In this article, we reviewed Jim Simons’ investment strategy, historical performance, and family office portfolio. We also examined 10 pharmaceutical stocks to buy according to Jim Simons’ Euclidean Capital. You can skip our detailed discussion and jump directly to the 5 Pharmaceutical Stocks to Buy According to Jim Simons’ Euclidean Capital.
Known as “Quant King”, billionaire Jim Simons is the founder of Renaissance Technologies, a hedge fund that uses mathematical models to pick stocks rather than relying on human intuitions. Wall Street calls him the greatest investor in the world amid stunning returns from his flagship Medallion Fund, which earned more than $100 billion in profits since its inception in 1988. In 2020, the fund posted an annual return of 76%, its third-best performance, just behind its 98.5% return in 2000 and 82.4% gain in 2008. The American mathematician, who was born in a poor family and worked in a garden supply store in his mid-teens, is now sitting on a net worth of $24.4 billion. He retired from Renaissance Technologies in 2010 but remains a non-executive chairman of the $130 billion quant hedge fund.
He established Euclidean Capital, a single-family office, in 2009 to invest in early-stage pharmaceutical companies and disruptive technologies. As of the end of the June quarter, Jim Simons’ Euclidean Capital held $427 million in 13F securities, and over 95% of the portfolio is composed of early-stage pharmaceutical stocks.
Jim Simons of Renaissance Technologies
Why pay attention to hedge fund sentiment while choosing 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 S&P 500 ETF (SPY). Our stock picks outperformed the market by more than 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.
Let’s start examining the 10 pharmaceutical stocks to buy according to Jim Simons’ Euclidean Capital. For this article, we analyzed Euclidean Capital’s 13F portfolio as of the end of the second quarter.
10 Pharmaceutical Stocks to Buy According to Jim Simons’ Euclidean Capital
10. Beam Therapeutics Inc. (NASDAQ:BEAM)
Euclidean Capital’s Stake Value: $4.007 million
Percentage of Euclidean Capital’s 13F Portfolio: 0.93%
Number of Hedge Fund Holders: 21
Biotechnology company Beam Therapeutics Inc. (NASDAQ:BEAM) generated a staggering 160% share price return for its shareholders since debuting on NASDAQ in June of 2020. Beam Therapeutics Inc. (NASDAQ:BEAM) is a member of Euclidean Capital since the first quarter of 2021.
Catherine D. Wood’s ARK Investment Management was the largest shareholder in the company, with 9.9% ownership, as of the end of June quarter. Redmile Group and Hillhouse Capital Management were the second and third largest stakeholders in Beam Therapeutics Inc. (NASDAQ:BEAM).
9. Nurix Therapeutics, Inc. (NASDAQ:NRIX)
Euclidean Capital’s Stake Value: $4.097 million
Percentage of Euclidean Capital’s 13F Portfolio: 0.95%
Number of Hedge Fund Holders: 17
Shares of the small-cap Nurix Therapeutics, Inc. (NASDAQ:NRIX) remained under pressure in the past couple of months amid broader market trends. Nurix Therapeutics, Inc. (NASDAQ:NRIX) revenues grew 67% year over year in the June quarter and the company is on track for three more phase 1 clinical trials in 2021.
Like 23andMe Holding Co. (NASDAQ:ME), Jim Simons’ Euclidean Capital initiated a brand new position in Nurix Therapeutics, Inc. (NASDAQ:NRIX) during the June quarter.
8. Foghorn Therapeutics Inc. (NASDAQ:FHTX)
Euclidean Capital’s Stake Value: $13.4 million
Percentage of Euclidean Capital’s 13F Portfolio: 3.14%
Number of Hedge Fund Holders: 5
Euclidean Capital first initiated a position in Foghorn Therapeutics Inc. (NASDAQ:FHTX) in the fourth quarter of 2021 and left its position unchanged during the second quarter of 2021. Following strong gains early in 2021, shares of Foghorn Therapeutics Inc. (NASDAQ:FHTX) are now trading in the low teen range. Foghorn Therapeutics Inc. (NASDAQ:FHTX) ended the June quarter with $141.3 million in cash, cash equivalents, and marketable securities, down from $160.9 million as of March 31, 2021.
Jim Simons was the leading stakeholder in Foghorn Therapeutics Inc. (NASDAQ:FHTX) at the end of June. Of the 873 elite funds tracked by Insider Monkey, 5 were bullish on the small-cap biotechnology company compared to 8 positions in the previous quarter.
7. ORIC Pharmaceuticals, Inc. (NASDAQ:ORIC)
Euclidean Capital’s Stake Value: $17.6 million
Percentage of Euclidean Capital’s 13F Portfolio: 4.12%
Number of Hedge Fund Holders: 11
ORIC Pharmaceuticals, Inc. (NASDAQ:ORIC) stock price lost almost half of its value since the beginning of this year. However, shares of the company recovered after a positive note from Jefferies analyst Maury Raycroft, who maintained a Buy rating for ORIC Pharmaceuticals, Inc. (NASDAQ:ORIC) stock with a $34 price target. The analyst sees strong prospects for ORIC-101 to win approval.
6. Alector, Inc. (NASDAQ:ALEC)
Euclidean Capital’s Stake Value: $20.43 million
Percentage of Euclidean Capital’s 13F Portfolio: 4.77%
Number of Hedge Fund Holders: 18
Alector, Inc. (NASDAQ:ALEC) is one of the top pharmaceutical stocks to buy due to its stellar run of 126% over the past 12 months, driven by encouraging data from its leading AL001 open-label Phase 2 study in FTD-GRN. Moreover, the announcement about global collaboration with GSK for the development and commercialization of progranulin-elevating monoclonal antibodies, AL001 and AL101, also added to investors’ sentiments.
Euclidean Capital has been holding a position in Alector, Inc. (NASDAQ:ALEC) since the fourth quarter of 2020. Other hedge funds have also expressed interest in the company. The number of long hedge funds positions increased to 18 as of the end of the second quarter of 2021 compared to 15 positions in the earlier quarter.
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Disclosure: None. 10 Pharmaceutical Stocks to Buy According to Jim Simons’ Euclidean Capital is originally published on Insider Monkey.
