Simons shuns the limelight and rarely gives interviews, citing Benjamin the Donkey in Animal Farm for explanation: "God gave me a tail to keep off the flies. But I'd rather have had no tail and no flies." On October 10, 2009, Simons announced he would retire on January 1, 2010 but remain at Renaissance as nonexecutive chairman. Does this mean he isn't involved in the stock trading activities? We really don't care, since the system he's created is what Renaissance Technologies still uses to buy and sell issues is.
Jim Simons has been touted as the best trader on the planet and has been quoted stating; "The advantage scientists bring into the game is less their mathematical or computational skills than their ability to think scientifically. They are less likely to accept an apparent winning strategy that might be a mere statistical fluke."
For more details on Jim Simons’, go to http://www.gurufocus.com/StockBuy.php?GuruName=Jim+Simons
In this article we would like to highlight some of Jim's best holdings based on their earnings yield and current price in the market. The reason these are very important is the same reason earning high returns on equity and investment capital is important. Jim Simons owns 3023 stocks with a total value of $26.16 billion.
Five of Jim Simons Highest Earnings Yielding Stocks:
No. 1: Insmed Inc. (NASDAQ:INSM), Weightings: 0.01% - 225,560 Shares
No. 2: Paragon Shipping Inc. (PRGN), Weightings: 0.01% - 755,112 Shares
No. 3: The Student Loan Corp (STU), Weightings: 0.01% - 13,600 Shares
No. 4: Hellenic Telecommunications Organization (OTE), Weightings: 0.01% - 450,500 Shares
No. 5: GigaMedia Ltd. (NASDAQ:GIGM), Weightings: 0.01% - 724,800 Shares
With over 3023 stocks in his portfolio, the argument against wide diversification is almost shattered considering Jim Simon's track record. This does not mean that the individual investor should try to buy and keep up with this many stocks, which is simply not feasible. So, this article seeks to find companies with Low P/E's that are trading well below their annual high price.
Insmed Inc. (NASDAQ:INSM)
Insmed Pharmaceuticals is a development stage pharmaceutical company that is developing drugs to treat metabolic and endocrine diseases associated with insulin resistance. Insmed Inc. has a market cap of $141.9 million; its shares were traded at around $1.09 with a P/E ratio of 3.9 and P/S ratio of 13.7. The corporate headquarters are in Richmond, VA. The company's book value is almost in line with their stock price and after 9 years of losing money, last year they made a killing selling assets related to their biologics platform to Merck & Company. That netted the company 118 million for the year.
Jim Simons owns 225,560 shares as of 12/31/2009, which accounts for 0.01% of the $26.12 billion portfolio at Renaissance Technologies LLC.
Paragon Shipping Inc. (PRGN)
Paragon Shipping Inc. is an Athens, Greece-based international shipping company specializing in the transportation of dry bulk cargoes , including iron ore, coal, grain, bauxite, phosphate, and fertilizers. Paragon Shipping Inc. has a market cap of $250.9 million; its shares were traded at around $4.9 with a P/E ratio of 3.1 and P/S ratio of 1.7. The dividend yield of Paragon Shipping Inc. stocks is 4.1%. Yes they are a Greek company and despite having a book value of $8.91 a share and a forward earnings per share estimate of 53 cents the stock is still under $5 a share. Based on the public records the company has consistently earned money since 2006.
Jim Simons owns 755,112 shares as of 12/31/2009, which accounts for 0.01% of the $26.12 billion portfolio at Renaissance Technologies LLC.
The Student Loan Corp (STU)
The Student Loan Corporation originates, holds and services federally insured student loans through a trust agreement with Citibank, N. The Student Loan Corp. has a market cap of $577 million; its shares were traded at around $28.85 with a P/E ratio of 4.7 and P/S ratio of 0.6. The dividend yield of The Student Loan Corp. stocks is 4.9%. The Student Loan Corp. had an annual average earnings growth of 0.9% over the past 10 years. GuruFocus rated The Student Loan Corp. the business predictability rank of 3.5-star.The majority of the company's loans are guaranteed through Federal Family Education Loan Program and last year was a good year for them. They earned over $6.28 a share and gave a $1.40 dividend. The company has a current book value of $83.52, which is close to three times their recent stock price of $29.06.
Jim Simons owns 13,600 shares as of 12/31/2009, which accounts for 0.01% of the $26.12 billion portfolio at Renaissance Technologies LLC.
Hellenic Telecommunications Organization (OTE),
HELLENIC ADR aims to participate in the technological, commercial, economic and social changes that are taking place on a global level. Hellenic Telecommunications Organization has a market cap of $5.23 billion; its shares were traded at around $5.34 with a P/E ratio of 4.3 and P/S ratio of 0.7. The dividend yield of Hellenic Telecommunications Organization stocks is 8.7%. It seems like Jim Simons really likes Greek investments from this article, but remember Renaissance Technologies owns over 3,000 stocks. The fundamentals on this stock are pretty solid. Forward earnings estimates of $0.63 per share; 1% institutional ownership, an average return on equity above 30% in the last 4 years, and a $0.52 dividend all make for a pretty nice investment opportunity.
Jim Simons owns 450,500 shares as of 12/31/2009, which accounts for 0.01% of the $26.12 billion portfolio at Renaissance Technologies LLC.
GigaMedia Ltd. (NASDAQ:GIGM)
GigaMedia Ltd. is a provider of broadband Internet access services and content through its cable-based television network infrastructure in Taiwan, its launch pad to Asia. Gigamedia Ltd. has a market cap of $165.2 million; its shares were traded at around $3.03 with a P/E ratio of 5.2 and P/S ratio of 3.1. With a current stock price of $3 and a book value of $4.26 it's well worth a closer look at GigaMedia. Last year
Jim Simons owns 724,800 shares as of 12/31/2009, which accounts for 0.01% of the $26.12 billion portfolio at Renaissance Technologies LLC.
Each of the companies highlighted above offer excellent earnings yields and is priced well under the company’s annual high stock price, which could provide excellent growth and value going forward. Please feel free to use the DCF Calculator with the stock's current data to find the current "fair value" and remember that the final decision should always be in your hands.
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About the author:
I write about stocks that look interesting to me based on 15+ years of experience in the capital markets. I rarely write about stocks that I own personally or through my company. My views are my own.