Wal-Mart Stores, Inc. (WMT), Altria Group, Inc. (MO) Among Jim Simons’ Top Defensive Picks

Page 1 of 2

RENAISSANCE TECHNOLOGIESBillionaire Jim Simons and his firm Renaissance Technologies filed its third quarter 13F, where notable investors and hedge funds are required to disclose their quarterly public equity holdings to the SEC. After analyzing Simons’ holdings we have found five defensive stocks that RenTech was heavily invested in. All of these defensive stocks pay investors a dividend and have low volatility, each with a beta less than 0.5. Simons founded Renaissance Technologies in 1982 and now has over $15 billion of AUM. Simons retired in early 2010, but still has some capital invested in the fund (check out Jim Simons’ top picks).

Two of Simons’ top defensive picks are in the tobacco industry: Lorillard Inc. (NYSE:LO) and Altria Group, Inc. (NYSE:MO). On a profit margin basis, the two tobacco companies are in line across the board. They also trade with very similar dividend yields, P/E ratios, betas and five year estimated EPS growth rates. Lorillard is Simon’s 15th largest 13F holding and is expected to see sales growth of only 3% in 2012, compared to 10% in 2011. Discount brands have helped carry Lorillard over the interim, with volume up 15% over the past year. Lorillard’s top brand, Newport, is also expected to continue capturing market share.

With a P/E of 14x, Lorillard is a value play when compared to Reynolds America (16x) and British American (20x). The tobacco company’s beta is only 0.4 and it pays a very nice dividend that yields 5.2% – with a payout of 70% – making it a solid defensive play. Ken Griffin, founder of Citadel Investment Group, is also a big fan of the tobacco company, having upped his stake 1500% last quarter (see Ken Griffin’s newest picks).

Altria is RenTech’s other tobacco play that has a 0.4 beta and a 5.3% dividend yield. Revenue growth for Altria is expected to be up 5% this year, higher than Lorillard. Helping hedge the decline in volume due to greater health concerns on an aggregate scale, is Altria’s initiative to cut costs by $400 million through 2013. The company is the largest cigarette manufacturer in the U.S., but it is also making key strides into the high-margin smokeless tobacco segment. RenTech increased its stake in Altria by 50% last quarter, and Ken Fisher was also upping his Altria stake over this time(check out Ken Fisher’s top picks here).

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

The 9 Most Dangerous Countries for Tourists to Visit

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

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!