In this article, we discuss Billionaire Jim Simons’ RenTech’s 10 Small-Cap Stock Picks with Huge Upside Potential.
Jim Simons was (and still is even after his death in May 2024) one of the biggest names – if not the biggest – in the hedge fund space. He was a gifted mathematician and had a successful career in academia before making a bold pivot to finance in the late 70s.
In 1978, he founded Monemetrics (a currency trading firm) and Limroy (a hedge fund), which were collapsed into one entity in 1982 and renamed Renaissance Technologies Corporation. This entity had one major objective: to use quantitative, computer-driven models to exploit market inefficiencies. In other words, Simons and his team were committed to making investment decisions based on sophisticated algorithms.
Renaissance Technologies (RenTech) began as a hedge fund but later morphed into something bigger. It is now an investment management firm that operates several hedge funds. Its flagship offering is the Medallion Fund. The Medallion Fund is known for extraordinary returns. During the dot.com crash (early 2000s) and the financial crisis (2007-2011), Medallion’s returns were 56.6% and 74.6%, respectively. Following the first two years of operation, the lowest annual return was 31.5%.
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The Medallion Fund’s track record in the market, and by extension RenTech’s, made Simons a lot of money. At death, he was worth $31.4 billion and ranked among the top 100 richest people in the world. And, as Simons often said, all of the success he had in the market comes down to the love of mathematics. Accordingly, the Medallion Fund has been capable of extraordinary returns mostly because the investment team – led by Simons – leveraged mathematics.
The fund utilizes algorithm-based methods to identify patterns and leverage past data for investing decisions. That is why RenTech invested (and continues to invest) billions in intellectuals and professionals from fields like Mathematics, Computer Science, and Physics. In one of his last interviews, he said: “We hired statisticians, physicists, astronomers, mathematicians — the important thing was that they were very smart.”
Jim Simons was a generational talent when it came to investing. He started an investment business and led to heights that others can only dream of. And because his legacy lives in RenTech, it makes sense to want to know what companies they’re invested in.
Jim Simons of Renaissance Technologies
Our Methodology
We sifted through Renaissance Technologies’ Q4 2024 SEC 13F filings to compile this list. We focused only on shares in companies and excluded interests in ETFs and options. Then, we picked the stocks with a market capitalization of $10 billion or less. From the result, we ranked the stocks based on analyst price targets and selected the top 10 companies with the highest upside potential (as of April 30).
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Billionaire Jim Simons’ RenTech’s 10 Small-Cap Stock Picks with Huge Upside Potential
10. Wynn Resorts, Limited (NASDAQ:WYNN)
Renaissance Technologies’ Stake Value: $139,299,697
Upside Potential as of May 1: 35.61%
Market Capitalization as of May 1: $8.50 Billion
Number of Hedge Fund Holders: 64
Wynn Resorts, Limited (NASDAQ:WYNN) designs, builds and operates luxury resorts and casinos. Its main products and services include high-end hotels, gaming facilities like casinos, fine dining restaurants, entertainment venues, spas, and retail spaces. The company operates primarily in the United States (Las Vegas and Boston) and Macau, China.
In Q4 2024, Wynn Resorts (NASDAQ:WYNN) reported flat operating revenues of $1.84 billion year-over-year. However, the full-year 2024 revenues increased to $7.13 billion, compared to $6.53 billion for the previous year. Net income for the quarter decreased to $277.0 million compared to $729.2 million for Q4 2023. For the full year 2024, net income was $501.1 million, compared to $730.0 million for the previous fiscal year. The Las Vegas Operations segment performed the best among the company’s operating segments. Operating revenues increased by 16.2% during the quarter to $655.2 million. This growth came on the back of rising casino revenues (29.9%) and hotel revenues (10.8%).
Wynn Resorts (NASDAQ:WYNN) is making serious international expansion moves. For instance, in the Wynn Al Marjan Island project in the UAE, construction has advanced to the thirty-fifth floor of the hotel tower. The company has contributed $631.7 million to the project to date, and the resort is expected to open in 2027. The company is also among several global casino operators showing interest in Thailand’s Entertainment Complex Project, according to a recent report by Inside Asian Gaming. Despite these positive developments, Argus downgraded the stock from Buy to Hold on April 23. The research firm cited concerns about a slow economic recovery in Macau and expectations of only modest growth in US operations.
9. Alkermes plc (NASDAQ:ALKS)
Renaissance Technologies’ Stake Value: $157,568,217
Upside Potential as of May 1: 35.04%
Market Capitalization as of May 1: $4.952 Billion
Number of Hedge Fund Holders: 36
Alkermes plc (NASDAQ:ALKS) is a biopharmaceutical company based in Ireland. It develops and manufactures medicines for mental health, neurological conditions, and cancer. Its key products include treatments for alcohol and opioid dependence (like VIVITROL®), schizophrenia (ARISTADA® and LYBALVI®), and bipolar I disorder.
In its fourth quarter and full-year 2024 financial results, Alkermes (NASDAQ:ALKS) reported total revenues of $1.56 billion for the year. Proprietary product net sales increased approximately 18% year-over-year to $1.08 billion. The company posted $372 million in GAAP net income from continuing operations and diluted earnings per share (EPS) of $2.20. Notably, VIVITROL revenues grew 31% (to $134.1 million) in the quarter compared to the same period in 2023. At the same time, LYBALVI revenues increased 37% to $77.0 million for the quarter.
These strong financial results align with growing opportunities in the addiction treatment space. A recent Harris Poll survey commissioned by Alkermes (NASDAQ:ALKS) revealed that 83% of respondents with alcohol use disorder (AUD) agreed that it’s difficult to treat/manage AUD through willpower alone. This highlights the importance of medical interventions. Additionally, market research indicates the global detox products market was valued at $66.23 billion in 2024 and is expected to grow at a CAGR of 6.3% through 2030. On April 28, 2025, UBS revised its price target for Alkermes (NASDAQ:ALKS) from $38 to $33 while maintaining a Neutral rating. The firm cited softer Q1 guidance and anticipated market dynamics related to upcoming orexin-related data releases in the latter half of 2025.
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