Hedge Fund Renaissance Technologies’ Tech Picks Include Qualcomm

Renaissance Technologies, founded by Jim Simons, has been one of the most successful investment funds in history and has made Simons a multi-billionaire. Hedge funds such as Renaissance issue quarterly 13F filings six to seven months after the end of each quarter to disclose their long equity holdings as of the end of that quarter (so the most recent batch is for the end of December). Even though there is a lag in 13Fs it is still possible to develop profitable investment strategies based on the included information; we have found that the most popular small cap stocks among hedge funds generate an average excess return of 18 percentage points per year (read more about imitating small cap picks). We can also see what stocks hedge funds live in different industries or sectors. Read on for our brief take on Renaissance’s top five tech picks as of the end of December or see the full list of stocks the fund reported owning.

The fund owned nearly 20 million shares of Intel Corporation (NASDAQ:INTC) at the end of the fourth quarter of 2012. Intel trades at 10 times earnings whether we compare its $106 billion market cap to trailing earnings or to analyst consensus for 2014; the stock has fallen 23% in the last year as the markets worry that changes in personal computing will hurt the company. Earnings were down 27% last quarter compared to the fourth quarter of 2011. Billionaire Ken Fisher’s Fisher Asset Management reported a position of over 18 million shares (find Fisher’s favorite stocks). We’d note that at current dividend levels Intel’s yield is over 4%.

Communications equipment and services company Qualcomm, Inc. (NASDAQ:QCOM) was another of Renaissance’s top tech picks. Qualcomm had made our list of the most popular tech stocks among hedge funds for Q4 (check out the top ten list) with Renaissance increasing its position to 5.3 million shares. Business has been up at Qualcomm, going by its most recent quarterly report, and while some additional growth is priced into the stock given its trailing earnings multiple of 17 Wall Street analysts are expecting enough improvement that the forward P/E is only 14.

See three more of Renaissance’s tech stocks: