Renaissance Technologies Bullish on PepsiCo (PEP) and Gold Heading Into Q2

RenTech Sees More Fizz Left in Pepsi

Like many other elite hedge funds, Renaissance Technologies boosted its investment in PepsiCo, Inc. (NYSE:PEP) during the first quarter and had amassed 3.73 million shares by the end of March, more than double what it owned at the end of 2015. The stock hit its all-time high of $106.94 on May 11 and has entered a slight correction since. PepsiCo, Inc. (NYSE:PEP) shares are currently trading at a trailing P/E ratio of 29 and at a forward P/E ratio of 20, based on analysts’ projected earnings, which shows that analysts expect the company to flex its financial muscle within the next 18 months. Analysts at Jefferies Group and Deutsche Bank have recently reiterated their ‘Buy’ ratings on Pepsi, and have price targets of $119 and $115 per share on the stock, respectively. Billionaire Ken Fisher increased his fund’s investment in PepsiCo, Inc. (NYSE:PEP) by 1% to 5.36 million shares worth $556 million at the end of the first quarter.

Still Betting on Novo Nordisk

RenTech decided to trim its holding of Novo Nordisk A/S (ADR) (NYSE:NVO), a Danish pharmaceutical giant. At the end of the first quarter, the fund held 12.8 million shares, down by less than 1% from the end of the fourth quarter and valued at $692 million on March 31. Peter Rathjens, Bruce Clarke and John Campbell’s fund, Arrowstreet Capital, joined the party as well, having initiated a new Novo Nordisk position in the first quarter that amounted to 2.86 million shares. For the first quarter, Novo Nordisk A/S (ADR) (NYSE:NVO) posted better-than-expected financial results and reiterated its forward guidance. The company reported registering a profit of $0.55 per American Depository Receipt (ADR), while revenue rose by 5.5% year-over-year to $4 billion. Analysts in turn were expecting $0.53 per ADR on the back of $4.1 billion in revenue. Since the start of the year, Novo Nordisk A/S (ADR) (NYSE:NVO) shares had fallen by as much as 20% before regaining some of the lost ground and settling into a trading range around the $55 level.

New Top Dog

Novo Nordisk’s poor performance means Renaissance Technologies has a new top dog in its portfolio in Colgate-Palmolive Company (NYSE:CL). Worth $698 million, the fund’s stake in the company amounts to 9.88 million shares as of March 31, which was down by 2% over the first quarter. Goldman Sachs recently upgraded Colgate-Palmolive Company (NYSE:CL) to a ‘Neutral’ rating from its previous ‘Sell’ rating and raised its price target on the stock to $75.00, suggesting modest upside potential of about 7%. Apart from a couple of blips, the stock has been on a strong uptrend since January and currently boasts an 8.3% advance for the year. John Overdeck and David Siegel’s Two Sigma Advisors holds 2.15 million shares of Colgate-Palmolive Company (NYSE:CL) valued at $152 million on March 31.

Disclosure: None