us not to bother trying to ‘time the market.’ Even the pros don’t usually get this right, and Dalio says that simply buying into a stock you like, and holding it long term, is a better strategy then trying to buy in at the right time. The stock market is a risky place to put your money, and Dalio understands that. His tactics for mitigating that risk are age-old – and have arguably brought him great success. Bearing this in mind, we decided to look at Bridgewater’s recent activity for inspiration. Running three stocks Dalio’s fund picked up during Q3 through TipRanks’ database, we found out that the analyst community is also on board, as each sports a “Strong Buy” consensus rating.Baxter International (BAX)We will start with Baxter International, a healthcare company based outside of Chicago. Baxter produces medical devices and other products for the treatment of acute and chronic conditions, particularly blood, immune, and kidney diseases. The company markets mainly to healthcare professionals and institutions, rather than the open market, and boasts over $11 billion in annual revenue.The company’s revenues through 2020 have been stable, and in-line with historical values. Baxter ended 2019 with a $3 billion quarter; that slipped to $2.72 billion 1Q20, but had risen steadily to $2.97 billion by 3Q20. The company pays out a modest dividend for investors, which at 24.5 cents per common share gives a yield of 1.3%.Dalio’s position in Baxter is a new one for him. His firm bought up 124,701 shares of the stock, a holding that is worth $9.73 million at current prices.5-star analyst Danielle Antalffy, of SVB Leerink, writes of Baxter, “[We] see BAX’s underlying fundamentals — accelerating sales growth, meaningful margin expansion — as unchanged. One of the most meaningful datapoints in this quarter was 6% peritoneal dialysis patient growth… well ahead of the mid-single-digit long-term growth outlook for the Renal business that the Street is modeling. As the COVID pressures begin to lift, visibility into the long-term growth drivers should improve, and we would expect the…