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 Novo Nordisk A/S (NYSE:NVO) 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
An elderly couple receiving insulin from a pharmacist, representing healthcare company’s successful pharmaceutical products.
Novo Nordisk A/S (NYSE:NVO)
Stake Value as of Q4 2024: $715,083,916
Novo Nordisk A/S (NYSE:NVO) is a global healthcare company, headquartered in Bagsværd near Copenhagen, Denmark. It specializes in the treatment of obesity, diabetes, and other rare diseases. The company markets its products in over 180 countries. Its medicines, most notably Ozempic, Rybelsus, and Wegovy have helped improve the lives of diabetes and obesity patients worldwide.
On February 5, the company announced financial results for fiscal 2024. Operating profit increased 25% year-over-year to DKK 128.3 billion. Sales from North American operations grew 30%, while international operations sales were up 17% from last year. Sales within Diabetes and Obesity care increased by 26% during the year.
However, the company is going through a challenging period. Novo Nordisk A/S (NYSE:NVO)’s share price has dropped by 38% over the past six months, amid mixed trial results and regulatory pressures. The Centers for Medicare & Medicaid Services (CMS) recently announced including Ozempic and Wegovy in its list of drugs for price negotiations, which sent shockwaves in the industry and led to a further dip in the company’s share price.
On the positive side, Novo Nordisk A/S (NYSE:NVO) made headlines last month after it revealed encouraging results from a trial for Semaglutide 7.2 mg, demonstrating superior weight loss compared to placebo. The results reflect the company’s commitment to introducing innovative treatments, especially for chronic disease management.
Wall Street analysts remain bullish on the stock, with a consensus Strong Buy rating and an average share price upside potential of 69%. Investor sentiment also remains strong. According to Insider Monkey, 64 hedge funds held a stake in the company at the end of the fourth quarter of 2024, an improvement from 61 at the end of the third quarter.
Novo Nordisk A/S (NYSE:NVO) is one of the top stock picks from the Renaissance Technologies portfolio, with the hedge fund having investments of over $715 million in the company.
Overall, NVO ranks 3rd on our list of Renaissance Technologies portfolio’s top stock picks. While we acknowledge the potential of NVO, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NVO 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.