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Renaissance Technologies, the quantitative hedge fund firm founded by Jim Simons in 1982, dumped several top-name stocks during the third quarter. As Insider Monkey reported on Wednesday, the firm might be seeing “many of the top large-cap stocks as overvalued.”
Apple (NASDAQ:AAPL) is longer Renaissance Technologies top holding. In the last quarter, the firm decreased its its stake in Apple by 60 percent from 968,000 shares to 372,000. As shares in the company have risen 45 percent this year to date, Renaissance may believe that Apple has peaked, at least for now. Insider Monkey certainly thinks this is the case, writing “We believe that RenTech sees Apple shares as having reached a near-term top with sales of its iPad mini and iPhone 5 already heavily baked into the stock.” Furthermore, analysts project that sales growth will slow 45 percent in 2012, 25 percent in 2013, and 15 percent in 2014.
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Renaissance also reduced its stake in McDonalds (NYSE:MCD) by 20 percent, as the firm’s 13F filing with the Securities and Exchange commission shows, mostly likely because of the slowing growth in Asia. However, Insider Monkey did note that the stock is “cheap buy” with its price-to-earnings ratio at 16x, compared to Yum Brands (NYSE:YUM), which trades at 21x.
At the end of the second quarter, Renaissance sold over 50 percent of its shares in Wal-Mart (NYSE:WMT), reducing its stake to 1.7 million shares, and over 99 percent of its shares in Johnson & Johnson (NYSE:JNJ). The pharmaceutical company, of which Renaissance now owns 46,000 shares, trades at 23x earnings, above major competitors Pfizer (NYSE:PFE) and Merck (NYSE:MRK), both of which trade around 19x.
Based on concerns for Google’s (NASDAQ:GOOG) slowing revenue growth and Motorola’s negative impact on earnings, Renaissance sold 70 percent of its stake at the end of the second quarter, reducing its shares from 349,000 to 95,000 shares.
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