In this article, we discuss the 5 best stocks to buy now according to quant billionaire Jim Simons’ Fund. If you want to read our detailed analysis of these stocks, go directly to the 10 Best Stocks to Buy Now According to Quant Billionaire Jim Simons’ Fund.
5. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 250
Microsoft Corporation (NASDAQ:MSFT) is a diversified technology company with core interests in the software business. Regulatory filings show that Renaissance Technologies owned 2.9 million shares in Microsoft Corporation (NASDAQ:MSFT) at the end of the third quarter of 2021 worth over $835 million, representing 1.07% of the portfolio.
Wells Fargo analyst Michael Turrin recently initiated coverage of Microsoft Corporation (NASDAQ:MSFT) stock with an Overweight rating and a price target of $400, highlighting that the firm had a “bright future ahead”.
At the end of the third quarter of 2021, 250 hedge funds in the database of Insider Monkey held stakes worth $6.5 billion in Microsoft Corporation (NASDAQ:MSFT), up from 238 in the preceding quarter worth $6.2 billion.
In its Q1 2021 investor letter, Polen Capital, an investment management firm, highlighted a few stocks and Microsoft Corporation (NASDAQ:MSFT) was one of them. Here is what the fund said:
“We have written extensively about Microsoft in recent commentaries. It was our leading contributor last year and one of our largest weightings within the Portfolio. It continues to experience business momentum through several dominant, essential, and competitively advantaged businesses, like Office 365 and Azure. The markets it competes for are enormous, which gives the company the ability to compound at scale. In the past quarter alone, the company generated over $40 billion in revenue, representing a 17% growth rate. The inherent operating leverage in Microsoft’s business model continues and led to 34% earnings growth this past quarter. Despite the broad rotation we saw in the first quarter and Microsoft’s robust performance in 2020, we think its business fundamentals continue to exhibit strength, and the stock continues to reflect the fundamentals.”
4. Zoom Video Communications, Inc. (NASDAQ:ZM)
Number of Hedge Fund Holders: 56
Zoom Video Communications, Inc. (NASDAQ:ZM) owns and runs a video communications platform. According to the latest data, Renaissance Technologies owned 3.2 million shares in Zoom Video Communications, Inc. (NASDAQ:ZM) at the end of September 2021 worth $840 million, representing 1.08% of the portfolio.
Zoom Video Communications, Inc. (NASDAQ:ZM) recently made a direct investment in Genesys Cloud Services, a call center software firm that is valued at over $21 billion and raised $580 million at a funding round earlier this month.
Among the hedge funds being tracked by Insider Monkey, New York-based firm Tiger Global Management LLC is a leading shareholder in Zoom Video Communications, Inc. (NASDAQ:ZM) with 4.7 million shares worth more than $1.2 billion.
In its Q1 2021 investor letter, Artisan Partners, an asset management firm, highlighted a few stocks and Zoom Video Communications, Inc. (NASDAQ:ZM) was one of them. Here is what the fund said:
“We concluded our campaigns in Zoom Video Communications. We have been paring our position in Zoom for several quarters, anticipating the reduced need for video conferencing as vaccination rates climb and people return to their workplaces. That said, we believe there is a strong case to be made that the pandemic has prompted a permanent inflection in videoconferencing’s importance—sustainably higher remote work arrangements, more online learning and less business travel. Furthermore, the company’s dramatically expanded user base (up 485% YoY in Q3) positions it well to cross sell additional services, Zoom Phone in particular. The long-term future remains bright, but we decided to end our successful investment campaign in favor of opportunities in our pipeline with more attractive near-term growth prospects.”
3. VeriSign, Inc. (NASDAQ:VRSN)
Number of Hedge Fund Holders: 40
VeriSign, Inc. (NASDAQ:VRSN) provides internet services and infrastructure. Securities filings show that Renaissance Technologies owned 4.6 million shares in VeriSign, Inc. (NASDAQ:VRSN) at the end of the third quarter of 2021 worth $947 million, representing 1.22% of the portfolio.
VeriSign, Inc. (NASDAQ:VRSN) stock has returned more than 17% to investors over the past twelve months. The company recently beat market estimates on earnings per share and revenue for the third quarter by $0.03 and $2 million respectively.
At the end of the third quarter of 2021, 40 hedge funds in the database of Insider Monkey held stakes worth $5.3 billion in VeriSign, Inc. (NASDAQ:VRSN), down from 41 in the preceding quarter worth $6.1 billion.
2. Atlassian Corporation Plc (NASDAQ:TEAM)
Number of Hedge Fund Holders: 60
Atlassian Corporation Plc (NASDAQ:TEAM) is an application software firm. Renaissance Technologies owned 3.1 million shares in Atlassian Corporation Plc (NASDAQ:TEAM) at the end of September 2021 worth $1.2 billion, representing 1.60% of the portfolio.
Atlassian Corporation Plc (NASDAQ:TEAM) posted earnings for the first fiscal quarter in late October, reporting earnings per share of $0.46, beating predictions by $0.06. The revenue over the period was $614 million, up 33% year-on-year.
At the end of the third quarter of 2021, 60 hedge funds in the database of Insider Monkey held stakes worth $6 billion in Atlassian Corporation Plc (NASDAQ:TEAM), down from 64 the preceding quarter worth $4 billion.
Here is what Baron Opportunity Fund has to say about Atlassian Corporation Plc (NASDAQ:TEAM) in its Q2 2021 investor letter:
“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.”
1. Novo Nordisk A/S (NYSE:NVO)
Number of Hedge Fund Holders: 27
Novo Nordisk A/S (NYSE:NVO) is a healthcare firm based in Denmark. Latest securities filings reveal that Renaissance Technologies owned 21 million shares in Novo Nordisk A/S (NYSE:NVO) at the end of the third quarter of 2021 worth $2 billion.
On November 18, Novo Nordisk A/S (NYSE:NVO) announced that it had agreed to purchase Dicerna Pharmaceuticals in a deal worth $3 billion. The acquisition will help the former advance previous collaborations with the latter into clinical studies through 2022.
At the end of the third quarter of 2021, 27 hedge funds in the database of Insider Monkey held stakes worth $4 billion in Novo Nordisk A/S (NYSE:NVO), up from 20 in the previous quarter worth $3 billion.
In its Q3 2021 investor letter, LRT Capital Management highlighted a few stocks and Novo Nordisk A/S (NYSE:NVO) was one of them. Here is what the fund said:
“Novo Nordisk is the global leader in insulin, which is, sadly, a growing business as more and more people around the world suffer from diabetes. millions of people need daily injections of insulin to stay alive54, a number that, unfortunately, is likely to continue to grow by millions more in the coming decade. It may seem at first glance that insulin should be a commoditized business, after all, it was discovered and synthesized over a hundred years ago, but nothing could be further from the truth. There are many types of insulin and Novo Nordisk has spent billions on R&D over the years to develop new products. On February 11th, the company reported favorable results from a phase-3 trial of Semaglutide, a drug that is currently used for Type 2 diabetes treatment. The study evaluated the use of Semaglutide for weight loss treatment in non-diabetic patients and found a significant impact on weight loss for patients receiving Semaglutide vs. the placebo control group. If Semaglutide is approved for weight loss treatment, we expect it will be meaningfully accretive to the company’s bottom line.
The company’s proprietary product line supports returns on invested capital of over 40%, and while sales growth is relatively slow (+6% annualized CAGR over the past decade), the company’s shares trade at a reasonable valuation of only 22x forward earnings. For a company with an extremely predictable business, high returns on capital, and an easily forecastable future, we believe this to be highly attractive.”
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