Highlights from Billionaire Jim Simons’ Renaissance Technologies’ 13F: Apple, Pfizer & More

Renaissance Technologies LLC (RenTech) is a New York-based hedge fund that Jim Simons founded in 1982. RenTech, and especially its Medallion Fund, has been among the most successful funds in the field, and most of its success can be attributed to Simons’ math and code breaking skills. Between 1994 and mid-2014, Medallion averaged 71.8% annual returns. As of October 2015, Renaissance Technologies had roughly $65 billion in assets under management. The firm uses only quantitative investment approaches based on mathematical and statistical analysis. According to its most recent 13F filing, the firm’s highly diversified equity portfolio was worth more than $45.89 billion as of the end of the fourth quarter of 2015.

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Colgate-Palmolive Company (NYSE:CL)

– Shares Owned by Renaissance Technologies as of December 31: 10.06 Million

– Value of Holding as of December 31: $670.39 Million

At the end of the third quarter, Colgate-Palmolive Company (NYSE:CL) was RenTech’s top pick. However, over the fourth quarter, the fund trimmed its exposure by 12%, and the stake fell to the second spot in the list, trailing Novo Nordisk A/S (ADR) (NYSE:NVO). A few weeks ago, Colgate-Palmolive Company (NYSE:CL) reported its fourth-quarter financial results, which included earnings of $0.73 per share, $0.01 above the consensus estimate, on revenue of $3.90 billion, slightly below the Street’s expectations of $3.95 billion. Also reducing its stake in the company, but retaining a large position, was Donald Yacktman’s Yacktman Asset Management, which disclosed ownership of 1.34 million shares, after trimming its exposure by 8% during the fourth quarter.

Apple Inc. (NASDAQ:AAPL)

– Shares Owned by Renaissance Technologies as of December 31: 4.46 Million

– Value of Holding as of December 31: $469.8 Million

Apple Inc. (NASDAQ:AAPL) was the largest new position initiated by Renaissance Technologies between October and December and the stake, which accounts for slightly more than 1% of the fund’s equity portfolio, is the third largest in terms of value. Also quite bullish on the tech giant is Ken Fisher’s Fisher Asset Management, which inched up its stake in Apple by roughly 1% during the fourth quarter to 11.27 million shares. Constantly in the spotlight, Apple Inc. (NASDAQ:AAPL)’s stock has lost 26.1% over the last year, as investors became concerned about the company’s iPhone sales, especially in China, which is one of Apple’s key markets. Nevertheless with a dividend yield of 2.22% and trading at 9.2 times forward earnings, Apple represents one of the best bets in the tech sector, and Renaissance’s new stake confirms this statement.

On the next page we will take a look into Simons’ moves in Pfizer, Palo Alto Networks and Gilead Sciences.

Pfizer Inc. (NYSE:PFE)                            

– Shares Owned by Renaissance Technologies as of December 31: 7.98 Million

– Value of Holding as of December 31: $257.76 Million

The second-largest stake that RenTech initiated during the fourth quarter was in Pfizer Inc. (NYSE:PFE). Once again, Fisher Asset Management had an even larger stake, which contained 32.33 million shares, placed on the company. Back in December, the company declared a 7.1% increase in its dividend, to $0.30 per share. Interestingly, Renaissance initiated a stake in the company amid Pfizer’s announcement that it would acquire Allergan plc (NYSE:AGN). The deal worth around $150 billion is expected to be completed later this year and will create the largest drugmaker in the world. Moreover, since Pfizer plans to relocate its headquarters to Dublin following the transaction, it will pay lower taxes, which has sparked a lot of talks both on Wall Street and in Washington, with the candidates to the upcoming presidential elections pledging to address the issue of inversion deals if elected.

Palo Alto Networks Inc (NYSE:PANW)                 

– Shares Owned by Renaissance Technologies as of December 31: 1.35 Million

– Value of Holding as of December 31: $239.02 Million

Renaissance Technologies more than doubled its exposure to Palo Alto Networks Inc (NYSE:PANW) between October and December, surpassing Columbus Circle Investors, the fund managed by Clifford G. Fox, which trimmed its stake by 19% over the quarter, to 566,662 shares. Since the beginning of the year, Palo Alto Networks’ stock has plunged by nearly 30% amid a broader market sell-off, which hit hard many tech stocks that earlier ranked among the high-fliers. However, the company’s next financial report expected later this month, might correct the trend, since so far Palo Alto has managed to beat the estimates at least five quarters in a row.

Gilead Sciences, Inc. (NASDAQ:GILD)             

– Shares Owned by Renaissance Technologies as of December 31: 2.31 Million

– Value of Holding as of December 31: $234.7 Million

Finally, let’s take a look at Gilead Sciences, Inc. (NASDAQ:GILD), in which Renaissance Technologies increased its stake by 727% during the fourth quarter. Year-to-date the stock is down by around 11%, although it has recently reversed its trend following the release of financial results that managed to beat the revenue and profit estimates. Also betting on Gilead was London-based equity hedge fund Egerton Capital Limited. The firm managed by John Armitage and William Bollinger reduced its exposure to the biopharmaceutical stock by 23% on the quarter to 4.29 million shares held at the end of December.

Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.