Jim Simons Stock Portfolio: 10 Top Stock Picks – blogwspace.com

Jim Simons Stock Portfolio: 10 Top Stock Picks

In this article, we discuss Jim Simons and his top 10 stock picks. If you want to read about some more stocks in the Simons portfolio, go directly to Jim Simons Stock Portfolio: 5 Top Stock Picks.

In June this year, Stony Brook University, a public college in New York, saw the endowment fund it had swell from $370 million to more than $1 billion overnight, thanks in large part to a $500 million donation from Jim Simons, the chief of Renaissance Technologies, and a New York State matching program. The donation from Simons was the largest unrestricted donation to an institution of higher education in US history, per news publication Forbes. Simons, who oversees one of the largest hedge funds in the world, called it a gift for a wonderful institution. 

Simons can afford to donate this much money to his alma mater because of his incredible success in the finance world. Before becoming a hedge fund titan worth more than $30 billion, Simons used to study and teach at Stony Brook. This was in the early 1950s and 1960s, before he left the school to start his hedge fund. In the years since, his fund has grown exponentially, becoming the envy of everyone on Wall Street. At the end of September, the value of the equity portfolio at Renaissance Technologies was over $58 billion. 

There aren’t any hedge fund managers on Wall Street with the mathematics prowess of Simons. To put this into additional context, Simons, in addition to being one of the richest men in the world, helped the development of string theory in physics through his work in pattern recognition. He has several degrees in mathematics, including a doctorate from the University of California. Simons even worked at the National Security Agency in the 1960s to break codes owning to his mathematical genius. He was also employed at famous colleges like Massachusetts Institute of Technology and Harvard University for teaching his favorite subject.

Simons employs mathematics in his trades as well. Renaissance Technologies uses computerized models to isolate non-random movements in equities, bonds, currencies, and other securities. Simons then makes calculated bets on the upward or downward trajectory of these cases. Gregory Zuckerman, a veteran Wall Street reporter, claims in his book The Man Who Solved the Market that Medallion, the flagship fund for the Simon hedge fund, closed to outside investors, has earned more than $100 billion for investors since it was founded. Averaging this number to 2018, when the book was released, this translates to average gross annual return of more than 66% and average net annual return of close to 40%.

Simons employs quant investing strategies at the stock market. Latest filings reveal that between June and September this year, the value of the equity portfolio of his fund decreased by about $10 billion. During this period, Simons made new purchases in 465 stocks, additional purchases in 1,329, sold out of 713, and reduced holdings in 1,801 stocks. Some of the top stocks in the Renaissance Technologies portfolio include Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG). 

Our Methodology

These were picked from the investment portfolio of Renaissance Technologies at the end of the third quarter of 2023. In order to provide readers with a more comprehensive overview of the companies, the analyst ratings for each firm are mentioned alongside other details. A database of around 900 elite hedge funds tracked by Insider Monkey in the second quarter of 2023 was used to quantify the popularity of each stock in the hedge fund universe. 

Jim Simons Stock Portfolio: 10 Top Stock Picks

Jim Simons Stock Portfolio: 10 Top Stock Picks

Jim Simons of Renaissance Technologies

Jim Simons Stock Portfolio: Top Stock Picks

10. United Therapeutics Corporation (NASDAQ:UTHR)

Number of Hedge Fund Holders: 45  

United Therapeutics Corporation (NASDAQ:UTHR) is a biopharma company that engages in the development and commercialization of products to address the unmet medical needs of patients with chronic and life-threatening diseases. The hedge fund chaired by Jim Simons owned close to 2.2 million shares of United Therapeutics Corporation (NASDAQ:UTHR) at the end of September 2023 worth $508 million, representing 0.86% of the portfolio.

On November 2, Ladenburg analyst Matthew Kaplan maintained a Buy rating on United Therapeutics Corporation (NASDAQ:UTHR) stock and lowered the price target to $264 from $268, noting the growth of treprostinil-based products could be largely be driven by the growing market potential for Tyvaso. 

Among the hedge funds being tracked by Insider Monkey, New York-based investment firm VenBio Select Advisors is a leading shareholder in United Therapeutics Corporation (NASDAQ:UTHR) with 2.8 million shares worth more than $644 million.

Just like Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG), United Therapeutics Corporation (NASDAQ:UTHR) is one of the stocks that elite investors are buying. 

9. Netflix, Inc. (NASDAQ:NFLX)

Number of Hedge Fund Holders: 114

Netflix, Inc. (NASDAQ:NFLX) provides entertainment services and is headquartered in California. Regulatory filings show that Renaissance Technologies owned 1.3 million shares in Netflix, Inc. (NASDAQ:NFLX) at the end of September 2023 worth $522 million, representing 0.89% of the portfolio.

On November 10, investment advisory JPMorgan maintained an Overweight rating on Netflix, Inc. (NASDAQ:NFLX) stock and raised the price target to $510 from $480, noting there were bullish views on the ability of the firm to accelerate revenue growth in 2024. 

Among the hedge funds being tracked by Insider Monkey, Chicago-based firm Citadel Investment Group is a leading shareholder in Netflix, Inc. (NASDAQ:NFLX) with 4.6 million shares worth more than $1.7 billion. 

In its Q3 2023 investor letter, RiverPark Advisors, an asset management firm, highlighted a few stocks and Netflix, Inc. (NASDAQ:NFLX) was one of them. Here is what the fund said:

“Netflix, Inc. (NASDAQ:NFLX): NFLX was a top detractor in the quarter on weaker than expected reported and guided revenue, despite 2Q subscriber growth that was well above expectations (+5.9 million versus estimates of +2.1 million). The company’s subscriber growth re-accelerated following the company’s crack down on password sharing, and the rollout of the advertising supported subscriber offering known as the Ad Tier, but the average revenue per user came in below expectations and is expected to remain muted in the near term. NFLX reiterated expectations for full year 2023 operating margins of 18-20%, and guided free cash flow to at least $5 billion, up from prior guidance of $3.5 billion. Despite the positive momentum in the company’s business, market participants took comments from management at a recent conference to mean revenue growth may be slower in the coming years than expected. This was not our interpretation of these comments.

In fact, the recent re-acceleration of subscriber growth, plus price increases on premium memberships and a stabilization of content investments, should position the company for low double digit annual revenue growth over the next few years while driving improved operating margin to more than 25% (revenue grew 3% for 2Q23 and operating margin was 22.3%, up from 13% in 2019). We also believe that the stabilization of content spend should allow the company to continue to scale its FCF.”

8. NVIDIA Corporation (NASDAQ:NVDA

Number of Hedge Fund Holders: 175     

NVIDIA Corporation (NASDAQ:NVDA) provides graphics, computing and networking solutions. Latest data shows that  Renaissance Technologies owned 1.2 million shares of NVIDIA Corporation (NASDAQ:NVDA) at the end of the third quarter of 2023 worth $526 million, representing 0.89% of the portfolio. 

On October 17, investment advisory Morgan Stanley maintained an Overweight rating on NVIDIA Corporation (NASDAQ:NVDA) stock and lowered the price target to $600 from $630, noting the firm was a top pick in the semi space for the next few months. 

Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in NVIDIA Corporation (NASDAQ:NVDA) with 20 million shares worth more than $8.8 billion.  

In its Q3 2023 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and NVIDIA Corporation (NASDAQ:NVDA) was one of them. Here is what the fund said:

“At the portfolio level, the positive fundamental trends we noticed in the second quarter continued into the third quarter as well – many of our companies are reporting stability or slight improvement in business trends. Weighted average 2023 revenue growth expectations for the portfolio were up 3.8% during the third quarter or up 0.8% if we exclude NVIDIA. We wrote at length about NVIDIA earlier this year, but it is worth mentioning that the company has continued to exceed its own projections and the Street’s most optimistic expectations. After raising its revenue and EPS guidance for 2023 by 40% and 69%, respectively, following its last quarter, NVIDIA increased it further by 26% and 35%, respectively, after reporting the most recent one. Consensus expectations now call for revenues to grow 94% this year, while earnings per share are expected to increase by 192%. You may have seen these kinds of growth rates before, but we doubt you saw them from a company generating $50 billion in revenues. The skeptics who continue to question and doubt the accelerating demand for Generative artificial intelligence forgot to tell NVIDIA about it. But we digress…back to the portfolio…profit expectations have risen even faster than revenues and were up 11% during the third quarter (or up 7.8% ex-NVIDIA) with margin expectations up 149bps (107bps ex-NVIDIA). So, broadly speaking, our companies are seeing improvement in overall business trends, which flow through to their bottom lines, driving higher margins. We are also starting to see the benefits of leaner cost structures and more disciplined capital allocation compared to two or three years ago when capital was both cheaper and more readily available.”

7. Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX)

Number of Hedge Fund Holders: 54

Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) is a biotech firm that develops therapies for the treatment of cystic fibrosis. Latest filings show that  Renaissance Technologies owned 1.6 million shares of Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) at the end of the third quarter of 2023 worth $578 million, representing 0.98% of the portfolio. 

On November 7, investment advisory TD Cowen maintained an Outperform rating on Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) stock and raised the price target to $390 from $370, noting the firm was a core biotech holding following in line earnings. 

At the end of the second quarter of 2023, 54 hedge funds in the database of Insider Monkey held stakes worth $1.9 billion in Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX), compared to 44 in the previous quarter worth $1.7 billion.

In its Q2 2023 investor letter, Artisan Partners, an asset management firm, highlighted a few stocks and Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) was one of them. Here is what the fund said:

“Notable adds in the quarter included Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) and Intuit. Vertex is one of the only pharmaceutical companies in the world with an effective drug for cystic fibrosis, but the market has deemed it a slow-growth company due to existing market penetration. However, the drug is enabling patients to live longer, and the drug’s patient base is growing. Also, the company is developing a more potent formulation that we believe could increase efficacy while giving Vertex an opportunity to reprice and improve margins. Finally, its cystic fibrosis franchise is very cash generative, and the company has been using the capital to invest in a pipeline that we believe includes some interesting longer term opportunities. We added to the position after a couple of positive developments this quarter. First, its competitive position strengthened when a competitor, AbbVie, announced it will discontinue all work in cystic fibrosis. Second, there have been positive developments from the company’s pipeline, including encouraging early-stage results for a Type 1 diabetes stem cell therapy.”

6. Airbnb, Inc. (NASDAQ:ABNB)

Number of Hedge Fund Holders: 47 

Airbnb, Inc. (NASDAQ:ABNB) operates a platform that enables hosts to offer stays and experiences to guests worldwide. Regulatory filings show that  Renaissance Technologies owned 4.5 million shares of Airbnb, Inc. (NASDAQ:ABNB) at the end of the third quarter of 2023 worth $617 million, representing 1.05% of the portfolio. 

On October 31, Mizuho analyst James Lee maintained a Neutral rating on Airbnb, Inc. (NASDAQ:ABNB) stock and lowered the price target to $130 from $150.

Among the hedge funds being tracked by Insider Monkey, Florida-based Citadel Investment Group is a leading shareholder in Airbnb, Inc. (NASDAQ:ABNB) with 2.4 million shares worth more than $314 million. 

In addition Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG), Airbnb, Inc. (NASDAQ:ABNB) is one of the stocks that elite investors are buying. 

In its Q3 2023 investor letter, Artisan Partners, an asset management firm, highlighted a few stocks and Airbnb, Inc. (NASDAQ:ABNB) was one of them. Here is what the fund said:

“Top contributors to performance for the quarter included global online travel marketplace Airbnb, Inc. (NASDAQ:ABNB). Airbnb again defied fears about weaker travel demand as it experienced continued recovery in cross-border and urban nights and resilient pricing trends, though travel volumes remain mixed.”

 

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Disclosure. None. Jim Simons Stock Portfolio: 10 Top Stock Picks is originally published on Insider Monkey.

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