Seeking Alpha
Newsletter provider, fund holdings, insider ownership
Profile| Send Message|
( followers)  

Jim Simons and David Tepper are among the richest people in the world. According to Forbes, Simons is ranked 74th and Tepper is ranked 208th in the list of world billionaires. Simons founded Renaissance Technologies, which manages over $25 billion in three funds; the Medallion Fund, the Nova Fund and the Renaissance Institutional Equities Fund. Simons owns between 25 to 50 percent of Renaissance, and is also the largest investor in Medallion Fund, the best hedge fund we track. Tepper, on the other hand, is the founder of Appaloosa Management. Tepper made $4 billion in 2009 and returned about 30% in 2010. The Tepper School of Business at Carnegie Mellon University is also named after him.

Stocks both Simons and Tepper are bullish about at the end of September:

Company Name

Ticker

Simons

Tepper

APPLE INC

(NASDAQ:AAPL)

398853

14530

MICROSOFT CORP

(NASDAQ:MSFT)

237092

42610

APPLIED MATERIALS INC

(NASDAQ:AMAT)

75320

42894

C F INDUSTRIES

(NYSE:CF)

71103

66630

GOOGLE INC

(NASDAQ:GOOG)

55234

26393

LAM RESH CORP

(NASDAQ:LRCX)

47308

34395

HOLLYFRONTIER CORP.

(NYSE:HFC)

31668

41932

TERADYNE INC

(NYSE:TER)

25277

18320

C V R ENERGY

(NYSE:CVI)

23396

133384

NAVISTAR INTL

(NYSE:NAV)

20512

17120

INTERNATIONAL PAPER

(NYSE:IP)

20490

77108

K L A TENCOR CORP

(NASDAQ:KLAC)

17405

39602

WESTERN REFINING INC

(NYSE:WNR)

8267

25417

GENERAL MOTORS CO

(NYSE:GM)

7618

2004

BP PLC

(NYSE:BP)

5707

5671

DELTA AIR LINES INC

(NYSE:DAL)

4424

21423

MOSAIC CO.

(NYSE:MOS)

2468

36091

MACYS INC

(NYSE:M)

2299

86502

CITIGROUP INC

(NYSE:C)

1102

64556

U S AIRWAYS GROUP

(LCC)

487

51101

SUPERMEDIA INC

(SPMD)

71

449

The largest position in Simons’ portfolio as of September 30 was Apple Inc (AAPL). According to the latest 13F of Renaissance Technologies, the fund had nearly $400 million invested in AAPL. Tepper’s Appaloosa Management also invested $14.5 million in Apple at the end of the third quarter. Since then, AAPL returned 2.45%, lower than the 9.54% of SPY. But Apple’s earnings are expected to grow at 21.75% in the next few years, meaning that the PE ratio for AAPL using future earnings is relatively low. Therefore, AAPL is still an attractive stock, as it is currently trading at a discount. Stephen Mandel is also bullish about AAPL. His Lone Pine Capital invested $785 million in AAPL shares.

During the third quarter, Simons initiated a brand new $237 million position in Microsoft Corp (MSFT). Tepper’s Appaloosa Management also owned $42.6 million worth of MSFT. Similar to AAPL, MSFT underperformed the market in the fourth quarter: it returned 2.83% so far since the end of September. Considering the fact that MSFT has a relatively low PE ratio of 9.37 and high dividend yield of 3.10%, it is still a good choice for investors, especially in the inflationary environment. Boykin Curry’s Eagle Capital Management also invested nearly $500 million in MSFT.

Another mega-cap stock both Simons and Tepper are bullish about is Google Inc (GOOG), in which Simons invested $55 million and Tepper invested $26 million at the end of the third quarter. The $202B market cap stock returned 19.61% since the end of September, beating the market by over 10 percentage points. Stephen Mandel’s Lone Pine Capital had $483 million invested in GOOG as well.

Simons and Tepper are also in favor of CF Industries Holdings (CF), Applied Materials Inc (AMAT), International Paper Co (IP), Macys Inc (M), Lam Resh Corp (LRCX), HollyFrontier Corp (HFC), and Citigroup (C). Both managers have outstanding track records, making them become billionaires. Our research has shown that investors will be able to beat the market in the long term by focusing on the stock picks of successful fund managers like Jim Simons and David Tepper, and we encourage investors to do an in-depth analysis of these stocks for their portfolio.

Disclosure: I am long MSFT, C.

Source: Jim Simons And David Tepper Are Bullish About These Stocks