Top Value Stocks of Super Fund Renaissance Technologies

Among the myriad ways for individuals to come up with investment ideas is to review the stock holdings of a very successful hedge fund and then pick out the best of those stocks to invest in based on one's own homework and metrics.

One of the most viewed hedge fund portfolios at Stockpickr.com is that of Renaissance Technologies, a New York-based hedge fund founded 25 years ago by Jim Simons. The quantitative fund's many PhD mathematicians and statisticians use computer models to determine trends and to source investment ideas.

Its Medallion Fund is considered the most successful hedge fund in the industry, with returns reportedly 10% higher than those of George Soros. Because of its success, the firm is able to command 44% of the profits and a 5% management fee.

Stockpickr has reviewed the stocks held by Renaissance and extracted the stocks with the lowest price/earnings-to-growth, or PEG, ratios, into the Top Stocks of a Top Hedge Fund. The PEG ratio measures the price-to-earnings (P/E) ratio in relation to the company's expected future earnings growth rate. Generally, the lower the PEG, the better the value, with a PEG below 2 considered very favorable.

The Renaissance stockholding with the lowest PEG ratio is Royal Dutch Shell(RDS.B), the Netherlands-based oil and gas company with a PEG of 0.7. The company last week announced that it bought back a significant number of its "A" shares. Royal Dutch has a P/E of 9.1 and a yield of 3.5%.

Royal Dutch Shell appears in the Stockpickr portfolio called Top-Yielding Stocks with Raised Dividends, due to the fact that it raised its dividend by 14% earlier this year. Other stocks that showed up in this portfolio include Reynolds American(RAI), which has a PEG of 2.5, Bank of America(BAC), with a PEG of 1.5, and Wells Fargo(WFC), at a 1.1 PEG.