Stockpickr) -- It's one thing to follow the moves of some of the world's
most successful investors -- but how about the smartest? According to the
Financial Times, Jim Simons is just that. The founder of hedge fund manager
Renaissance Technologies, Simons earned the moniker of world's smartest billionaire while generating legendary returns at its off Wall Street campus.
Renaissance Technologies isn't like most Wall Street firms because it doesn't hire Wall Street types; only scientists need apply. Simons himself holds a Ph.D. in mathematics and was the chairman of Stony Brook University's math department until 1978 when he entered the investing world full time. Today, around a third of Renaissance's employees are Ph.D.s whose expertise ranges from astronomy to physics.
It's a system that's worked well for the firm, which boasts a 2,478% cumulative return since 1999.
Here's a look at some of the new positions Renaissance Technologies
added to its portfolio last quarter.
It's hard to summarize
(GE - Get Report)
business in a single sentence: From household appliances to jet engines to media networks, this behemoth $150 billion stock is a far cry from the firm Thomas Edison created in the late 1800s. Right now, GE has some interesting prospects for investors who are willing to see past the GE Capital and NBC Universal headlines.
In the fallout from the credit crunch, GE Capital Services continues to be hit hard by high exposure to commercial real estate and weaker elements of consumer credit. But the division's troubles are buffeted by strong diversification across GE's other lines, and a recovering consumer credit market should start applying the brakes to write-offs.
Ultimately, GE's more-exciting brands should regain the limelight in 2010. Renaissance is long the stock, with a new $152.25 million stake in shares added as of the firm's last quarterly filing.
Life science stock
(MIL - Get Report)
is another stock that Renaissance Technologies picked up in the last quarter, in the form of an $81 million stake. Millipore's products are primarily used by scientists in biotech and pharmaceutical companies, academia and research institutions. With the pharmaceutical industry plagued by patent expirations in the coming years, the battle for R&D spending is on -- a battle that Millipore should be a major beneficiary of.
High acquisition and switching costs give Millipore a strong enough competitive advantage that the firm has consistently generated double-digit profit margins. And those factors have ensured that the company scoops up recurring revenues through the sale of consumables used in the research process.
Right now foreign currency risks are high for Millipore's shareholders. Because the company derives nearly 70% of revenue overseas, volatile currency situations in Europe (and a strengthening dollar, for that matter) don't bode well. That said, as the euro starts to stabilize on hopes that PIIGS concerns can be quelled, the opportunity exists for Millipore to get higher prices in the EU once again.