Renaissance Technologies’ Stock Picks for 2013 Include Qualcomm

Page 1 of 2

We have found that 13F filings from hedge funds and other notable investors- even though they are filed six to seven weeks after the end of the quarter for which the filing discloses many long equity position- can still be useful for the financial community. Pooling these filings into a database has enabled us to develop investing strategies including following the most popular small cap stocks among hedge funds; this strategy has, on average, outperformed the S&P 500 by 18 percentage points per year (learn more about hedge fund investing strategies). Of course, investors can also use 13Fs as an opportunity to see what top managers think about the markets.

Renaissance Technologies has been a very successful hedge fund over the course of its history, and founder Jim Simons is now a multi-billionaire. We have gone through the fund’s 13F for the fourth quarter of 2012, compared it to previous filings, and picked out what we thought were some interesting themes in Renaissance’s trading activity over the course of Q4. Read on for our discussion of these stocks the fund was buying or selling:

RENAISSANCE TECHNOLOGIESQualcomm. The fund increased its holdings of Qualcomm, Inc. (NASDAQ:QCOM) to a total of 5.3 million shares. The communications equipment and services company has a market capitalization of over $110 billion, though its stock price has lagged the market over the last year. Last quarter revenue and earnings were up strongly from their levels in the fourth quarter of 2011, and while we don’t expect growth to continue at quite that rate it is good to see that the company is healthy. Qualcomm trades at 17 times trailing earnings; smaller peer Broadcom Corporation (NASDAQ:BRCM) has been struggling recently and while the forward P/Es are the same this is due to considerably higher expected earnings growth at Broadcom. Billionaire Ken Fisher’s Fisher Asset Management has been another major shareholder of Qualcomm (find Fisher’s favorite stocks).

Selling Microsoft. Renaissance cut its stake in Microsoft Corporation (NASDAQ:MSFT) roughly in half between October and December, from about 16 million shares to just above 8 million at the beginning of 2013. As a result the technology company dropped out of its ten largest holdings by market value after having been the largest position in the portfolio three months earlier. Microsoft had been one of the most popular stocks among hedge funds in the third quarter of 2012 (see the top ten list) but concerns about Windows 8 remain high and the Surface tablet- despite a heavy marketing campaign- appears to be short of early expectations. Microsoft’s stock is down 10% in the last year. The forward P/E is 9, but earnings in the fiscal year ending June 2014 are likely to still be on a bump from Windows and Office sales as new versions are released. We think that Renaissance simply became less confident in the company.

Find out what cigarette company Renaissance liked in the fourth quarter:

Page 1 of 2
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

Reign of Terror: The 10 Most Ruthless Politicians in History

On the Move: The 10 Fastest Growing Businesses in 2015

Fast Money: The 10 Highest Paying Fast Food Restaurants

Mixing It Up: The 14 Best Music Mashups of 2014

Rito Pls Buff: The 10 Least Played Champions in LoL Season 4

10 Covers of Popular Songs that are Better than the Originals

Must See TV: The 9 Most Anticipated Shows of 2015

The 15 Biggest Box Office Bombs of All Time

10 Things The World Can’t Stand About Americans

Picture Perfect: The 6 Smartphones with the Best Cameras

The 10 Best Countries To Work In the World

A Profitable Day At The Track: 5 Tips For Betting On Horses

Tearing You Apart: 6 Bad Habits That Ruin Relationships

Learning on the Job: The 6 Biggest Mistakes Parents Make

Shopaholics Rejoice: The 12 Biggest Malls in the World

Fright Night: 10 Horror Movies Based on True Stories

Mach Mania: The 10 Fastest Jets in the World

Military Heavyweights: The 10 Countries with the Most Tanks

All In: The 7 Richest Poker Players in the World

Abracadabra: The 10 Best Magicians in the World

The 10 Richest Asian Countries in the World in 2014

Eyes in the Sky: 10 Things You Need to Know About Drones

Rising Stars: The 6 Best Silicon Valley Startups

Military Muscle: The 5 Most Advanced Armies in South America

All that Glitters: The 7 Most Luxurious Jewelry Brands in the World

5 Things You Didn’t Know About ISIS but Should

Empowering Your Money: The 5 Best Energy Stocks to Invest In

The 11 Best Android Apps You Can’t Get on iOS

The 10 Most Important International Conflicts in 2014

Mood Enhancers: The 20 Most Uplifting Songs of all Time

Lover Beware: The 8 Countries that Cheat the Most

Breath of Fresh Air: The 25 Countries with the Best Air Quality on the Planet

Singles Beware: The 8 Worst Mistakes Made on First Dates

Healthy and Happy: The 10 Countries with Lowest Healthcare Costs

The 6 Best Company Team Building Activities to Build Workplace Camaraderie

Ships Ahoy: The 10 Busiest Shipping Ports in the World

10 Productivity Tips to Save You Time and Help You Do More With Less

Grab a Bite: The Most Popular Fast Food Restaurants in America

Friday Night Thirst: The 10 Most Popular Cocktails in the World

The 6 Greatest Unsolved Mysteries We May Never Figure Out

7 Useless Products You Never Should’ve Bought

The 5 Reasons Why You’re Single and Miserable

The 7 Most Addictive Foods in the World We Can’t Stop Eating (Even Though We Should)

5 Amazing Places You Can Swim with Dolphins

The Top 7 Most Livable Countries In The World

The 10 Most Expensive Baseball Cards Ever Pulled From A Pack

The 5 Easiest Second Languages to Learn for English Speakers

Silver Spoon: The 6 Richest Families in the World

The 20 Countries with the Largest Prison Populations in the World

The Top 10 Richest Actors in the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!