Jim Simons Buys Time Warner, Research In Motion, JC Penney, CME and Schlumberger
Simons runs an investment management company unusual from its peers. He relies on mathematical and statistical methods to make trades, which are often automated. A former mathematician at Harvard and MIT, Simons eschews Wall Street and mainly hires mathematicians, physicists, astronomers and computer scientists. The firm has $15 billion in assets under management and has achieved a 30 percent return since inception.
Simons bought 3,060,134 shares of Time Warner Inc. (TWX) at an average price of $37 per share. Over the last five years, the stock has declined 44.6 percent.
Time Warner Inc. is the world's media and entertainment company, whose businesses include filmed entertainment, interactive services, television networks, cable systems, publishing and music. Time Warner Inc. has a market cap of $34.61 billion; its shares were traded at around $35.57 with a P/E ratio of 11.9 and P/S ratio of 1.2. The dividend yield of Time Warner Inc. stocks is 2.9%.
The company reported its first quarter earnings on May 2, 2012. Its revenues grew 4% from the previous year to $7 billion on growth in its Film and TV Entertainment Networks segments. Earnings per share rose 16% to $0.67. The company also authorized an additional $4 billion in stock repurchases and repurchased approximately 24 million shares for approximately $889 million.
Simons’ second-largest new buy was Research In Motion (RIMM). He bought 7,293,357 shares at an average price of $15. RIMM, the maker of the once-ubiquitous Blackberry smartphone device, has seen its share price plunge almost 77% in the last five years.
Research In Motion has a market cap of $6.19 billion; its shares were traded at around $11.8 with a P/E ratio of 2.8 and P/S ratio of 0.3. Research In Motion had an annual average earnings growth of 28.5% over the past 5 years.
In the last 12 months, RIMM’s revenue declined 7.5%, EBITDA declined 52.4% and free cash flow declined 32.3%, as other smartphone makers such as Apple and Google crowded RIMM’s market share.
Simons bought 2,306,300 shares of J.C. Penney Inc. (JCP) at an average price of $38. JC Penney’s stock has declined almost 15% over the last year after a strong increase in January.
J.C. Penney operates department stores throughout the United States and Puerto Rico, as well as one of the largest apparel and home furnishing sites on the Internet, J.C. Penney has a market cap of $7.49 billion; its shares were traded at around $32.62 with a P/E ratio of 46.4 and P/S ratio of 0.4. The dividend yield of J.C. Penney stocks is 2.3%. J.C. Penney had an annual average earnings growth of 13.5% over the past 10 years.
For the fourth quarter of 2011, the company reported a net loss of $87 million, which included restructuring and management transition charges and the financial impact of implementing its new “simplified” pricing and promotion strategy. The new strategy, rolled out on February 1, places all prices under three categories — Everyday, regular prices, Month-long Values, and Best Prices, which happen twice a month and organizes sales and promotions to fall on regular dates. The changes are part of management’s larger plan to completely reorganize the entire company.
Simons bought 261,119 shares of CME Group Inc. (CME) at an average price of $270. In the last year CME stock has declined 11.6%, including a dramatic increase in January.
Chicago Mercantile Exchange Holdings is the parent company of Chicago Mercantile Exchange Inc., the largest futures exchange in the U.S. based on notional value, trading volume and open interest. CME Group Inc. has a market cap of $17.47 billion; its shares were traded at around $259.88 with a P/E ratio of 15.8 and P/S ratio of 5.3. The dividend yield of CME Group Inc stocks is 3.4%. CME Group Inc. had an annual average earnings growth of 17.9% over the past 10 years. GuruFocus rated CME Group Inc. the business predictability rank of 3.5-star.
On April 26, CME reported its first-quarter financial results. Revenues declined to $774.6 million compared to $831.6 million the previous year, as global trading volumes were impacted by low levels of volatility, particularly in financial instruments. First-quarter average daily volume was 12.3 million contracts, down 11 percent from the previous year. The company’s net income declined to $266.3 million, compared to $457.1 million.
Simons bought 1,022,893 shares of Schlumberg Ltd. (SLB) at an average price of $75. The company’s stock has declined 19% over the last year.
Schlumberger Limited is a global technology services company consisting of two business segments, Schlumberger Oilfield Services and SchlumbergerSema. Schlumberger Lt has a market cap of $91.82 billion; its shares were traded at around $66.58 with a P/E ratio of 17.5 and P/S ratio of 2.3. The dividend yield of Schlumberger Ltd stocks is 1.6%. Schlumberger Ltd had an annual average earnings growth of 1.9% over the past five years.
Schlumberger announced first quarter 2012 results on April 20. Its revenue was $10.6 billion, compared to $8.7 billion the previous year, as a result of the normal seasonal slowdown in sales. Net income, excluding charges and credits, was $1.31 billion, a 35 percent year-over-year increase.
See more of Jim Simons’ latest buys and sells in his equity portfolio here.