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10 Best Cheap Stocks to Buy Now According to Billionaire Jim Simons

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·9 min read
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In this article we discuss the 10 best cheap stocks to buy now according to billionaire Jim Simons. If you want to skip our detailed analysis of Simons’ history and hedge fund performance, go directly to the 5 Best Cheap Stocks to Buy Now According to Billionaire Jim Simons.

Jim Simons, who oversees Renaissance Technologies, uses mathematical models and statistical analysis to predict markets and analyze stock movements. His techniques use a data-driven approach to beat the market. Renaissance’s Medallion fund employs high-frequency trading exploiting inefficiencies in the stock market using various strategies.

In this article we will take a look at some of the best cheap stocks in Renaissance portfolio by examining their 13F holdings data for the first quarter of 2021. But first, let's see some of the most famous and important stocks in the hedge fund's portfolio.

In its latest quarterly filings Renaissance revealed that it owns 4.97 million shares of Sony Group Corporation (NYSE: SONY), worth $52.66 million. The fund upped its stake by 232% in the company. Recently Sony and NetEase Cloud Music collaborated after which SME’s music will be made available in China. To launch its gaming-centric social app on PlayStation console, Sony Group Corporation (NYSE: SONY) also collaborated with Discord.

Another stock where Renaissance upped its stake is Apple Inc. (NASDAQ: AAPL), of which it owns 1.24 million shares. TF International Securities’ analyst Ming-Chi Kuo expects Apple Inc. (NASDAQ: AAPL) to release a foldable iPhone in 2023, and believes that it will ship 20 million units in the very first year. Kuo also estimated that Apple Inc. (NASDAQ: AAPL) will start using its 5G baseband chip by 2023.

Renaissance also trimmed its stake in Microsoft Corporation (NASDAQ: MSFT) by 68.57% to 520,184 shares at the end of Q1 2021. John McPeake, an analyst at Rosenblatt, initiated a coverage on Microsoft and rated it as “Buy” with a price a target of $301. Rosenblatt expects that Microsoft Corporation (NASDAQ: MSFT) will generate 78% of total revenue from recurring sources in the near future.

Another tech company worth mentioning is Amazon.com, Inc. (NASDAQ: AMZN), in which Simons owns 15,855 shares. However, the billionaire cut his stake by over 80% in Amazon.com, Inc. (NASDAQ: AMZN) in the period. The company posted net income of $8.1 billion in Q1 2021, compared to a net income of $2.5 billion in Q1 2020. During the same quarter the net sales increased 44%. Amazon.com, Inc. (NASDAQ: AMZN) is planning to enter into medical diagnostics, and will offer home diagnostics services.

10 Best to Buy Now According to Billionaire Jim Simons
10 Best to Buy Now According to Billionaire Jim Simons

Jim Simons of Renaissance Technologies

In January 2021, Jim Simons stepped down as chairman of Renaissance Technologies. The fund market value was $80.38 billion at the end of Q1 2021, compared to $92.09 billion in Q4 2020. It remains to be seen whether Renaissance Technologies can navigate post-pandemic market dynamics that seem to be clouding the finance world. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 88 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.

With this context in mind, here is our list of the 10 best cheap stocks to buy now according to billionaire Jim Simons:

Best Cheap Stocks to Buy Now According to Billionaire Jim Simons

10. Central Puerto S.A. (NYSE: CEPU)

Simons’ Stake Value: $1,152,000 Percentage of Jim Simons’ 13F Portfolio: 0.0014% Number of Hedge Fund Holders: 3

Central Puerto S.A. (NYSE: CEPU) produces and sells electric power to public and private customers in Argentina. It was founded in 1989 and is ranked tenth on our list of 10 best cheap stocks to buy now according to billionaire Jim Simons. Just like Sony Group Corporation (NYSE: SONY), Apple Inc. (NASDAQ: AAPL), Amazon.com, Inc. (NASDAQ: AMZN), and Microsoft Corporation (NASDAQ: MSFT), Central Puerto is one of the stocks in billionaire Jim Simons' portfolio.

Renaissance holds 509,704 shares in the company worth over $1.15 million, as the stake was upped by 274% in the past quarter. In Q1 2021, the EPS was Ps.4.21, while revenue during the period was down 11% YoY to Ps.10.16 billion. Gross profit was reported at Ps. 4.97 billion, compared to Ps. 6.69 billion a year ago.

Out of the hedge funds being tracked by Insider Monkey, Millennium Management is a leading shareholder in Central Puerto S.A. (NYSE: CEPU) with 55,784 shares worth more than $126,000. The fund added stake in the last quarter.

9. Companhia Siderúrgica Nacional (NYSE: SID)

Simons’ Stake Value: $6,677,000 Percentage of Jim Simons’ 13F Portfolio: 0.001% Number of Hedge Fund Holders: 10

Companhia Siderúrgica Nacional (NYSE: SID) produces steel in Brazil and Latin America. It is placed ninth on our list of 10 best cheap stocks to buy now according to billionaire Jim Simons.

The company posted Q1 net income of R$5.7 billion, while revenue during the period increased 123.5% YoY to R$11.91 billion. The company is planning to increase its prices by 25% in Q2 to reduce its debt.

The hedge fund managed by Jim Simons owns more than 996,513 shares in the company worth over $18.61 million. Renaissance has upped their stake in the firm by 1,523% in last three months. Companhia Siderúrgica stock has returned more than 351% to investors over the course of the past twelve months. Out of the hedge funds being tracked by Insider Monkey, Capital Growth Management is a leading shareholder in Companhia Siderúrgica Nacional (NYSE: SID) with 4.07 million shares worth more than $27.27 million.

8. Itaú Unibanco Holding S.A. (NYSE: ITUB)

Simons’ Stake Value: $469,000 Percentage of Jim Simons’ 13F Portfolio: 0.001% Number of Hedge Fund Holders: 12

Itaú Unibanco Holding S.A. (NYSE: ITUB) operates in three main segments. It is ranked eight on our list of 10 best cheap stocks to buy now according to billionaire Jim Simons. Just like Sony Group Corporation (NYSE: SONY), Apple Inc. (NASDAQ: AAPL), Amazon.com, Inc. (NASDAQ: AMZN), and Microsoft Corporation (NASDAQ: MSFT), Itaú is one of the notable stocks to buy in Simons' portfolio.

For Q1 the company posted EPS of R$0.55, while the revenue during the period was up 2.8% YoY to R$30.03 billion. The company expects its credit portfolio to grow 5.5%-9.5% this year.

Itaú stock has offered 34.13% in returns to investors over the course of the past twelve months. Renaissance holds 94,474 shares in the company worth over $469,000. Renaissance has trimmed stakes in the firm by 97% in the past few months. Out of the hedge funds being tracked by Insider Monkey, Oaktree Capital Management is a leading shareholder in Itaú Unibanco Holding S.A. (NYSE: ITUB) with 25.09 million shares worth more than $124.43 million.

7. Petróleo Brasileiro S.A. - Petrobras (NYSE: PBR)

Simons’ Stake Value: $72,469,000 Percentage of Jim Simons’ 13F Portfolio: 0.09% Number of Hedge Fund Holders: 27

Petróleo Brasileiro S.A. - Petrobras (NYSE: PBR) sells oil and gas internationally. It is placed seventh on our list of 10 best cheap stocks to buy now according to billionaire Jim Simons. The stock has offered investors more than 33% in returns over the course of the past twelve months.

The company signed a contract with Keppel Shipyards, where it will build the seventh floating, storage production, and offloading unit that will be installed in Brazil’s Buzios field. In May, Bradesco BBI’s analyst Vicente Falanga upgraded the stock to “Outperform” from “Neutral.” Christian Audi, an analyst at Banco Santander, also upgraded the stock to “Hold” from “Underweight,” in the same period.

The hedge fund run by Jim Simons owns more than 8.54 million shares in the company worth over $72.47 million, representing 0.09% of their portfolio. The fund reduced its stake by 78% in the past quarter. At the end of the first quarter of 2021, 27 hedge funds in the database of Insider Monkey held stakes worth $878.46 million in Petróleo Brasileiro S.A. - Petrobras (NYSE: PBR), up from 24 the preceding quarter worth $1.33 billion.

6. United Microelectronics Corporation (NYSE: UMC)

Simons’ Stake Value: $128,749,000 Percentage of Jim Simons’ 13F Portfolio: 0.16% Number of Hedge Fund Holders: 11

United Microelectronics Corporation (NYSE: UMC) is a semiconductor wafer foundry in Singapore, China, Taiwan, Japan, Hong Kong, Europe, and the United States. It is ranked sixth on our list of 10 best cheap stocks to buy now according to billionaire Jim Simons. The stock has offered investors more than 271% in returns over the last year.

The company posted an 8.78% increase in its monthly sales revenue in April, while the figure was 14.06% in March.

For the first quarter of 2021, the company posted EPS of NT$0.85, compared to $0.19 posted in Q1 2020. Revenue was up 4% QoQ to NT$14.10 billion. For Q2 2021 the wafer shipments are expected to increase 2% QoQ.

Renaissance holds more than 14.13 million shares in the firm worth over $128.45 million. This represents 0.16% of their portfolio. Renaissance activity on United Microelectronics Corporation (NYSE: UMC) stock decreased by 23% in the past few months, latest data reveals. Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm Arrowstreet Capital is another leading shareholder in United Microelectronic with 1.89 million shares worth more than $17.23 million.

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Disclosure: None. 10 Best Cheap Stocks to Buy Now According to Billionaire Jim Simons is originally published on Insider Monkey.