Friday, December 30, 2011

Stocks Liked by both Warren Buffett and Renaissance Technologies

Everyone knows who Warren Buffett is, top investor and trader and either the richest, second richest, or third richest man in the world, depending on what day of the year it is. One technique that investors use is piggybacking on Warren Buffett's Berkshire Hathaway (BRK-A) (BRK-B) portfolio. Yet Buffett owns over thirty stocks in the portfolio of Berkshire Hathaway, according to So what is an investor to do?

Investors can look at what top hedge funds are investing in, and compare that list to Buffett's stocks. One of the top hedge funds is Renaissance Technologies, founded in 1982 and run by James Simons. Renaissance's Medallion fund was the most profitable hedge fund with profits of over $1 billion in 2009. Also, the Medallion Fund has had an average annual return after fees of 35% since 1989. Renaissance charges the highest fees in the industry with a management fee of 5% and a profit participation of 44%.

Now lets look at the stocks that are preferred by both Berkshire Hathaway and Renaissance Technologies. Both own Intel (INTC), the world's largest semiconductor chip maker by revenues. The stock trades at ten times forward earnings and pays a decent yield of 3.5%. Latest quarterly earnings were up 17.4% on a 28.2% rise in revenues.

Another stock in common is Procter & Gamble Co. (PG), known for such brands as Head & Shoulders, Olay, Gillette, Mach3, Crest, Oral-B, Iams, Pringles, Dawn, Downy, Duracell, Gain, Tide, Bounty, Charmin, and Pampers. The stock has a forward price to earnings ratio of 14.6 and provides investors with a yield of 3.2%. Revenues for the latest quarter were up 8.9%, but earnings were down 1.9%.

Buffett and Simons also own Costco (COST), the third largest retailer in the United States. The stock trades at 19 times forward earnings and yields 1.1%. Latest quarterly earnings were up 2.6% on a 12.4% increase.

One more stock owned by both: General Dynamics Corp. (GD). The stock has a favorable forward PE of 9 and pays a yield of 2.9%.

And of course, Renaissance Technologies owns shares of Berkshire Hathaway (BRK-A) (BRK-B).

If you want to see a free list of the stocks owned by Warren Buffett's Berkshire Hathaway, go to

Disclosure: Author didn't own any of the above at the time the article was written.


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