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10 Best Stocks to Buy According to Quant Genius Jim Simons’ Renaissance Technologies

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·12 min read
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In this article, we will take a look at the 10 best stocks to buy according to Jim Simon's Renaissance Technologies. You can skip our detailed analysis of Simon's history, investment philosophy, and hedge fund performance, and go directly to 5 Best Stocks to Buy According to Jim Simons' Renaissance Technologies.

Legendary billionaire, mathematician, philanthropist, and founder of the quantitative hedge fund Renaissance Technologies, Jim Simons is an expert in quantitative market analysis. After earning his bachelor's degree in Mathematics from the Massachusetts Institute of Technology in 1958, and his Ph.D. from the University of California, Berkeley in 1961, Jim Simons devoted himself to an esteemed career in academia and research. Between 1964 and 1968, Simons served as a member of the research staff of the Communications Research Division for the Institute for Defense Analyses (IDA), as well as taught mathematics at the Massachusetts Institute of Technology and Harvard University. He later joined Stony Brook University as well, where he ultimately was appointed chairman of the mathematics department. In 1978, Jim Simons delved into the world of Finance and founded Renaissance Technologies in 1982, where he served as the chief executive officer until his retirement in 2010. In January 2021, Simons stepped down as board chairman of Renaissance Technologies.

According to the most recent 13F Filings, Jim Simon's Renaissance Technologies, as an investment fund, manages more that $80 billion in 13F securities. Renaissance Technologies' portfolio is diversified across 13 distinct sectors, with the Healthcare sector as the largest, accounting for 15.6% of the fund's total portfolio. A majority of the companies in the fund’s portfolio are large-cap stocks, with stocks sizing up to more than $10 billion in market cap making up 12% of the fund's total value.

Some of the top stocks in the investment portfolio of Renaissance Technologies at the end of the second quarter of 2021 include Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG), Moderna, Inc. (NASDAQ:MRNA), Microsoft Corporation (NASDAQ:MSFT) and NVIDIA Corporation (NASDAQ:NVDA), among others discussed in detail below.

Jim Simons of Renaissance Technologies

Our Methodology

With this background in mind, let us now look towards the 10 best stocks to buy according to Jim Simons' Renaissance Technologies. We made use of Renaissance Technologies' 13F portfolio for the second quarter for this analysis. These are the top 10 stocks in Simons' second quarter portfolio based on the value of his fund's stakes.

Why should we pay attention to Jim Simons' stocks? 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 86 percentage points since March 2017. Between March 2017 and July 2021 our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by 86 percentage points (see the details here). 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, let's now start discussing the 10 best stocks to buy according to Jim Simon's Renaissance Technologies.

10 Best Stocks to Buy According to Jim Simons' Renaissance Technologies

10. Monster Beverage Corporation (NASDAQ:MNST)

Simons' Stake Value: $655.6 million

Percentage of Jim Simons' 13F Portfolio: 0.81%

Number of Hedge Fund Holders: 46

Monster Beverage Corporation (NASDAQ:MNST) is a California-based beverage company that manufactures and distributes energy drinks. Some of its most notable brands include Monster Energy, Relentless and Burn. Ranked tenth on our list of the 10 best stocks to buy according to Jim Simons' Renaissance Technologies, Monster Beverage Corporation (NASDAQ:MNST) has a market capitalization of $48.44 billion.

Jim Simons' Renaissance Technologies presently holds over 7.1 million shares of Monster Beverage Corporation (NASDAQ:MNST), amounting to more than $655.6 million in worth and representing 0.81% of the fund’s portfolio. By the end of the second quarter of 2021, 46 hedge funds out of the 873 tracked by Insider Monkey held stakes in Monster Beverage Corporation (NASDAQ:MNST), worth roughly $2.31 billion. This is compared to 45 hedge funds in the previous quarter with a total stake value of approximately $2.38 billion.

In the second quarter of 2021, Monster Beverage Corporation (NASDAQ:MNST) reported earnings per share of $0.75, beating estimates by $0.08. Monster Beverage Corporation (NASDAQ:MNST) also reported revenues amounting to $1.46 billion, surpassing forecast estimates by $70.08 million.

On July 30, Deutsche Bank analyst Steve Powers raised the firm's price target on Monster Beverage to $108 from $105 and kept a Buy rating on the shares.

9. The Kroger Co. (NYSE:KR)

Simons' Stake Value: $679.2 million

Percentage of Jim Simons' 13F Portfolio: 0.84%

Number of Hedge Fund Holders: 39

The Kroger Co. (NYSE:KR) is a retail corporation based in Cincinnati, Ohio. The company operates supermarkets and convenience stores throughout the United States, and is recognized as on of the countries largest retailers. Ranked ninth on the list of the 10 best stocks to buy according to Jim Simons' Renaissance Technologies, The Kroger Co. (NYSE:KR) has a market capitalization of $29.99 billion.

Jim Simons' Renaissance Technologies currently holds over 17.7 million shares of The Kroger Co. (NYSE:KR), amounting to more than $679.2 million in worth and representing 0.84% of the fund’s total portfolio. By the end of the second quarter of 2021, 39 hedge funds out of the 873 tracked by Insider Monkey held stakes in The Kroger Co. (NYSE:KR), worth around $3.56 billion. This is compared to 35 hedge funds in the previous quarter with a total stake value of approximately $3.15 billion.

In the second quarter of 2021, The Kroger Co. (NYSE:KR) reported earnings per share of $0.73, beating estimates by $0.19. The company also reported revenues amounting to $30.49 billion, surpassing estimates by $463.23 million.

On September 13, BMO Capital analyst Kelly Bania raised the firm's price target on The Kroger Co. (NYSE:KR) to $39 from $36 but kept a Market Perform rating on the shares.

Out of the hedge funds being tracked by Insider Monkey’s database, Warren Buffett's Berkshire Hathaway is a leading shareholder in The Kroger Co. (NYSE:KR) with 61.78 million shares worth more than $2.36 billion.

Just like Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG), Moderna, Inc. (NASDAQ:MRNA), Microsoft Corporation (NASDAQ:MSFT) and NVIDIA Corporation (NASDAQ:NVDA), The Kroger Co. (NYSE:KR) is one of the best stocks in Jim Simons' portfolio.

8. Moderna, Inc. (NASDAQ:MRNA)

Simon's Stake Value: $749.2 million

Percentage of Jim Simon's 13 Portfolio: 0.93%

Number of Hedge Fund Holders: 37

Moderna, Inc. (NASDAQ:MRNA) is a Cambridge-based pharmaceutical and biotechnology company that focuses on vaccine technologies. Ranked eighth on the list of the 10 best stocks to buy according to Jim Simons' Renaissance Technologies, Moderna, Inc. (NASDAQ:MRNA) has a market capitalization of $164.65 billion.

At present, Jim Simons' Renaissance Technologies holds over 3.18 million shares of Moderna, Inc. (NASDAQ:MRNA), amounting to more than $749.2 million in worth and representing 0.93% of the fund’s total portfolio. By the end of the second quarter of 2021, 37 hedge funds out of the 873 tracked by Insider Monkey held stakes in Moderna, Inc. (NASDAQ:MRNA), worth around $5.75 billion. This is compared to 39 hedge funds in the previous quarter with a total stake value of approximately $1.64 billion.

On August 5, Moderna, Inc. (NASDAQ:MRNA) released its quarterly earnings for the second quarter of 2021, with reported earnings per share at $6.46, crossing market estimates by $0.60. Additionally, the company reported revenues of $4.35 billion, beating forecast estimates by $120.59 million.

On August 6, Piper Sandler analyst Edward Tenthoff downgraded Moderna, Inc. (NASDAQ:MRNA) to Neutral from Overweight with a price target of $445, up from $246, after the company's results for the second quarter.

Just like Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG), Moderna, Inc. (NASDAQ:MRNA), Microsoft Corporation (NASDAQ:MSFT) and NVIDIA Corporation (NASDAQ:NVDA), Moderna, Inc. (NASDAQ:MRNA) is one of the best stocks in Jim Simons' portfolio.

In the Q2 2021 investor letter of Carillon Tower Advisers, the fund mentioned Moderna, Inc. (NASDAQ:MRNA). Here is what the fund said:

Moderna is a biotechnology company pioneering messenger RNA (mRNA) therapeutics and vaccines. The stock outperformed in the quarter, as the firm’s COVID-19 vaccine has shown effectiveness against the emerging variants of the disease, specifically the now prevalent Delta variant. The potential need for additional booster shots of the vaccine to maintain longer-term immunity as well as protection against possible future variants is also contributing to the stock’s move higher.”

7. Atlassian Corporation Plc (NASDAQ:TEAM)

Simons' Stake Value: $845.9 million

Percentage of Jim Simons' 13F Portfolio: 1.05%

Number of Hedge Fund Holders: 64

Atlassian Corporation Plc (NASDAQ:TEAM) is an Australian software company that is involved in the development of products for software developers, project managers and other software development teams. Its most notable product is JIRA, a workflow management system for teams to plan, track, collaborate, and manage projects. Ranked seventh on our list of the 10 best stocks to buy according to Jim Simons' Renaissance Technologies, Atlassian Corporation Plc (NASDAQ:TEAM) has a market capitalization of $98.39 billion.

Jim Simons' Renaissance Technologies currently holds 3.29 million shares of Atlassian Corporation Plc (NASDAQ:TEAM), amounting to $845.9 million in worth. These shares account for 1.05% of the fund’s portfolio. By the end of the second quarter of 2021, 64 hedge funds tracked by Insider Monkey held stakes in Atlassian Corporation Plc (NYSE: TEAM) worth around $4.17 billion, compared to 67 hedge funds in the previous quarter with a total stake value of approximately $3.95 billion.

In the second quarter of 2021, Atlassian Corporation Plc (NASDAQ:TEAM) issued its quarterly earnings report, with actual earnings per share at $0.37, beating estimates by $0.05. The company also reported a revenue of $501.36 million that surpassed estimated revenues by $27.48 million.

On September 27, Truist analyst Joel Fishbein raised the firm's price target on Atlassian Corporation Plc (NASDAQ:TEAM) to $400 from $270 but kept a Hold rating on the shares, noting that the firm awaited a more attractive level in the stock, despite the company's success due to its transition to the cloud.

In the Q2 2021 Investor Letter, Baron Opportunity Fund highlighted a few stocks and Atlassian Corporation Plc (NASDAQ:TEAM) is one of them. Here is what the fund said:

“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.”

6. Target Corporation (NYSE:TGT)

Simons' Stake Value: $870.3 million

Percentage of Jim Simons' 13F Portfolio: 1.08%

Number of Hedge Fund Holders: 66

Target Corporation (NYSE:TGT) is a retail corporation that operates large-scale food and merchandise stores. The company has a market capitalization of $116.30 billion and is ranked sixth on the list of the 10 best stocks to buy according to Jim Simons' Renaissance Technologies.

At present, Jim Simons' Renaissance Technologies holds 3.6 million shares of Target Corporation (NYSE:TGT), amounting to $870.3 million in worth. These shares account for 1.08% of the fund’s total investment portfolio. By the end of the second quarter of 2021, 66 hedge funds tracked by Insider Monkey held stakes in Target Corporation (NYSE:TGT) worth around $5.86 billion, compared to 60 hedge funds in the previous quarter with a total stake value of approximately $4.76 billion.

In the second quarter of 2021, Target Corporation (NYSE:TGT) issued its quarterly earnings report, with reported earnings per share at $3.38, beating estimates by $1.73. The company also reported a revenue of $22.98 billion that surpassed estimated revenues by $2.86 billion.

On August 19, DA Davidson analyst Michael Baker raised the firm's price target on Target Corporation (NYSE:TGT) to $285 from $240 and kept a Buy rating on the shares.

Just like Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG), Moderna, Inc. (NASDAQ:MRNA), Microsoft Corporation (NASDAQ:MSFT) and NVIDIA Corporation (NASDAQ:NVDA), Target Corporation (NYSE:TGT) is one of the best stocks in Jim Simons' portfolio.

In the Q2 2021 investor letter of Nelson Capital Management, the fund mentioned Target Corporation (NYSE: TGT). Here is what the fund said:

“We added Target (tkr: TGT) to our consumer staples sector. Target offers a broad array of products in owned and known brand items at affordable prices. Its omnichannel fulfilment centers allow customers to receive their items via in-store pickup, curbside pickup, same-day shipping and regular shipping while simultaneously reducing operating costs. With a significantly lower valuation than peers and a unique operating strategy, Target is an attractive holding.”

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Disclosure. None. 10 Best Stocks to Buy According to Jim Simons' Renaissance Technologies is originally published on Insider Monkey.