We track quarterly 13F filings from hundreds of hedge funds and other notable investors, including Renaissance Technologies, the highly successful hedge fund which has made founder Jim Simons a multi-billionaire. We’ve found that 13Fs can be useful in developing investment strategies; for example, the most popular small cap stocks among hedge funds outperform the S&P 500 by an average of 18 percentage points per year (learn more about our small cap strategy). Even though the most recent 13Fs are often old by now (the most recent ones generally disclose many of a fund’s long equity positions as of the end of March), we can also look for stocks which a fund has owned for a longer period of time and treat these as free initial investment ideas. Read on for our thoughts on five of Renaissance’s largest positions from its most recent filing which it also owned at least $100 million of at the end of March 2011 (or see the full list of Renaissance’s picks over time).
The fund owned around 11 million shares of Eli Lilly & Co. (NYSE:LLY) according to the filing. The $55 billion market cap drug manufacturer looks interesting from the perspective of an income or defensive investor, with a beta of 0.4 and a dividend yield of 3.8%. We would note that earnings per share are expected to be lower in 2014 than they have been on a trailing basis, implying a forward P/E of 19; that seems high for a stable company. Eli Lilly & Co. (NYSE:LLY) was one of the five largest single-stock holdings of billionaire Stanley Druckenmiller in his most recent 13F (find Druckenmiller’s favorite stocks).
Renaissance reported a position of more than 14 million shares in Bristol Myers Squibb Co. (NYSE:BMY) as of the beginning of April. Statistically, Bristol Myers Squibb Co. (NYSE:BMY) is even less closely tied to the overall economy than Eli Lilly with a beta of only 0.1. Business has been down according to recent reports, and even though analysts expect the company to rebound next year the valuation still includes expectations of earnings growth beyond that point with a forward P/E of 21. Citadel Investment Group, managed by billionaire Ken Griffin, increased its holdings of Bristol-Myers Squibb to 1.4 million shares during Q1 (check out more stocks Griffin was buying).