In this piece, we will take a look at the 12 biggest healthcare stocks in Jim Simons' stock portfolio. If you want to skip our introduction to the billionaire former hedge fund boss and the healthcare industry, then read Jim Simons Stock Portfolio: 5 Biggest Healthcare Stocks.
Owing to the sheer number of stocks that are listed for public trading and the thousands of transactions that take place on the market daily, mathematics is a fundamental part of today's stock market. Analyzing trends and share behavior enables the prudent investor to decipher underlying trends that can be exploited for trading.
Formally, these trading strategies are dubbed quantitative trading, and they have produced one of the most successful hedge fund bosses of our time, Jim Simons of Renaissance Technologies. His hedge fund is one of the largest in the world, and according to Insider Monkey's research, its investment portfolio was worth a cool $69.3 billion as of Q2 2023 end. While he does not oversee daily operations at Renaissance these days, his journey in the investment world has made Mr. Simons one of the richest people in the world. We took a look at his net worth as part of our coverage of 20 Highest Paid Hedge Fund Managers of All Time to discover that Jim Simons is the third richest hedge fund investor of all time with his investment career yielding him $28.1 billion in fortune.
While the 85 year old Jim Simons doesn't run a hedge fund anymore, as his health would undoubtedly thank him, the decades of experience that he has gained in the finance industry makes him nothing short of a legend. He is also one of the few hedge fund bosses to have a background with the intelligence services, courtesy of Jim Simons' stint with the National Security Agency (NSA) in 1964. He set up Renaissance Technologies in 1982, and six years later, Mr. Simons would set up one of the world's best known investment portfolios, the Medallion Fund. Medallion is a pure play mathematical fund, and its early days sought to leverage mathematical values known as correlations to profit from the stock market. Renaissance Technologies stopped using external capital for the Medallion Fund in 1993, and now, it is available only to existing or former fund employees.
Amassing a $28.1 billion fortune is no easy tasks, and neither is setting up a fund that delivers 39% post fee annualized returns for three decades. So naturally, a deeper look at Renaissance and Jim Simons' secret sauce is merited. Unfortunately, the quantitative black magic behind the firm's success is a closely guarded secret, but we can learn a couple of things about RenTec's business culture based on its hiring decisions. As opposed to most other hedge funds and banks that rely on finance graduates to manage money, Mr. Simons' hedge fund is one of the few in the world that also brings in mathematicians and scientists in its fold. What do they have in common? Well, the sciences depend on a 'scientific approach' towards research and decision making, meaning that the thought process at Renaissance Technologies is based purely on evidence based, mathematical thinking.
Shifting gears to focus on the pharmaceutical industry, these days it is coming off of the highs of the coronavirus pandemic that saw firms such as Pfizer Inc. (NYSE:PFE), Moderna, Inc. (NASDAQ:MRNA), and BioNTech SE (NASDAQ:BNTX). These firms saw their share prices and revenue soar as the world battled against the pandemic, and now, they are looking at the future. For instance, Moderna, widely believed to have made the most potent coronavirus vaccine, is currently re evaluating its manufacturing footprint to adjust to lower post COVID-19 demand. Its third quarter revenue came in at $1.8 billion to mark a sizeable cut down over the year ago quarter's $3.4 billion. During the same period, its product sales dropped by 44% annually, but the firm is making use of its COVID windfall by earmarking a cool $25 billion for research and development between 2024 and 2028.
Commenting on these, the firm's management shared details about some of its research projects as part of its third quarter of 2023 earnings call where it shared:
Today I'll do a quick review of our clinical programs. Many of the details from these programs were shared at our R&D Day in September. I will also review the Phase 3 trial designs for our combination flu and COVID vaccine, mRNA-1083 and the Phase 3 trial design for our INT in non-small cell lung cancer. During R&D Day, we shared the significant progress we've made through the year in advancing our late-stage pipeline, creating the opportunity to have up to 15 product launches in the next five years. Through 2025, and subject to regulatory review and approvals, we anticipate launches for our RSV vaccine, our flu vaccine, a next-generation COVID vaccine, and our combination flu and COVID vaccine.
So, as the healthcare industry adjusts to a brave new world, we decided to see what bets Jim Simons and Renaissance Technologies are making. Some top picks are Gilead Sciences, Inc. (NASDAQ:GILD), Novo Nordisk A/S (NYSE:NVO), and United Therapeutics Corporation (NASDAQ:UTHR).
Jim Simons Stock Portfolio: 12 Biggest Healthcare Stocks
Jim Simons of Renaissance Technologies
Our Methodology
To compile our list of Jim Simons' biggest healthcare stock picks, we used Renaissance Technologies' latest stock portfolio as of June 2023 to weed out its biggest healthcare investments.
Jim Simons Stock Portfolio: 12 Biggest Healthcare Stocks
Renaissance Technologies' Q2 2023 Investment: $161 million
Alkermes plc (NASDAQ:ALKS) is a mid sized healthcare company developing cancer treatments. The firm's shares were in a bit of trouble in October 2023 when test results from a sleep disorder treatment disappointed investors.
For their second quarter of 2023 shareholdings, 44 out of the 910 hedge funds part of Insider Monkey's database had bought the company's shares. Alkermes plc (NASDAQ:ALKS)'s largest hedge fund shareholder is Alex Denner's Sarissa Capital Management as it owns a $439 million stake.
Just like Novo Nordisk A/S (NYSE:NVO), Gilead Sciences, Inc. (NASDAQ:GILD), and United Therapeutics Corporation (NASDAQ:UTHR), Alkermes plc (NASDAQ:ALKS) is a top Jim Simons' healthcare stock pick.
Renaissance Technologies' Q2 2023 Investment: $163 million
Seagen Inc. (NASDAQ:SGEN) is an American biotechnology company that is developing cancer treatments. The firm's third quarter earnings saw its product sales grow by 33% annually, in a respite after it had missed analyst EPS estimates in its previous quarters.
As of Q2 2023 end, 66 out of the 910 hedge funds profiled by Insider Monkey had invested in Seagen Inc. (NASDAQ:SGEN).
Renaissance Technologies' Q2 2023 Investment: $173 million
AbbVie Inc. (NYSE:ABBV) is a large pharmaceutical company that develops treatments for cancer, immune system disorders, and other diseases. The firm is currently facing the heat from the FTC, which has opened an investigation against it for improper patent listings.
During this year's June quarter, 74 out of the 910 hedge funds tracked by Insider Monkey were the firm's investors. Ken Griffin's Citadel Investment Group owns the biggest stake in AbbVie Inc. (NYSE:ABBV) among these which is worth $260 million and comes via 1.9 million shares.
Renaissance Technologies' Q2 2023 Investment: $237 million
Novartis AG (NYSE:NVS) is a Swiss pharmaceutical firm developing treatments for kidney, heart, and other ailments. It is one of the strongest rated stocks on our list, as analysts have rated the shares as Strong Buy on average and set an average share price target of $112.75.
After digging through 910 hedge fund holdings for 2023's second quarter, Insider Monkey discovered that 26 had invested in Novartis AG (NYSE:NVS). Out of these, the firm's largest shareholder is Jim Simons' Renaissance Technologies courtesy of its $237 million investment.
Renaissance Technologies' Q2 2023 Investment: $300 million
Incyte Corporation (NASDAQ:INCY) is mid sized biotechnology company. Its third quarter earnings saw the firm report a 12% annual revenue growth for $919 million in net sales. Incyte Corporation (NASDAQ:INCY) is also gearing up for a strong start to 2024, as a drug listed is slated to target a 30 million strong market.
By the end of 2023's June quarter, 37 hedge funds out of the 910 polled by Insider Monkey had bought the firm's shares. Incyte Corporation (NASDAQ:INCY)'s biggest hedge fund investor is Julian Baker and Felix Baker's Baker Bros. Advisors as it owns 36 million shares that are worth $2.2 billion.
Renaissance Technologies' Q2 2023 Investment: $301 million
Molina Healthcare, Inc. (NYSE:MOH) is an American company that provides healthcare plans. The firm has performed well financially as of late since it has beaten analyst EPS estimates in all four of its latest quarters.
For their second quarter of 2023 shareholdings, 38 hedge funds among the 910 tracked by Insider Monkey were Molina Healthcare, Inc. (NYSE:MOH)'s investors. Henry Ellenbogen's Durable Capital Partners owns the largest stake among these, which is worth $427 million.
Renaissance Technologies' Q2 2023 Investment: $308 million
Pfizer Inc. (NYSE:PFE) is a global pharmaceutical giant. These days the firm is busy cutting costs to balance its income statement, and as part of its strategy, it is laying off or relocating nearly 800 employees that were part of its New Jersey facility.
As of June 2023, 73 out of the 910 hedge funds part of Insider Monkey's database had bought the firm's shares. Pfizer Inc. (NYSE:PFE)'s biggest hedge fund shareholder is Jim Simons' Renaissance Technologies since it owns $308 million worth of shares.
Gilead Sciences, Inc. (NASDAQ:GILD), Pfizer Inc. (NYSE:PFE), Novo Nordisk A/S (NYSE:NVO), and United Therapeutics Corporation (NASDAQ:UTHR) are some healthcare stocks that Jim Simons and Renaissance Technologies have piled into.
