5 Most Successful Quant Hedge Funds And Their Top Picks

D E Shaw

– Top Pick (as of June 30): Amazon.com, Inc. (NASDAQ:AMZN)

– Shares Owned (as of June 30): 1.19 Million

– Value of the Holding (as of June 30): $850 Million

D.E. Shaw, founded by billionaire David E. Shaw, more than doubled its stake in e-commerce giant Amazon.com, Inc. (NASDAQ:AMZN) during the second quarter. Since the third quarter of 2007,when D.E. Shaw initiated its stake in the company, Amazon.com, Inc. (NASDAQ:AMZN)’s stock has appreciated by over 1,000% and is currently trading up by 20.9% in 2016. Despite such a massive rally in the stock, almost all prominent analysts who track it continue to remain bullish on it. Earlier this month, Microsoft cut the price of its Azure virtual machines drastically, by 11-50%, and some investors see this as the start of a price war that could cause significant damage to Amazon’s bottom-line, as 56% of the company’s operating income now comes from its cloud platform Amazon Web Services. Nevertheless, analysts have dismissed those concerns, citing the economies of scale that AWS currently enjoys, which they believe shields it against such moves. Last week, analysts at Morgan Stanley reiterated their ‘Overweight’ rating on Amazon’s stock and also upped their price target on it to $950 from $800, which represents potential upside of 12.7%.

Two Sigma Advisors

– Top Pick (as of June 30): E I Du Pont De Nemours And Co (NYSE:DD)

– Shares Owned (as of June 30): 2.93 Million

– Value of the Holding (as of June 30): $190 Million

Moving on, E I Du Pont De Nemours And Co (NYSE:DD) made its debut in the portfolio of John Overdeck and David Siegel’s Two Sigma Advisors during the second quarter of 2015, the same quarter in which the company won its proxy fight against activist investor Nelson Peltz’s Trian Partners. Although E I Du Pont De Nemours And Co (NYSE:DD)’s stock has been extremely volatile since then, it has appreciated by 4.23% so far this year, as the company awaits regulatory approval for its merger with Dow Chemical Co (NYSE:DOW). On October 3, the same day that European regulators resumed their investigation into the $130 billion merger and announced that they will rule on it next February 6, analysts at Citigroup released a note in which they called the combined company “the stock to own in 2017”, should the merger be completed. Apart from making that call, Citi’s analysts also upgraded both stocks to ‘Buy’ from ‘Neutral’, citing the “massive” cost-cutting opportunity after the merger is completed and the potential for upside in terms of the $3 billion synergy target stated by the two companies.