Jim Simons founded Renaissance Technologies LLC in 1982 and has since become a multi-billionaire due to the fund’s success over time even as it has increased its assets under management. Due to Renaissance Technologies LLC’s strong historical performance, it is a closely watched hedge fund and one of the funds which we track in our database of 13F filings. We use this database to develop investing strategies (we have found, for example, that the most popular small cap stocks among hedge funds outperform the S&P 500 by 18 percentage points per year on average) and also like to review significant changes in top hedge funds’ portfolios over the previous quarter in search of initial investment ideas. Read on for three things we noticed in Renaissance Technologies LLC’s most recent 13F compared to what it had owned at the beginning of 2013 or see more of the fund’s filings over time.
IBM. Renaissance Technologies LLC increased its stake in International Business Machines Corp. (NYSE:IBM) to 2.3 million shares, up from about 410,000 shares at the end of December. The company experienced a 5% decline in revenue last quarter compared to the first quarter of 2012, and even though it was able to cut costs to the point where net margins actually increased International Business Machines Corp. (NYSE:IBM)’s earnings were still down slightly. Currently the stock trades at 14 times trailing earnings, a level which suggests that the market is looking for at least small increases in earnings per share going forward (and therefore a reversal of these recent trends). Warren Buffett’s Berkshire Hathaway has been a major shareholder of International Business Machines Corp. (NYSE:IBM), and owned over 65 million shares at the beginning of the year (find Buffett’s favorite stocks). International Business Machines Corp. (NYSE:IBM)’s stock price has been up only 5% in the last year, underperforming broader market indices.
Selling Qualcomm. The fund was a seller of QUALCOMM, Inc. (NASDAQ:QCOM) between January and March, reducing its holdings from 5.3 million shares to 1.2 million over the course of this period. QUALCOMM, Inc. (NASDAQ:QCOM)’s revenue and earnings from continuing operations rose strongly in its most recent quarter compared to the same period in the previous year, and Wall Street analysts expect that trend to continue. Going by their expected earnings figures, QUALCOMM, Inc. (NASDAQ:QCOM) is valued at 14 times forward earnings estimates and at a five-year PEG ratio of 0.8. As such while QUALCOMM, Inc. (NASDAQ:QCOM) is not a pure value stock it’s possible that it offers “growth at a reasonable price.” Viking Global, managed by billionaire Andreas Halvorsen, has been a large shareholder in QUALCOMM, Inc. (NASDAQ:QCOM) (check out Halvorsen’s stock picks).