One of the best ways to pick high-performing stocks is to follow the industry leaders and find out their stock investments. Today, we decided to cover some common stock picks of Jim Simons’ Renaissance Technologies and Cliff Asness’ AQR Capital Management. Jim Simons and Cliff Asness are both known for their knowledge of the finance world and understanding of the stock market. Jim Simons focuses towards the inefficiencies of the stock market, whereas Cliff Asness performs fundamental analysis to understand the true value of a stock.
Both investors like to diversify their portfolios across sectors and industries. In this article we will take a look at a couple of companies, in which both Simons and Asness hold long positions, such as Apple Inc. (NASDAQ:AAPL), Gilead Sciences, Inc. (NASDAQ:GILD), Amgen, Inc. (NASDAQ:AMGN), PepsiCo, Inc. (NYSE:PEP), and Intel Corporation (NASDAQ:INTC).
At Insider Monkey, we track hedge funds’ moves in order to identify actionable patterns and profit from them. Our research has shown that hedge funds’ large-cap stock picks historically delivered a monthly alpha of six basis points, though these stocks underperformed the S&P 500 Total Return Index by an average of seven basis points per month between 1999 and 2012. On the other hand, the 15 most popular small-cap stocks among hedge funds outperformed the S&P 500 Index by an average of 95 basis points per month (read the details here). Since the official launch of our small-cap strategy in August 2012, it has performed just as predicted, returning over 144% and beating the market by more than 84 percentage points. We believe the data is clear: investors will be better off by focusing on small-cap stocks utilizing hedge fund expertise rather than large-cap stocks.
Follow Jim Simons's Renaissance Technologies
Apple Inc. (NASDAQ:AAPL) represents the largest holding of AQR Capital Management, which owns 6.89 million shares valued at $857.71 million, while Jim Simons’ Renaissance Technologies owns 2.22 million shares worth $276.10 million. The Cupertino-based device maker is set to launch Apple Music next week with iOS 8.4 version. After an open letter from Taylor Swift, Apple Inc. (NASDAQ:AAPL) has announced that it will pay musicians for the content downloaded during the trial period. The company will offer a 3-month trial after which, Apple Music will be available for monthly charges of $9.99 for single users and $14.99 for family plans. Among the funds we track, billionaires Carl Icahn’s Icahn Capital and Ken Fisher’s Fisher Asset Management also hold large positions in Apple Inc. (NASDAQ:AAPL) as of the end of March.
Both investors have a significant exposure to the healthcare sector and Gilead Sciences, Inc. (NASDAQ:GILD) is their common stock pick. According to their latest 13F filings, AQR Capital Management’s position in the biopharmaceutical company includes 4.11 million shares valued at $403.77 million. Renaissance Technologies maintains an equally large position with 4.03 million shares worth $395.67 million. Gilead Sciences, Inc. (NASDAQ:GILD) is facing some stringent competition in the Hepatitis C virus market with the entrance of other competitors, including AbbVie Inc (NYSE:ABBV) and Merck & Co., Inc. (NYSE:MRK). However, the entrance of Merck & Co., Inc. (NYSE:MRK) in the HCV market is unlikely to rage any pricing wars that happened with the entrance of AbbVie last year. The biopharmaceutical company also has Donald Chiboucis’ Columbus Circle Investors and Samuel Isaly’s Orbimed Advisors among its shareholders.
Then there is Amgen, Inc. (NASDAQ:AMGN), in which Renaissance Technologies and AQR Capital Management own 1.52 million shares valued at $243.62 million and 1.81 million shares with a value of $289.63 million respectively. Last month, the biotechnology company released encouraging results from the Phase 2 study of its episodic migraine prevention drug, AMG334. The study involving 383 patients, showed that a 70mg monthly dose of the drug reduced average monthly migraine days by 4.9 days, against a baseline average of 8.7 days. A significantly higher safety profile for the drug is likely to open new market for the company, as shown in its present results. Dan Loeb’s Third Point owns a total of 10 million shares of Amgen, Inc. (NASDAQ:AMGN) as of the end of the first quarter.
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PepsiCo, Inc. (NYSE:PEP) was also in the equity portfolios of Renaissance Technologies and AQR Capital Management, with the former holding 2.30 million shares and the latter owning 2.47 million shares. The stock of the beverage-maker have remained almost flat year-to-date and it has an average “Buy” rating with 12-months price target of $106.48. Yacktman Asset Management and Trian Partners are the two largest shareholders of PepsiCo, Inc. (NYSE:PEP) among the funds tracked at Insider Monkey.
Intel Corporation (NASDAQ:INTC) is another technology pick of Renaissance and AQR, whose stock declined by 12.24% year-to-date. Renaissance Technologies owns 6.87 million shares of Intel Corporation (NASDAQ:INTC) valued at $214.86 million and AQR Capital Management owns 9.96 million shares valued at $311.58 million, as of the end of March. The chipmaker is struggling with a lower demand in the PC market and the company confirmed recent round of layoffs with an undisclosed reduction in headcount. Aside from Renaissance and AQR, First Eagle Investment Management and Fisher Asset Management also hold large stakes in Intel Corporation (NASDAQ:INTC).
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