In this article, we will discuss the 15 Best Micro and Small Cap Stocks to Buy According to Jim Simons’ Renaissance Technologies.
The relief rally following the Iran-war-triggered sell-off has spread to small companies. Unlike in the past year, when large-cap stocks were the driving force in the equity markets, small-cap stocks are also on the move amid heightened focus on valuations.
Small caps are starting to break out after years of lagging behind their megacap peers. The Russell 2000 index is on the cusp of all-time highs after a 13% year to date gain. The index has outperformed the S&P 500, which is up about 8%, affirming renewed focus on small companies as investors diversify portfolios away from large-cap stocks.
However, the gains in recent weeks appear to be curtailed amid growing fears that the US Federal Reserve will not cut interest rates. A surge in inflation in recent weeks, amid a spike in energy prices, has seen bets on interest rate cuts dissipate, with expectations now high for a December hike.
“Tighter monetary policy tends to be more of a drag on small-cap stocks,” said Mandy Xu, head of derivatives market intelligence at Cboe Global Markets.
Early in the year, analysts at Morgan Stanley reiterated that improving fundamentals support small-cap equity outperformance, even as the Fed pares back on interest rate cuts for the year. According to equity strategist Michael Wilson, investors should stick with small caps on the premise that earnings strength remains a dominant driver. The strategists reiterated that small-cap earnings growth remains the strongest since 2022.
For small-cap stocks to keep rising, as has been the case in the first half of the year, the macro backdrop needs to stabilize. Moderation in energy markets and easing inflation would be the catalyst to send the stocks higher
“We have to get back to a more ‘normal’ environment for the small caps to work. If that happens, investors may be able to focus more on the improving fundamentals underneath the small-cap universe. Then you start looking at the fundamentals underneath the small-cap space, and it starts to get pretty exciting,” said Mark Hackett, chief market strategist at Nationwide’s Investment Management Group.
Renaissance Technologies is one quantitative hedge fund that has diversified its portfolio to focus on micro and small-cap stocks likely to benefit from a stable macro environment. Founded in 1982 by mathematician James Simon, the hedge fund leverages advanced mathematical models and machine learning to analyze equity markets for the best high-risk, high-reward opportunities.
Jim Simons’ Medallion Fund, closed to outside investors, has delivered extraordinary returns since inception, including 56.6% during the dot‑com crash and 74.6% in the 2007–2011 financial crisis, with an average annual gain of 31.5%. In 2025, the hedge fund’s internal Medallion Fund gained an estimated 20%.
At his death, Simons’ fortune stood at $31.4 billion, largely from Renaissance’s success. Renaissance’s other funds have also performed strongly: the Institutional Diversified Alpha Fund gained 9.05% by February 2025 after a 15.6% return in 2024, while the Institutional Equities Fund rose 11.85% in early 2025, its best start in a decade. Both funds manage risk with stock index futures and options, though the firm cautions that unwinding large positions could impact markets.
With that in mind, let’s take a look at the best micro and small cap stocks to buy according to Jim Simons’ Renaissance Technologies.
Jim Simons of Renaissance Technologies
Our Methodology
For this list, we picked stocks from Renaissance Technologies’ 13F portfolio as of the end of Q1 2026. From there, we identified companies with a market cap of $2 billion or lower in the portfolio. Next, we selected the fund’s top 30 holdings by equity value within this market-cap range. We also detailed the number of hedge funds holding stakes in the stocks in Q4 2025. Finally, we ranked the stocks in ascending order based on Renaissance Technologies’ equity value in them.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research shows we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
Best Micro and Small Cap Stocks to Buy According to Jim Simons’ Renaissance Technologies
15. Pediatrix Medical Group Inc (NYSE:MD)
Renaissance Technologies Equity Stake: $32.78 Million
Number of Hedge Fund Holders: 21
Market Cap: $1.77 Billion
Pediatrix Medical Group Inc (NYSE:MD) is one of the best micro and small cap stocks to buy according to Jim Simons’ Renaissance Technologies. Pediatrix Medical Group Inc (NYSE:MD) has soared roughly 56% over the past year, and analysts see more upside potential in it.
Pediatrix Medical Group released its Q1 2026 financial results on May 5. It delivered revenue of $476.2 million, an increase from $458.4 million in the same period the prior year. The revenue also came well above the $465.7 million that analysts expected.
The management attributed the increase to growth in same-unit revenue as well as recent acquisitions. The company posted adjusted EBITDA of $58.2 million, compared with $49.2 million a year ago. Again, the management said favorable same-unit results and recent acquisitions drove the increase in adjusted EBITDA.
Net income was $29.6 million, or $0.36 per share, reflecting an increase from $20.7 million, or $0.24 per share in the same quarter a year ago. Adjusted EPS of $0.44 rose from $0.33 a year ago and surpassed the Street’s expectation of $0.38. The company wrapped the quarter with a cash balance of $205.8 million and $224.8 million in net accounts receivable.
Looking ahead, Pediatrix Medical Group is anticipating full-year 2026 adjusted EBITDA between $280 million and $300 million. The company’s CEO Mark S. Ordan said that robust cash flow and a solid balance sheet positions them well to “find new opportunities and move decisively.”
Pediatrix Medical Group Inc (NYSE:MD) is a medical practice company. It partners with hospitals and healthcare facilities to provide specialist medical care to women, babies, and children. This physician-led practice group operates in 37 states and has hundreds of hospital partners.
14. Willis Lease Finance Corp (NASDAQ:WLFC)
Renaissance Technologies Equity Stake: $33.68 Million
Number of Hedge Fund Holders: 15
Stock Upside Potential: 26.50%
Market Cap: $1.26 Billion
Willis Lease Finance Corp (NASDAQ:WLFC) is one of the best micro and small cap stocks to buy according to Jim Simons’ Renaissance Technologies. The stock has gained roughly 36% year-to-date and soared almost 60% over the past six months. Analysts see more upside in Willis Lease Finance Corp (NASDAQ:WLFC) shares, forecasting a rise of at least 26% from the current level.
On May 13, Willis Lease Finance Corp announced the offering of $200 million in convertible senior notes. It said that it was expecting the offering to generate net proceeds of around $193.1 million. But the proceeds could be more since the company granted the underwriters an option to purchase up to $30 million in additional notes to cover over-allotments.
These notes mature in May 2031 and carry an interest rate of 2.50%. At maturing, investors can swap these notes for Willis Lease Finance Corp shares instead of receiving cash. For those who opt for equity instead of cash, the conversion rate is 3.7202 shares of stock per $1,000 of notes. This represents a conversion price of around $268.80, which is roughly 46% above the current WLFC stock price.
Willis Lease Finance Corp’s upsizing of the offering also demonstrates strong investor interest in the notes. The company increased the offering size from $175 million, as announced originally. Willis Lease Finance Corp plans to use the proceeds from this offering to repay amounts outstanding under its revolving credit facility.
Willis Lease Finance Corp (NASDAQ:WLFC) is a global aviation company engaged in leasing business. The company leases commercial aircraft, aircraft engines, and aircraft spare parts. It serves airlines, MRO facilities, and other parties in the aviation industry.
