Is Novo Nordisk (NVO) the Best Stock to Buy According to Jim Simons' Renaissance Technologies?
Even after his passing in 2024, billionaire investor and mathematician Jim Simons remains known as the 'Quant King' of hedge funds due to the extraordinary success of Renaissance Technologies, his quantitative trading firm based in New York. After years of researching the finance industry, Simons realized the untapped potential of employing quantitative analysis to capitalize on market inefficiencies. This insight led him to develop a data-driven investment strategy of analyzing market behavior solely using statistical and mathematical models. By identifying subtle, non-random patterns in financial data, the quant genius predicted future stock movements and generated impressive returns.
Although it is closed to outside investors, Jim Simons' secretive Medallion hedge fund, a flagship of Renaissance, has produced ground-breaking results since its inception. The Medallion Fund raked in impressive returns of 56.6% and 74.6% during the early 2000s dot-com crash and the global financial crisis between 2007 and 2011. The fund has maintained a substantial annual return of 31.5% since its first two years of operation. At the time of his death, Simons was worth $31.4 billion, ranking him among the world's wealthiest individuals, thanks to the strong market performance of the Medallion Fund and Renaissance.
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Renaissance Technologies' computer-driven powerhouse came off to a great start after a stellar performance in 2024. The Renaissance Institutional Diversified Alpha Fund has gained 9.05% as of February, continuing to build on its impressive 2024 return of 15.6%, which was its best since its inception in 2021. Meanwhile, the Renaissance Institutional Equities Fund has had its best start in over ten years, rising 11.85% in the first two months of 2025. Both funds are allowed to maintain sizable individual stock positions in addition to using stock index futures and options to help manage risk. However, the firm warns that it may be difficult to quickly unwind these sizable holdings without impacting market prices.
For this list, we picked stocks from Renaissance Technologies' 13F portfolio as of the end of the fourth quarter of 2024. These equities are also popular among elite hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points ().
An elderly couple receiving insulin from a pharmacist, representing healthcare company's successful pharmaceutical products.
Novo Nordisk A/S (NYSE:NVO) is a prominent global healthcare company that focuses on treating rare diseases, diabetes, and obesity. With 48,000 workers spread across more than 168 countries, Novo Nordisk is well-known for its pharmaceuticals, which include Wegovy, Rybelsus, and Ozempic.
On May 7, BofA Securities lowered its price target for Novo Nordisk A/S (NYSE:NVO) shares from DKK 910 to DKK 850, despite maintaining a buy rating on the stock. During a call with an analyst, Novo Nordisk stated that it was confident in a second-half year inflection, driven by several initiatives. The company also intends to implement a focused SG&A commercial strategy. Novo Nordisk's guidance is predicated on the idea that Wegovy and Ozempic will both benefit from a decrease in compounded semaglutide in the second half of the year. However, BofA's analyst pointed out that the company provided limited information about the workings of these processes, such as the effects of capture rates, brand switching, and inventory levels.
Overall, NVO ranks 3rd on our list of best stocks to buy according to Jim Simons' Renaissance Technologies. While we acknowledge the potential for NVO as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than NVO but trades at less than 5 times its earnings, check out our report about this .
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Disclosure: None. This article is originally published at .
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