Speaking of Realty Income (O), I noticed that my favorite REIT recently popped up in the portfolio of quantitative hedge fund legend Jim Simons, CEO of Renaissance Technologies.
Renaissance Technologies’ returns over the years have been mind-blowing. If fact, if I hadn’t already been familiar with Simons, I would have assumed his returns were bogus because they seem too good to be true. Simons’ Medallion fund became the stuff of legends by generating annual returns in excess of 35% since 1988 … and that was after the fund’s hefty fees were taken out.
Renaissance Technologies added shares of Realty Income in the second quarter. Given Renaissance’s fast-moving trading style, it’s possible that they already liquidated the position. Still, other gurus have been snapping up shares as well, including Ray Dalio and Steven Cohen.
Because of Realty Income’s position as a “bond substitute,” its share price has been hit particularly hard among REITs. The same is true for its peers in the conservative triple-net retail sector. But at current prices, Realty Income yields 5.4% And I should emphasize that this is one of the most consistent dividend payers (and serial raisers) you can find on any stock exchange in the world. This is a REIT that skated through the 2008 meltdown with nary a scratch.
I suspect that were I to write this article next quarter, I might find quite a few new smart-money gurus among its owners.
Charles Lewis Sizemore, CFA, is the chief investment officer of the investment firm Sizemore Capital Management. As of this writing, Sizemore Capital was long O and NNN. Click here to receive his FREE 8-part investing series that will not only show you which sectors will soar but also which stocks will deliver the highest returns. The series starts November 5 and includes a FREE copy of his 2014 Macro Trend Profit Report.