Alkermes plc (ALKS): Among Billionaire Jim Simons' RenTech's Small-Cap Stock Picks with Huge Upside Potential

Yahoo

03-05-2025

We recently published a list of . In this article, we are going to take a look at where Alkermes plc (NASDAQ:ALKS) stands against Billionaire Jim Simons' RenTech's other small-cap stock picks with huge upside potential.
Jim Simons was (and still is even after his death in May 2024) one of the biggest names – if not the biggest – in the hedge fund space. He was a gifted mathematician and had a successful career in academia before making a bold pivot to finance in the late 70s.
In 1978, he founded Monemetrics (a currency trading firm) and Limroy (a hedge fund), which were collapsed into one entity in 1982 and renamed Renaissance Technologies Corporation. This entity had one major objective: to use quantitative, computer-driven models to exploit market inefficiencies. In other words, Simons and his team were committed to making investment decisions based on sophisticated algorithms.
(RenTech) began as a hedge fund but later morphed into something bigger. It is now an investment management firm that operates several hedge funds. Its flagship offering is the Medallion Fund. The Medallion Fund is known for extraordinary returns. During the dot.com crash (early 2000s) and the financial crisis (2007-2011), Medallion's returns were 56.6% and 74.6%, respectively. Following the first two years of operation, the lowest annual return was 31.5%.
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The Medallion Fund's track record in the market, and by extension RenTech's, made Simons a lot of money. At death, he was worth $31.4 billion and ranked among the top 100 richest people in the world. And, as Simons often said, all of the success he had in the market comes down to the love of mathematics. Accordingly, the Medallion Fund has been capable of extraordinary returns mostly because the investment team – led by Simons – leveraged mathematics.
The fund utilizes algorithm-based methods to identify patterns and leverage past data for investing decisions. That is why RenTech invested (and continues to invest) billions in intellectuals and professionals from fields like Mathematics, Computer Science, and Physics. In one of his last interviews, he said: 'We hired statisticians, physicists, astronomers, mathematicians — the important thing was that they were very smart.'
Jim Simons was a generational talent when it came to investing. He started an investment business and led to heights that others can only dream of. And because his legacy lives in RenTech, it makes sense to want to know what companies they're invested in.
We sifted through Renaissance Technologies' Q4 2024 SEC 13F filings to compile this list. We focused only on shares in companies and excluded interests in ETFs and options. Then, we picked the stocks with a market capitalization of $10 billion or less. From the result, we ranked the stocks based on analyst price targets and selected the top 10 companies with the highest upside potential (as of April 30).
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 ().
A pharmacist handing someone a prescription bottle containing the company's biopharmaceutical product.
Alkermes plc (NASDAQ:ALKS) is a biopharmaceutical company based in Ireland. It develops and manufactures medicines for mental health, neurological conditions, and cancer. Its key products include treatments for alcohol and opioid dependence (like VIVITROL®), schizophrenia (ARISTADA® and LYBALVI®), and bipolar I disorder.
In its fourth quarter and full-year 2024 financial results, Alkermes (NASDAQ:ALKS) reported total revenues of $1.56 billion for the year. Proprietary product net sales increased approximately 18% year-over-year to $1.08 billion. The company posted $372 million in GAAP net income from continuing operations and diluted earnings per share (EPS) of $2.20. Notably, VIVITROL revenues grew 31% (to $134.1 million) in the quarter compared to the same period in 2023. At the same time, LYBALVI revenues increased 37% to $77.0 million for the quarter.
These strong financial results align with growing opportunities in the addiction treatment space. A recent Harris Poll survey commissioned by Alkermes (NASDAQ:ALKS) revealed that 83% of respondents with alcohol use disorder (AUD) agreed that it's difficult to treat/manage AUD through willpower alone. This highlights the importance of medical interventions. Additionally, market research indicates the global detox products market was valued at $66.23 billion in 2024 and is expected to grow at a CAGR of 6.3% through 2030. On April 28, 2025, UBS revised its price target for Alkermes (NASDAQ:ALKS) from $38 to $33 while maintaining a Neutral rating. The firm cited softer Q1 guidance and anticipated market dynamics related to upcoming orexin-related data releases in the latter half of 2025.
Overall, ALKS ranks 9th on our list of billionaire Jim Simons' RenTech's small-cap stock picks with huge upside potential. While we acknowledge the potential of ALKS as an investment, our conviction lies in the belief that 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 ALKS but that trades at less than 5 times its earnings check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.