Jim Simons (Trades, Portfolio)' Renaissance Technologies disclosed an equity portfolio valued at $43.89 billion at the end of the second quarter of 2015. The equity portfolio is mainly invested in technology (19%), health care (15) and consumer discretionary (13%) stocks.
The top holding at the end of Q2 was Colgate-Palmolive Co. (CL, Financial).
The fund holds 12.59 million shares in Colgate-Palmolive, down by 2% on the quarter. The value of the stake amounts to $823.6 million. However, the stock gained 5.53% in that period.
Strong Growth Potential
The firm has an extensive geographic reach. International sales represent an important part of total sales and growth in emerging markets is possible. The company entered Mexico 90 years ago and 75 years ago in countries such as India and Brazil. Moreover, other countries such as China, Russia, India, and Nigeria are promising areas for healthy growth in the future. Why? The answer is simple: They are the most populated countries and we believe the consumption will grow in the long term.
The current price per share stands at $62.18, which is located halfway between the two 52-week extremes. Regarding its valuation metrics, the stock is overvalued. In terms of valuation, the stock sells at a trailing P/E of 25.35x, trading at a premium compared to a median of 20.0x for the industry. The ratio is close to two-year low of 23.97x. To use another metric, its price-to-book ratio of 126.7x is close to 10-year high, and the price-to-sales ratio of 3.47x is close to 10-year high of 3.79.
Debt Position
The company has increased its long-term debt in the last five years. A future scenario of greater interest rates would decrease profitability. This was not the case for the dividends, which showed a low increase due to negative currency effects that are putting pressure on margins. Revenue decreased by 6.57% to $4.07 billion in the second quarter. The gross profit margin was quite stable at 58.2%, and the operating margin increased to 22.9% from 22.5%.
The trailing-twelve-month dividend yield stands at 2.37%, which is ranked higher than 57% of the 1,654 companies in the Global Household & Personal Products industry.
Other Hedge Funds
The second largest shareholder of the company continues to be Jean-Marie Eveillard, with 4.81 million shares, valued at $314.8 billion, held as of the end of the Q2 2015.
Disclosure: As of this writing, Omar Venerio did not hold a position in any of the aforementioned stocks
