In today’s top stories, billionaire hedge fund managers are in the spotlight. Ray Dalio sees further downside pressure in emerging tech stocks, while Warren Buffett was found to be purchasing equities again in Q1. In other news, the SEC is investigating Didi’s IPO and the tech group MANTA is seen as a better bet than FAANG.
Emerging tech bubble bursts
Ray Dalio (pictured) warned in January that emerging tech companies, such as Roku [ROKU] and Tesla [TSLA], were in a bubble. Since then, those stock have popped, declining by 33% over the past year. But the founder of Bridgewater Associates doesn’t think it’s a good time to buy these stocks. “History shows that once the popping begins, bubbles more often overcorrect to the downside versus settling at more ‘normal’ prices.”
Despite economic headwinds of rising inflation and interest rates, the UK house builder has released a promising financial outlook. The company said it was on track to meet if full-year guidance and that it would pay a 4.44p dividend per share in May. Robust house prices and consumer appetite have helped Taylor Wimpey offset rising labour and material costs.
SEC investigates Didi’s IPO
The company revealed in a filing that it was approached by the SEC after its IPO in the US, which had already been under investigation by Chinese authorities last year. The Chinese ride-hailing firm’s US-listed shares were unaffected by the news, closing up 1% on Wednesday. Shareholders are set to vote on plans for Didi [DIDI] to delist from the NYSE and instead list in Hong Kong on 23 May.
Since reaching an all-time high of $57.51 on 28 June last year, the stock has fallen 86.3% amid space flight delays and Chamath Palihapitiya stepping down from the board of directors in February. The company has its hopes set on robust ticket sales for its next-generation Delta class ships that are due to be added to the fleet in late 2023 or 2024.
This earnings season, many stocks have seen share prices rise off the back of better-than-expected figures due to subdued valuations. As of Tuesday, two-thirds of companies listed in the S&P 500 have reported financial results. Any stock that beat forecasts has seen an average share price gain of 1.4% the day after the announcement, according to data by Credit Suisse seen by Barron’s.
Warren Buffett’s shopping spree
During the post-Covid-19 selloff, the CEO of Berkshire Hathaway didn’t disclose any new investments. But that changed in the first quarter of 2022, with Buffett buying $51bn of equities such as Chevron [CVX], Occidental Petroleum [OXY], HP [HPQ] and Activision Blizzard [ATVI] — a record quarterly purchase for the firm, according to Barron’s. With the S&P 500 down 5% in the first three months of the year, Buffett sold less than $10bn.
MANTA over FAANG
Veteran fund manager Mark Hawtin told CNBC that the FAANG group of stocks — Meta [FB], Amazon [AMZN], Apple [AAPL], Netflix [NFLX] and Alphabet [GOOGL] — have reached a “size and level of maturity” that will see these companies unable to deliver returns in the same ways as they used to. Hawtin believes the next wave of opportunity is in “Digital 4.0” and names MANTA, which consists of Microsoft [MSFT], Amazon, Nvidia [NVDA], Tesla [TSLA] and Apple, as the new tech heavyweight group to watch.