Investing

Renaissance Technologies Top Trades This Quarter Included Apple, Amazon, Taiwan Semiconductor And More

Ben Ward

Published: February 16, 2023 10:45 pm

New York based hedge fund Renaissance Technologies reported fourth quarter trades to the SEC last week in the latest 13F filing.

Renaissance Technologies is an investment management firm that employs mathematical and statistical methods in the design and execution of its investment programs.

The fund was founded 41 years ago by James Simons and Howard Morgan and is currently headed by CEO Peter Brown.

Renaissance Technologies fund ended the year with 4,073 current positions.

Top purchases:

Apple Inc was the most significant trade by the fund this quarter with a 1.02% portfolio increase to 1.26% of the total portfolio. The position was worth $0.92 billion in value at the close of the quarter.

AAPL shares have been on the rise in 2023, gaining 25% since the beginning of the year leading into first quarter results. At the beginning of February, Apple reported first quarter results that missed the market’s profit and sales expectations.

The second most significant trade was in e-commerce giant Amazon.com (US:AMZN) with an 0.80% portfolio increase to 1.30% The position was worth $0.95 billion at the end of the year.

AMZN shares have slipped more than 50% from pandemic highs but have staged a 20% recovery over 2023. The company reported fourth quarter results at the beginning of February that was below market forecasts. AMZN guided the market to expect $121 to $126 billion in sales for the first quarter.

The third largest investment was in Taiwan Semiconductor (US:TSM) with a new position in the stock worth $560 million. TSM’s stock price has rallied 55% from the annual low point of $60 but remains well below pandemic highs. The stock currently trades on a 14.3x PE ratio. Over the last few days, the stock has fallen on news that Warren Buffet exited the chip stock.

The fund also initiated a position in EV manufacturer Tesla Motors  (US:TSLA) with a 0.57% portfolio weight worth around $420 million. Tesla’s stock price has almost doubled from the low point of about $100 reached at the start of the year. When TSLA reported fourth quarter results at the end of January, the stock posted a positive underlying EPS figure that was ahead of market forecasts with positive free cash flows of $1.42 billion.

The fifth largest investment was in healthcare conglomerate Johnson & Johnson (US:JNJ) with a new 0.54% portfolio allocation worth around $400 million. JNJ’s shares have traded broadly flat over the last two years, retaining the gains made over the pandemic. JNJ continues to grow revenues with solid levels of profitability and pays a 2.84% dividend yield.

Other portfolio additions included Paypal Holdings (US:PYPL) UnitedHealth Group (US:UNH), Wells Fargo & Co (US:WFC) and Amgen Inc (US:AMGN)

Top sales:

The largest divestment for the fund was a complete sell down of Microsoft Corporation (US:MSFT) which had a 1.26% portfolio weight. MSFT shares are down 10% on a 1 year view and continue to trade on a 30x PE ratio, above the market average. The company met market expectations during the last Q2 result.

The second largest sale was a total exit in Home Depot Inc (US:HD) which had a 0.62% portfolio weight. HD’ stock is trading 10% lower on a 1 year view and has moved sideways over 2023. Investors remain concerned about demand for its goods with the prospects of an upcoming recession.

JPMorgan Chase & Co (US:JPM) was the third largest sale and held a 0.47% weight in the fund removed. The bank beat market forecasts during the fourth quarter and trades on an 11.9x PE ratio with a 2.78% dividend yield.

Nike Inc (US:NKE) Inc was the fourth largest sale list with a sell down of a 0.44% position. NKE shares have recovered 40% from the annual low point hit in early October, however shares are still around 30% below pandemic highs.

The fifth largest position removed from the portfolio was in ABIOMED Inc (US:ABMD) which had a 0.44% position size. The stock was recently acquired by Johnson & Johnson.

Other position reduction and sales occurred in Costco (US:COST), Broadcom (US:AVGO), ASML (US:ASML) and Accenture PLC (US:ACN).

This article originally appeared on Fintel