We recently published a list of Renaissance Technologies Portfolio: Top 10 Stock Picks. In this article, we are going to take a look at where Exelixis, Inc. (NASDAQ:EXEL) stands against other Renaissance Technologies portfolio’s top stock picks.
The American quant hedge fund Renaissance Technologies is known for using statistical and mathematical tools to drive its investment programs. It was founded in 1982 by Jim Simons, a mathematician who worked as a code breaker for the US National Security Agency during the Cold War. As of December 31, Renaissance Technologies had a portfolio valued at over $67.5 billion.
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Simons was among the pioneers of quantitative investing. He had an estimated net worth of $31.4 billion at the time of his death in May last year, making him the 51st richest person in the world at the time. His use of mathematical models and algorithms to drive long-term investment returns earned him a legacy that rivaled the likes of Warren Buffett and George Soros.
The Renaissance founder stepped down from active hedge fund management in 2010 and resigned as its executive chairman in 2021. The firm is now headed by Peter Brown, who has a strong educational background in mathematics and computer sciences. His father, Henry B.R. Brown invented the Reserve Primary Fund in 1970, the first money market fund to be established.
Brown is committed to using mathematical models to discover and unlock the value of stocks in the market. 2024 was a strong year for Renaissance Technologies. According to a report on Business Insider, the two funds that are open to investors—Renaissance Institutional Equities Fund (RIEF) and Renaissance Institutional Diversified Alpha (RIDA)—delivered double-digit returns of 22.7% and 15.6%, respectively.
Its signature Medallion fund performed even better, with a 30% gain, outperforming the broader market by nearly seven percentage points. Medallion was closed to outside investors in 1993 and has since then only been available to past and current employees, and their families. The fund generated average annual returns of 66% for three decades between 1988 and 2018, resulting in over $100 billion in profits during the period. This earned Medallion the reputation of being one of the most successful investment portfolios of all time.
On February 13, Renaissance Technologies filed a portfolio update, reflecting its holdings for the fourth quarter of 2024. The 13F SEC filings revealed significant changes in the portfolio, including a substantial reduction of stake in a leading technology conglomerate and increased investments in Asia-based artificial intelligence companies during the quarter.
Our Methodology
We scanned Renaissance Technologies’ 13F portfolio, as of December 31, 2024. From there, we picked the top 10 stocks according to their stake value and ranked them in ascending order.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 363.5% since May 2014, beating its benchmark by 208 percentage points (see more details here).
A team of scientists in lab coats surrounded by pharmaceuticals and medical equipment, researching a life-saving oncology-focused biotechnology.
Exelixis, Inc. (NASDAQ:EXEL)
Stake Value as of Q4 2024: $509,352,305
Exelixis, Inc. (NASDAQ:EXEL) is engaged in the development of medicines and regimens for difficult-to-treat cancers. The oncology company is rapidly evolving its product portfolio to target a growing range of tumor types. Some of its key products include CABOMETYX, a drug for advanced renal cell carcinoma (RCC); and COMETRIQ capsules to treat progressive and metastatic medullary thyroid cancer.
The company recently announced the final five-year results from a trial evaluating the combination of CABOMETYX and Opdivo, compared to sunitinib, for previously untreated advanced-stage RCC. The findings demonstrated improved progression-free survival and overall survival, with long-term efficacy seen across subgroups.
On February 11, Exelixis, Inc. (NASDAQ:EXEL) reported strong results for the fourth quarter and full year 2024. Revenue for the quarter was $567 million, while it stood at $2.17 billion for the year, up 18.2% and 18.5%, respectively, from the comparable periods. The growth was driven by increases in sales volume and average net selling price. Non-GAAP net income for 2024 was posted at $593.6 million, more than doubling from last year.
Exelixis, Inc. (NASDAQ:EXEL) also provided an update on the pipeline highlights from the quarter. It is seeing encouraging results from a trial evaluating Zanzalintinib in metastatic colorectal cancer. The company has also initiated a clinical trial to evaluate XL495 in patients with advanced solid tumors.
Positive trial results coupled with robust financial performance have led to a bullish sentiment around the stock. According to Insider Monkey’s database for Q4 2024, 46 hedge funds held a stake in Exelixis, Inc. (NASDAQ:EXEL), improving from 33 at the end of the third quarter. Riverwater Partners Sustainable Value Strategy stated the following regarding the company in its Q4 2024 investor letter:
Exelixis, Inc. (NASDAQ:EXEL) is a commercial-stage oncology company focused on developing therapies for cancer; its blockbuster commercial asset, Cabozantinib, derived ~$2B in global revenues in 2023 and 2024. The company also has a compelling early-stage pipeline. EXEL is not in the business of me-too programs and trying to get FDA results that are just good enough; FDA approval is the starting line, not the finish line. EXEL manages its portfolio of current and prospective drug candidates to drive innovation to improve the standard of care for patients, having found that generating differentiated data that moves the standard of care is what drives value for patients and EXEL over the long-term. The stock trades at a below-the-market multiple and a 25% discount to its five-year average forward valuation.
Exelixis, Inc. (NASDAQ:EXEL) is also one of the top stock picks from the Renaissance Technologies portfolio, with holdings of over $509 million, as of December 31, 2024.
Overall, EXEL ranks 9th on our list of Renaissance Technologies portfolio’s top stock picks. While we acknowledge the potential of software companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than EXEL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.