In this article, we discuss the 10 best stocks to buy now according to quant billionaire Jim Simons’ Fund.
Jim Simons, the chief of New York-based Renaissance Technologies, a hedge fund with a portfolio value in excess of $77 billion at the end of the third quarter of 2021, is often termed the “smartest billionaire in the world” because of his advanced degree in Mathematics and the employment of quant strategies at the fund that have helped him turn it into one of the largest investment firms in the United States. Simons has a personal net worth of more than $24 billion and is placed 28th on the list of 400 richest Americans in 2021 maintained by Forbes.
Latest 13F filings show that the portfolio value of Renaissance Technologies dropped by about $3 billion between June and September this year as the fund made new purchases in 665 stocks, additional purchases in 934, sold out of 657, and reduced holdings in 1,804 equities. The top ten holdings of the fund comprise just over 12% of the portfolio and are concentrated in high-growth sectors like software and semiconductors. Simons is famous because between 1988 to 2018, the flagship Medallion Fund of his firm returned 66% annualized to investors.
Some of the top stocks in the portfolio of Renaissance Technologies at the end of September included Microsoft Corporation (NASDAQ:MSFT), Atlassian Corporation Plc (NASDAQ:TEAM), and Zoom Video Communications, Inc. (NASDAQ:ZM), among others discussed in detail below.
Our Methodology
The companies listed below were taken from the investment portfolio of Renaissance Technologies at the end of the third quarter of 2021. The analyst ratings and business fundamentals of the firms are also discussed to provide readers with some additional context for their investment choices.
The hedge fund sentiment around each stock was calculated using the data of 867 hedge funds tracked by Insider Monkey.
Jim Simons of Renaissance Technologies
Best Stocks to Buy Now According to Quant Billionaire Jim Simons’ Fund
10. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 65
Advanced Micro Devices, Inc. (NASDAQ:AMD) is a semiconductor firm. Latest data shows that Renaissance Technologies owned 6.8 million shares of Advanced Micro Devices, Inc. (NASDAQ:AMD) at the end of the third quarter of 2021 worth $705 million, representing 0.91% of the portfolio.
On November 9, investment advisory Wedbush maintained an Outperform rating on Advanced Micro Devices, Inc. (NASDAQ:AMD) stock and raised the price target to $165 from $140. Analyst Matt Bryson issued the ratings update.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in Advanced Micro Devices, Inc. (NASDAQ:AMD) with 12 million shares worth more than $1.3 billion.
Just like Microsoft Corporation (NASDAQ:MSFT), Atlassian Corporation Plc (NASDAQ:TEAM), and Zoom Video Communications, Inc. (NASDAQ:ZM), Advanced Micro Devices, Inc. (NASDAQ:AMD) is one of the stocks on the radar of elite investors.
In its Q4 2020 investor letter, Artisan Partners Limited Partnership, an asset management firm, highlighted a few stocks and Advanced Micro Devices, Inc. (NASDAQ:AMD) was one of them. Here is what the fund said:
“We also exited our positions in Advanced Micro Devices. Our investment campaign in Advanced Micro Devices (AMD) began in the second half of 2018, and we have seen a new management team reinvigorate the company’s product portfolio of microprocessors for PCs and servers, graphics processors, and video game consoles. These new, higher-margin products have helped the company partially close its margin gap with peers and capture share from market leader Intel. While we believe there is meaningful runway for further share gains and margin expansion, AMD has appreciated far beyond our mid-cap market cap mandate, and we exited our position.”
9. Target Corporation (NYSE:TGT)
Number of Hedge Fund Holders: 49
Target Corporation (NYSE:TGT) operates as a general merchandise retailer. According to regulatory filings, Renaissance Technologies owned 3 million shares in Target Corporation (NYSE:TGT) at the end of September 2021 worth $705 million, representing 0.91% of the portfolio.
Target Corporation (NYSE:TGT) posted earnings for the third quarter on November 17, reporting earnings per share of $3.03, beating estimates by $0.23. The revenue over the period was $25.6 billion, up 13% year-on-year.
Among the hedge funds being tracked by Insider Monkey, Florida-based investment firm GQG Partners is a leading shareholder in Target Corporation (NYSE:TGT) with 5.5 million shares worth more than $1.2 billion.
8. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 83
NVIDIA Corporation (NASDAQ:NVDA) is a visual computing firm. The hedge fund of Jim Simons owned 3.4 million shares of NVIDIA Corporation (NASDAQ:NVDA) at the end of the third quarter of 2021 worth more than $710 million, representing 0.91% of the total portfolio.
Tigress Financial analyst Ivan Feinseth recently raised the price target on NVIDIA Corporation (NASDAQ:NVDA) stock to $400 from $230 and kept a Buy rating, noting the potential of the firm to power the emerging metaverse and omniverse concepts.
At the end of the third quarter of 2021, 83 hedge funds in the database of Insider Monkey held stakes worth $10 billion in NVIDIA Corporation (NASDAQ:NVDA), down from 86 the preceding quarter worth $9 billion.
In its Q1 2021 investor letter, Vulcan Value Partners, an asset management firm, highlighted a few stocks and NVIDIA Corporation (NASDAQ:NVDA) was one of them. Here is what the fund said:
“NVIDIA Corp. is the dominant supplier of Graphics Processing Units (GPUs) worldwide. NVIDIA’s GPUs are at the intersection of a number of important computing trends including the movement to the Cloud, artificial intelligence, autonomous vehicles, edge computing, gaming, and more. We previously owned NVIDIA and sold it in the third quarter of 2020 as the price to value gap closed and our margin of safety was reduced. As with all our MVP companies, we continued to follow NVIDIA closely. Since that time, NVIDIA reported excellent results and its value has compounded rapidly. The technology selloff at the beginning of the year negatively affected the stock price while our estimate of NVIDIA’s value per share increased. This happy combination of events created a margin of safety and an opportunity to once again add NVIDIA to the portfolio.”
7. The Kroger Co. (NYSE:KR)
Number of Hedge Fund Holders: 39
The Kroger Co. (NYSE:KR) is an Ohio-based retailer. Renaissance Technologies owned 18 million shares in The Kroger Co. (NYSE:KR) at the end of September 2021 worth $750 million, representing 0.96% of the portfolio of the fund.
The Kroger Co. (NYSE:KR) announced on December 8 that it would be expanding a customer fulfilment center in North Carolina. The expansion will integrate machine learning and robotics within the delivery system of the company.
At the end of the third quarter of 2021, 39 hedge funds in the database of Insider Monkey held stakes worth $3.9 billion in The Kroger Co. (NYSE:KR), the same as in the preceding quarter worth $3.5 billion.
6. Moderna, Inc. (NASDAQ:MRNA)
Number of Hedge Fund Holders: 49
Moderna, Inc. (NASDAQ:MRNA) is a biotech firm based in Cambridge. At the end of the third quarter of 2021, Renaissance Technologies owned 1.9 million shares in Moderna, Inc. (NASDAQ:MRNA) worth $769 million, representing 0.99% of the portfolio.
Cowen analyst Tyler Van Buren recently initiated coverage of Moderna, Inc. (NASDAQ:MRNA) stock with a Market Perform rating and a price target of $250, noting that the demand for COVID-19 booster shots was a growth catalyst for the company in the near-term.
At the end of the third quarter of 2021, 49 hedge funds in the database of Insider Monkey held stakes worth $7.3 billion in Moderna, Inc. (NASDAQ:MRNA), up from 37 in the preceding quarter worth $5.7 billion.
In addition to Microsoft Corporation (NASDAQ:MSFT), Atlassian Corporation Plc (NASDAQ:TEAM), and Zoom Video Communications, Inc. (NASDAQ:ZM), Moderna, Inc. (NASDAQ:MRNA) is one of the stocks that hedge funds are buying.
In its Q2 2021 investor letter, Baillie Gifford, an asset management firm, highlighted a few stocks and Moderna, Inc. (NASDAQ:MRNA) was one of them. Here is what the fund said:
“Among the top contributors to Fund performance in the second quarter was Moderna. Moderna has just reported its first profitable quarter in the company’s history – net income for the most recent quarter was $1.2 billion. It reported revenue of $1.9 billion, an impressive increase compared to $8 million a year ago, driven by the sales of its Covid-19 vaccine. Moderna is expecting to deliver up to 1 billion vaccine doses in 2021 and is in discussions to increase global supply to governments around the world. Our long-term focus remains on the transformational potential of Moderna’s technology and its ability to address different diseases.”
5. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 250
Microsoft Corporation (NASDAQ:MSFT) is a diversified technology company with core interests in the software business. Regulatory filings show that Renaissance Technologies owned 2.9 million shares in Microsoft Corporation (NASDAQ:MSFT) at the end of the third quarter of 2021 worth over $835 million, representing 1.07% of the portfolio.
Wells Fargo analyst Michael Turrin recently initiated coverage of Microsoft Corporation (NASDAQ:MSFT) stock with an Overweight rating and a price target of $400, highlighting that the firm had a “bright future ahead”.
At the end of the third quarter of 2021, 250 hedge funds in the database of Insider Monkey held stakes worth $6.5 billion in Microsoft Corporation (NASDAQ:MSFT), up from 238 in the preceding quarter worth $6.2 billion.
In its Q1 2021 investor letter, Polen Capital, an investment management firm, highlighted a few stocks and Microsoft Corporation (NASDAQ:MSFT) was one of them. Here is what the fund said:
“We have written extensively about Microsoft in recent commentaries. It was our leading contributor last year and one of our largest weightings within the Portfolio. It continues to experience business momentum through several dominant, essential, and competitively advantaged businesses, like Office 365 and Azure. The markets it competes for are enormous, which gives the company the ability to compound at scale. In the past quarter alone, the company generated over $40 billion in revenue, representing a 17% growth rate. The inherent operating leverage in Microsoft’s business model continues and led to 34% earnings growth this past quarter. Despite the broad rotation we saw in the first quarter and Microsoft’s robust performance in 2020, we think its business fundamentals continue to exhibit strength, and the stock continues to reflect the fundamentals.”
4. Zoom Video Communications, Inc. (NASDAQ:ZM)
Number of Hedge Fund Holders: 56
Zoom Video Communications, Inc. (NASDAQ:ZM) owns and runs a video communications platform. According to the latest data, Renaissance Technologies owned 3.2 million shares in Zoom Video Communications, Inc. (NASDAQ:ZM) at the end of September 2021 worth $840 million, representing 1.08% of the portfolio.
Zoom Video Communications, Inc. (NASDAQ:ZM) recently made a direct investment in Genesys Cloud Services, a call center software firm that is valued at over $21 billion and raised $580 million at a funding round earlier this month.
Among the hedge funds being tracked by Insider Monkey, New York-based firm Tiger Global Management LLC is a leading shareholder in Zoom Video Communications, Inc. (NASDAQ:ZM) with 4.7 million shares worth more than $1.2 billion.
In its Q1 2021 investor letter, Artisan Partners, an asset management firm, highlighted a few stocks and Zoom Video Communications, Inc. (NASDAQ:ZM) was one of them. Here is what the fund said:
“We concluded our campaigns in Zoom Video Communications. We have been paring our position in Zoom for several quarters, anticipating the reduced need for video conferencing as vaccination rates climb and people return to their workplaces. That said, we believe there is a strong case to be made that the pandemic has prompted a permanent inflection in videoconferencing’s importance—sustainably higher remote work arrangements, more online learning and less business travel. Furthermore, the company’s dramatically expanded user base (up 485% YoY in Q3) positions it well to cross sell additional services, Zoom Phone in particular. The long-term future remains bright, but we decided to end our successful investment campaign in favor of opportunities in our pipeline with more attractive near-term growth prospects.”
3. VeriSign, Inc. (NASDAQ:VRSN)
Number of Hedge Fund Holders: 40
VeriSign, Inc. (NASDAQ:VRSN) provides internet services and infrastructure. Securities filings show that Renaissance Technologies owned 4.6 million shares in VeriSign, Inc. (NASDAQ:VRSN) at the end of the third quarter of 2021 worth $947 million, representing 1.22% of the portfolio.
VeriSign, Inc. (NASDAQ:VRSN) stock has returned more than 17% to investors over the past twelve months. The company recently beat market estimates on earnings per share and revenue for the third quarter by $0.03 and $2 million respectively.
At the end of the third quarter of 2021, 40 hedge funds in the database of Insider Monkey held stakes worth $5.3 billion in VeriSign, Inc. (NASDAQ:VRSN), down from 41 in the preceding quarter worth $6.1 billion.
2. Atlassian Corporation Plc (NASDAQ:TEAM)
Number of Hedge Fund Holders: 60
Atlassian Corporation Plc (NASDAQ:TEAM) is an application software firm. Renaissance Technologies owned 3.1 million shares in Atlassian Corporation Plc (NASDAQ:TEAM) at the end of September 2021 worth $1.2 billion, representing 1.60% of the portfolio.
Atlassian Corporation Plc (NASDAQ:TEAM) posted earnings for the first fiscal quarter in late October, reporting earnings per share of $0.46, beating predictions by $0.06. The revenue over the period was $614 million, up 33% year-on-year.
At the end of the third quarter of 2021, 60 hedge funds in the database of Insider Monkey held stakes worth $6 billion in Atlassian Corporation Plc (NASDAQ:TEAM), down from 64 the preceding quarter worth $4 billion.
Here is what Baron Opportunity Fund has to say about Atlassian Corporation Plc (NASDAQ:TEAM) in its Q2 2021 investor letter:
“Atlassian Corporation Plc is a software leader that makes tools that are used by thousands of teams worldwide, thus its ticker TEAM. Atlassian’s tools “help teams collaborate, build, and create together” (quote from Atlassian’s website), with an emphasis on designing, developing, and maintaining software, including JIRA for team planning and project management, Confluence for team content creation and sharing, HipChat for team messaging and communications, Bitbucket for team software code sharing and management, and JIRA Service Desk for team services and support use cases. Atlassian is the recognized market leader for information technology team planning and project management software, and has extended its product offering into tangential areas, such as those listed above. The company is in the midst of transitioning its business model to the cloud, which will help it drive faster product innovation, more seamlessly integrate its product families, and raise the effective price realization for its suite of products. Atlassian is run by its two visionary founders, has strong competitive advantages, and we think it should be able to grow revenue over 25% for many years with best-in-class free cash flow margins.”
1. Novo Nordisk A/S (NYSE:NVO)
Number of Hedge Fund Holders: 27
Novo Nordisk A/S (NYSE:NVO) is a healthcare firm based in Denmark. Latest securities filings reveal that Renaissance Technologies owned 21 million shares in Novo Nordisk A/S (NYSE:NVO) at the end of the third quarter of 2021 worth $2 billion.
On November 18, Novo Nordisk A/S (NYSE:NVO) announced that it had agreed to purchase Dicerna Pharmaceuticals in a deal worth $3 billion. The acquisition will help the former advance previous collaborations with the latter into clinical studies through 2022.
At the end of the third quarter of 2021, 27 hedge funds in the database of Insider Monkey held stakes worth $4 billion in Novo Nordisk A/S (NYSE:NVO), up from 20 in the previous quarter worth $3 billion.
In its Q3 2021 investor letter, LRT Capital Management highlighted a few stocks and Novo Nordisk A/S (NYSE:NVO) was one of them. Here is what the fund said:
“Novo Nordisk is the global leader in insulin, which is, sadly, a growing business as more and more people around the world suffer from diabetes. millions of people need daily injections of insulin to stay alive54, a number that, unfortunately, is likely to continue to grow by millions more in the coming decade. It may seem at first glance that insulin should be a commoditized business, after all, it was discovered and synthesized over a hundred years ago, but nothing could be further from the truth. There are many types of insulin and Novo Nordisk has spent billions on R&D over the years to develop new products. On February 11th, the company reported favorable results from a phase-3 trial of Semaglutide, a drug that is currently used for Type 2 diabetes treatment. The study evaluated the use of Semaglutide for weight loss treatment in non-diabetic patients and found a significant impact on weight loss for patients receiving Semaglutide vs. the placebo control group. If Semaglutide is approved for weight loss treatment, we expect it will be meaningfully accretive to the company’s bottom line.
The company’s proprietary product line supports returns on invested capital of over 40%, and while sales growth is relatively slow (+6% annualized CAGR over the past decade), the company’s shares trade at a reasonable valuation of only 22x forward earnings. For a company with an extremely predictable business, high returns on capital, and an easily forecastable future, we believe this to be highly attractive.”
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Disclosure. None. 10 Best Stocks to Buy Now According to Quant Billionaire Jim Simons’ Fund is originally published on Insider Monkey.
