In this piece, we will take a look at the ten best stocks under $20 to invest in according to Jim Simons’ Renaissance Technologies.
Renaissance Technologies is a hedge fund based out of New York, United States. It was founded by the mathematician Jim Simons and is known for utilizing quantitative trading strategies.
Dr. Simons is one of the oldest hedge fund founders in the world, and he is among the few of his peers with a distinct mathematical background. He received his undergraduate degree from the illustrious Massachusetts Institute of Technology (MIT) in 1958 and went on to complete a Ph.D. from the equally illustrious University of California, Berkeley in 1961 at the young age of 23. After completing his doctorate, the now billionaire hedge fund founder would go on to work for the National Security Agency (NSA).
At the NSA he was responsible for breaking ciphers, which are coded communications used by governments and armies to communicate with each other in a secure manner. He would also teach at both MIT and Harvard. Roughly two decades after completing the Ph.D. Dr. Simons would set up Renaissance Technologies in 1983 and the rest is history.
The hedge fund is known for using patterns and algorithms – both of which are Dr. Simons’ specialty – to identify stocks, predict their prices, and autonomously conduct trades. This has resulted in spectacular success for the hedge fund. Renaissance is divided into three funds which are the Medallion fund, Renaissance Institutional Equities Fund (RIEF), and Renaissance Institutional Diversified Alpha (RIDA). Out of these, only the latter two are accessible to outside investors, while the former is renowned for having delivered some of the strongest returns in hedge fund history.
To illustrate this, the Medallion fund had an average gross return of a whopping 66% between 1988 and 2018 along with an average net return of 39% during the same time period. The hedge fund uses statistical techniques such as probabilities to predict future stock prices. It is also one of the first in the world to have recognized the merits of big data and large scale data analysis. Renaissance has been extracting data signals from vast volumes of data for decades before the current big data wave became the center of corporate and public perception.
These strategies have placed Renaissance among the largest hedge funds in the world, as evidenced by its portfolio that was worth $80 billion as the fourth quarter of last year came to an end. Some of the most renowned holdings in this portfolio are AT&T Inc. (NYSE:T), Microsoft Corporation (NASDAQ:MSFT), and Tesla, Inc. (NASDAQ:TSLA).
Jim Simons of Renaissance Technologies
Our Methodology
To pick out Dr. Simons’ fund’s top stocks that are trading below $20, we sifted through its massive portfolio with a fine toothed comb. This tedious process enabled us to select the top ten firms, following which they were analyzed through their earnings, investor letters, large shareholders, analyst sentiment, and hedge fund interest gathered via Insider Monkey’s very own survey of 924 funds for Q4 2021.
10. Vector Group Ltd. (NYSE:VGR)
Renaissance Technologies’ Stake Value: $97 million
Percentage of Renaissance Technologies’ 13F Portfolio: 0.12%
Number of Hedge Fund Holders: 23
Share Price as of December 12: $12.61
Vector Group Ltd. (NYSE:VGR) is a tobacco and real estate provider based in the United States. The company is known for several cigarette brands such as EAGLE 20, Grand Prix, and Eve. Additionally, it also invests in real estate.
Dr. Simons’s hedge fund owned 8.4 million Vector Group Ltd. shares at the end of the fourth quarter of last year. This enabled it to hold a $97 million stake that represented 0.12% of its investment portfolio. 23 of the 924 hedge funds part of Insider Monkey’s survey for the same time period had also bought the company’s shares.
Vector Group Ltd.’s fourth quarter results revealed that it had earned $313 million in revenue and $0.26 in non-GAAP EPS, missing analyst estimates for both metrics. Barclays upgraded its share price rating to Overweight from Equal Weight and increased the price target to $16 from $12 in March 2022, stating that real estate strength and a competitively priced cigarette brand are positives for the firm.
After Rennaisance Technologies, Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital is Vector Group Ltd.’s largest investor. It owns one million shares worth $11 million.
Microsoft Corporation, AT&T Inc., and Tesla, Inc. are joined by Vector Group Ltd. as one of Renaissance Technologies’ favorite stock picks.
9. AMC Entertainment Holdings, Inc. (NYSE:AMC)
Renaissance Technologies’ Stake Value: $127 million
Percentage of Renaissance Technologies’ 13F Portfolio: 0.15%
Number of Hedge Fund Holders: 24
Share Price as of December 12: $17.42
AMC Entertainment Holdings, Inc. (NYSE:AMC) owns and operates a chain of theaters across the United States and Europe. It came to the forefront of the financial news early last year when retail investors united on social media platforms and bought the company’s shares in bulk, as they managed to drive the share price up and inflict heavy losses on institutional investors that had bet against its shares.
AMC Entertainment Holdings, Inc. raked in $1 billion in revenue and -$0.11 in non-GAAP EPS for its fiscal Q4, beating analyst estimates for both. The company announced in April 2022 that it had acquired seven theaters in Connecticut, New York, and Maryland in order to expand its presence in the states.
Renaissance Technologies held a $127 million stake in AMC Entertainment Holdings, Inc. during Q4 2021. This came through owning 4.6 million shares and constituted 0.15% of its investment portfolio. Insider Monkey’s survey of 924 hedge funds during the same time period revealed that 24 had owned the company’s shares.
AMC Entertainment Holdings, Inc.’s largest investor is D. E. Shaw’s D E Shaw who owns 4.9 million shares worth $135 million.
8. B2Gold Corp. (NYSE:BTG)
Renaissance Technologies’ Stake Value: $130 million
Percentage of Renaissance Technologies’ 13F Portfolio: 0.16%
Number of Hedge Fund Holders: 20
Share Price as of December 12: $4.76
B2Gold Corp. (NYSE:BTG) is a mining company that is headquartered in Vancouver, Canada. The firm operates mines in Mali, the Philippines, and Namibia. Additionally, it also has stakes in other companies alongside having minority interests in mines in Mali, Uzbekistan, and Finland. It focuses on extracting gold.
As its fiscal Q4 came to an end, B2Gold Corp. had reported 526 million in revenue and $0.11 in GAAP EPS, for a mixed bag of results that saw it beat analyst EPS estimates but miss them for revenue. At the same time, it provided an estimate of its gold product for 2022, with the upper range of this being more than a million ounces.
By the end of the three months ending in December 2021, Renaissance Technologies had held 33 million B2Gold Corp. shares. These were worth $130 million and made it the firm’s largest investor according to our research. Additionally, Insider Monkey’s Q4 2021 hedge fund survey outlined that 20 had owned stakes in the gold miner.
B2Gold Corp.’s second largest investor is Jean-Marie Eveillard’s First Eagle Investment Management which owns 21 million shares worth $85 million.
7. Under Armour, Inc. (NYSE:UA)
Renaissance Technologies’ Stake Value: $138 million
Percentage of Renaissance Technologies’ 13F Portfolio: 0.17%
Number of Hedge Fund Holders: 53
Share Price as of December 12: $14.67
Under Armour, Inc. (NYSE:UA) is an American apparel firm headquartered in Baltimore, Maryland. The company provides performance apparel, footwear, and accessories for men, women, and young people It has a diverse distribution chain that consists of its own single brand stores alongside wholesale channels such as retailers and department stores.
Dr. Simons’ investment firm owned 6.5 million Under Armour, Inc. shares during the fourth quarter of last year. These were worth $138 million and they represented 0.17% of the firm’s investment portfolio. During the same time period, out of the 924 hedge funds polled by Insider Monkey, 53 had owned stakes in the firm.
For its fiscal fourth quarter, Under Armour, Inc. posted $1.5 billion in revenue and $0.14 in non-GAAP EPS, pleasing Wall Street by beating analyst estimates for both. Barclays lowered its price target to $22 from $24 in April 2022 as it outlined that the risks of inflation on retailers’ demand and prices do not bode well for the sector as a whole.
Phill Gross and Robert Atchinson’s Adage Capital Management is Under Armour, Inc.’s largest investor. It owns 19.7 million shares for a stake worth $355 million.
6. Nokia Oyj (NYSE:NOK)
Renaissance Technologies’ Stake Value: $144 million
Percentage of Renaissance Technologies’ 13F Portfolio: 0.17%
Number of Hedge Fund Holders: 26
Share Price as of December 12: $5.18
Nokia Oyj (NYSE:NOK) was one of the most renowned cellphone companies in the world, after having dominated the market in the pre smartphone era. However, it has now shifted its focus to the mobile networking, infrastructure, and cloud computing sector by selling equipment such as base stations to cellular network providers.
Nokia Oyj raked in €70 million in revenue and €0.13 in non-GAAP EPS for its fiscal Q4, witnessing weak demand in the form of missed revenue guidance but good cost control via an EPS beat. Jefferies set a €6 price target for the company in March 2022, as it outlined that a strong rollout of 5G technologies in 2022 will bode well for the company.
For its investments during the fourth quarter of 2021, Renaissance Technologies had held a $144 million stake in Nokia Oyj. This came in the form of 23 million shares and it represented 0.17% of the firm’s portfolio. Insider Monkey’s analysis of 924 hedge fund holdings for Q4 2021 revealed that 26 had held a stake in the company.
Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital is Nokia Oyj ‘s largest investor through a $232 million stake in the form of 37 million shares.
Alongside AT&T Inc., Microsoft Corporation, and Tesla, Inc., Nokia Oyj is a top Dr. Simons pick.
5. Kinross Gold Corporation (NYSE:KGC)
Renaissance Technologies’ Stake Value: $145 million
Percentage of Renaissance Technologies’ 13F Portfolio: 0.18%
Number of Hedge Fund Holders: 31
Share Price as of December 12: $6.13
Kinross Gold Corporation (NYSE:KGC), as the name suggests, is a gold mining company headquartered in Toronto, Canada. The firm has gold mining properties in which it has invested, developed, and operates in the United States, Russia, Brazil, Chile, and other countries.
Renaissance Technologies owned 24 million Kinross Gold Corporation shares during Q4 2021. These were worth $145 million and represented 0.18% of its investment portfolio. During the same time period, 31 of the 924 hedge fund holdings analyzed by Insider Monkey contained the company’s stock.
Kinross Gold Corporation reported $879 million in revenue and $0.08 in non-GAAP EPS for its fourth fiscal quarter, beating analyst EPS estimates but missing them for revenue. Jefferies raised its price target to $6 from $5.5 in March 2022, stating that the sector as a whole is poised for strong growth.
Kinross Gold Corporation’s largest investor after Renaissance is Eric Sprott’s Sprott Asset Management which owns 8.2 million shares worth $47 million.
4. Mobile TeleSystems Public Joint Stock Company (NYSE:MBT)
Renaissance Technologies’ Stake Value: $168 million
Percentage of Renaissance Technologies’ 13F Portfolio: 0.2%
Number of Hedge Fund Holders: 10
Share Price as of December 12: $5.5
Mobile TeleSystems Public Joint Stock Company (NYSE:MBT) is a Russian telecommunications services provider that is headquartered in Moscow. It offers cellular services, internet access, TV coverage, broadband, and banking services alongside others.
Mobile TeleSystems Public Joint Stock Company raked in RUB534 billion in revenue and RUB63.5 billion in net profit for its fiscal year 2021 which marked 8% revenue growth. During the earnings call, its CEO highlighted the strong execution of the company’s financial technology platform.
By the end of the fourth quarter of last year, Dr. Simons’ hedge fund had a $168 million stake in Mobile TeleSystems Public Joint Stock Company. This came in the form of 21 million shares and it represented 0.2% of the firm’s investment portfolio. Insider Monkey scanned 924 hedge fund holdings for Q4 2021 and learned that 10 had invested in the firm.
Israel Englander’s Millennium Management is a large Mobile TeleSystems Public Joint Stock Company through a $22 million stake that comes via 2.7 million shares.
3. Palantir Technologies Inc. (NYSE:PLTR)
Renaissance Technologies’ Stake Value: $266 million
Percentage of Renaissance Technologies’ 13F Portfolio: 0.33%
Number of Hedge Fund Holders: 33
Share Price as of December 12: $12.46
Palantir Technologies Inc. (NYSE:PLTR) is a software platform provider for the American intelligence community. Its products allow the agencies to identify patterns from a wide variety of intelligence sources such as informant reports, signals intelligence, and datasets.
Renaissance Technologies had a $266 million stake in Palantir Technologies Inc. during Q4 2021, via owning 14.6 million shares. Insider Monkey’s survey of 924 hedge funds during the same time period revealed that 33 had invested in the software company.
For its fiscal Q4, Palantir Technologies Inc. reported $432 million in revenue and $0.02 in non-GAAP EPS, missing analyst EPS estimates but beating them for revenue. Monness Crespi set a $20 price target for the company in April 2022, citing a strong global presence and the need for the company’s products in the wake of the Russian invasion of Ukraine.
Catherine D. Wood’s ARK Investment Management is Palantir Technologies Inc.’s largest investor. It has a $642 million stake that comes through owning 35 million shares.
Tao Value mentioned the company in its fourth quarter 2021 investor letter. Here is what the fund said:
“We have no new position this quarter and have made below changes to our portfolio. We also sold Palantir (PLTR) as I identified it subject to high retail bubble risk (using above method) and are not part of our core “Mindful Compounder” holdings.”
2. Vodafone Group Public Limited Company (NASDAQ:VOD)
Renaissance Technologies’ Stake Value: $388 million
Percentage of Renaissance Technologies’ 13F Portfolio: 0.48%
Number of Hedge Fund Holders: 17
Share Price as of December 12: $17.13
Vodafone Group Public Limited Company (NASDAQ:VOD) is a telecommunications service provider that is headquartered in the United Kingdom. The company provides mobile network coverage, broadband, television coverage, insurance, internet of things (IoT) products, and insurance.
Vodafone Group Public Limited Company reported €22.5 billion in revenue and €0.049 in non-GAAP EPS for its H1 2021, beating analyst revenue estimates. During the quarter, its revenue was driven by growth in Europe and Africa and post pandemic recovery. UBS lowered the company’s share price target to GBp 147 from GBp 157 in April 2022.
Renaissance Technologies had a $388 million stake in Vodafone Group Public Limited Company for its fourth quarter of 2021 holdings. This stake came through the investment firm holding 26 million shares. Insider Monkey’s Q4 2021 hedge fund analysis outlined that 17 out of 924 funds had also held a stake in the company.
Vodafone Group Public Limited Company’s largest investor after Renaissance is Steven Tananbaum’s GoldenTree Asset Management which owns 4.2 million shares worth $63 million.
1. AT&T Inc. (NYSE:T)
Renaissance Technologies’ Stake Value: $460 million
Percentage of Renaissance Technologies’ 13F Portfolio: 0.57%
Number of Hedge Fund Holders: 70
Share Price as of December 12: $19.56
AT&T Inc. is an American telecommunications services provider. It offers wireless voice and data plans, cloud solutions, different kinds of telephony services, and cloud solutions.
Dr. Simons’ hedge fund had owned 18.7 million AT&T Inc. shares during Q4 2021 for a $460 million stake that translated into 0.57% of its investment portfolio. During the same time period, 70 of the 924 hedge funds profiled by Insider Monkey had invested in the firm.
AT&T Inc.’s fiscal fourth quarter results revealed that it had brought in $41 billion in revenue and $0.78 in non-GAAP EPS, for a strong set of results that beat Wall Street estimates. Raymond James lowered its price target to $26 from $32 in April 2022, stating that some uncertainty still remains in regards to the company.
Ken Griffin’s Citadel Investment Group is AT&T Inc.’s largest investor. It owns 43 million shares worth $1 billion.
Weitz Investment Management mentioned the company in its fourth quarter investor letter as it outlined that:
“After several quarters of pandemic-induced outsized growth, new broadband connection growth has slowed for U.S. cable operators. This slower growth has coincided with a renewed push by competitors like Verizon and AT&T Inc. to offer high-speed data (either via wireless connects or by building new fiber-optic networks).”
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This article is originally published at Insider Monkey.
