In 1982, Jim Simons took his NSA-caliber code cracking abilities and put them to work at a hedge fund.
"When I started doing trading, I had gotten a little tired of mathematics," he said a TED interview in September 2015. "I was in my late 30s, I had a little money. I started trading and it went very well. I made quite a lot of money with pure luck. I mean, I think it was pure luck. It certainly wasn't mathematical modeling. But in looking at the data, after a while I realized: it looks like there's some structure here."
Simons opened the doors of Renaissance Technologies in 1982 and has built into one of the most successful, complex hedge fund firms in the world. Using computer modeling and hiring experts in highly-technical fields like mathematics, astronomy and physics, Renaissance averaged 71.8% in annual returns, before fees, from 1994 through mid-2014. Its Medallion Fund is considered to be one of the most lucrative in the world.
Simons retired from Renaissance in 2009 and has a personal fortune estimated by Forbes to be $15.5 billion.
Tracking Renaissance Technologies' investments is easier said than done, given that the firm literally invests in thousands of holdings at a time. Its most recent 13F filing, corresponding to Dec. 31, 2015, lists more than 3000 positions, upwards of 500 of which are new.
Here is a closer look at 10 of Renaissance Technologies' biggest new buys of the fourth quarter.
Apple
Renaissance acquired 4.5 million shares of Apple (AAPL - Get Report) during the fourth quarter. The stake is valued at $469.8 million as of the end of the period.
Of 31 analysts covering the stock, 21 rate it as a strong buy, three as a moderate buy and seven as a hold. TheStreet Ratings gives it a B.
Apple is a holding in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. He said of the stock on Friday:
"[W]e found this week's launch of Apple Pay in China to be an extremely important development for the company's business and ecosystem moving forward. The launch was met with a strong reception from consumers (100,000 people signed up in the first hour), banks and merchants, which bodes very well for the service in the future. Apple owns roughly 14% of the smartphone market (equating to about 150 million users) -- therefore, penetrating two-thirds of this market would translate to 100 million users in total for the region (that's almost a third of the U.S. population!). Apple has already partnered with about a dozen of the region's most prominent banks, and many smaller, regional banks are scrambling to sign up as the buzz around the service is spreading like wildfire. Importantly, the launch made Apple the first foreign company to offer domestic electronic payment services in China -- something that major payment providers have been trying to accomplish for years. In China, Apple Pay will mostly be competing with Alipay, which is Alibaba's (BABA) version of the service. The move is all part of the company's growing service business, which we believe is undervalued by the market and will ultimately help move Apple away from the 'one-trick pony' perception. We reiterate our long-term price target of $140."
Exclusive Look Inside:
You see Jim Cramer on TV. Now, see where he invests his money and why Apple is a core holding of his multi-million dollar portfolio.
You see Jim Cramer on TV. Now, see where he invests his money and why Apple is a core holding of his multi-million dollar portfolio.
Want to be alerted before Jim Cramer buys or sells AAPL? Learn more now.
Pfizer
Pfizer (PFE - Get Report) is another of Renaissance's new buys. The fund ended the quarter with 8.0 million shares valued at $257.8 million.
Pfizer, a biopharmaceutical company, discovers, develops, manufactures and sells healthcare products worldwide. It has a market cap of $182 billion and a dividend yield of 4.10%. It trades at a P/E of 13.40.
Of 10 analysts covering the stock, seven rate it as a strong buy and three as a hold. TheStreet Ratings gives it a B.
Facebook
As of Dec. 31, Renaissance Technologies holds 1.8 million shares of Facebook (FB - Get Report) -- a position at the time valued at $187.6 million.
Of 28 analysts covering the stock, 23 rate it as a strong buy, four as a moderate buy and one as a hold. TheStreet Ratings gives it an A-.
Facebook is a holding in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. He recently said of the stock:
"According to TechCrunch, Facebook is expecting to launch advertisements within its Messenger App beginning next quarter. We have long touted the company's growing ecosystem -- which includes Instagram, Oculus, WhatsApp and Messenger -- and the optionality these services provide Facebook moving forward. While Instagram has already begun its monetization process, management is still tinkering with the others to ensure all moves are carefully measured. With this recent news, marketers will soon be able to send advertisements as messages to users who have previously initiated a chat with that company through Messenger. The new capability will build upon the engaging experience that Messenger developed for its users. The company has worked hard on developing Messenger's features, adding the ability to send money to friends, make voice calls and book car rides, all on top of the core peer-to-peer messaging functionality. Messenger's now 800+ million monthly active users will easily attract advertising dollars and build upon Facebook's dominant leadership position in social. The company and its growing ecosystem of services and apps will continue to make it a top destination for marketers moving forward. We reiterate our $130 long-term target."
Exclusive Look Inside:
You see Jim Cramer on TV. Now, see where he invests his money and why Facebook is a core holding of his multi-million dollar portfolio.
You see Jim Cramer on TV. Now, see where he invests his money and why Facebook is a core holding of his multi-million dollar portfolio.
Want to be alerted before Jim Cramer buys or sells FB? Learn more now.
Comcast
Renaissance picked up a stake in Comcast (CMCSA) . As per its most recent 13F filing, it holds 3.2 million shares worth $179.0 million.
Comcast operates as a media and technology company worldwide. It operates through Cable Communications, Cable Networks, Broadcast Television, Filmed Entertainment and Theme Parks segments. It has a $142.2 billion market cap and 1.9% dividend yield. The stock trades at a P/E of 17.56.
Of 22 analysts covering the stock, 17 rate it as a strong buy, two as a moderate buy and three as a hold. TheStreet Ratings gives it an A-.
LivaNova
LivaNova (LIVN) is Renaissance Technologies' No. 5 new buy of last quarter. It reported holding 2.2 million shares worth $128.3 million.
LivaNova, a medical technology company, offers cardiac surgery, cardiac rhythm management and neuromodulation related products worldwide. Its cardiac surgery related products comprise heart-lung machines, oxygenators and mechanical and tissue valves. It has a $2.9 billion market cap.
Of six analysts covering the stock, three rate it as a strong buy and three as a hold. TheStreet Ratings gives it a C.
Accenture PLC
Renaissance has a $124.7 million stake in Accenture PLC (ACN) as of Dec. 31. Last quarter, it acquired 1.2 million of the company's shares.
Accenture provides management consulting, technology and outsourcing services worldwide. It has a $64.4 billion market cap and 2.2% dividend yield. The stock trades at a P/E of 20.83.
Of 15 analysts covering the stock, eight rate it as a strong buy, one a moderate buy and six a hold. TheStreet Ratings gives it an A.
eBay
eBay (EBAY) is another new stake for Renaissance Technologies. The fund acquired 4 million shares during the fourth quarter, building a stake worth $109.3 million as of the end of the period.
eBay is a global technology company that has created an open source platform that provides software developers and merchants access to its applications programming interfaces to develop software and solutions for commerce. eBay has a $28.1 billion market cap, and its stock trades at a P/E of 12.82.
Of 26 analysts covering the stock, seven rate it as a strong buy, 18 as a hold and one as a moderate sell.
Exxon Mobil
Renaissance Technologies dove into oil giant Exxon Mobil (XOM - Get Report) last quarter, acquiring 1.3 million shares worth $102.7 million.
Exxon Mobil engages in refining and marketing crude oil and natural gas in the U.S., Canada/South America, Europe, Africa, Asia and Australia/Oceania. It has a $343.4 billion market cap and 3.5% dividend yield. Exxon trades at a P/E of 21.43.
Of 14 analysts covering the stock, four rate it as a strong buy, two a moderate buy, six a hold and two a strong sell. TheStreet Ratings gives it a C.
Tyson Foods
Renaissance picked up 1.7 million shares of Tyson Foods (TSN) last quarter, building a stake valued at $92.6 million as of the end of the period.
Tyson Foods, together with its subsidiaries, operates as a food company worldwide through four segments: chicken, beef, pork and prepared foods. It has a market cap of $22.9 billion and a 1% dividend yield. It trades at a P/E of 18.74.
Of five analysts covering the stock, three rate it as a strong buy and two as a hold. TheStreet Ratings gives the stock an A+.
Phillips 66
Renaissance Technologies bought up stock of Phillips 66 (PSX) during the last few months of the year. As of Dec. 31, it holds 1.2 million shares worth $95.9 million.
Phillips 66 operates as an energy manufacturing and logistics company operating through four segments: midstream, chemicals, refining, and marketing and specialties. It has a $42.7 billion market cap and dividend yield of 2.8%. The stock trades at a P/E of 10.36.
Of nine analysts covering the stock, five rate it as a strong buy, one a moderate buy and three a hold. TheStreet Ratings gives it a B.
By Emily Stewart
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