Perdoceo Education Corporation (PRDO): Among Billionaire Jim Simons' RenTech's 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%.
READ ALSO: Billionaire Seth Klarman's 10 Stock Picks with Huge Upside Potential and Billionaire Andreas Halvorsen's 10 Stock Picks With Huge Upside Potential.
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 student interacting with their professor in an online learning environment.
Perdoceo Education Corporation (NASDAQ:PRDO) is an American for-profit postsecondary education provider. The company offers career-oriented degree programs through three main institutions: the University of St. Augustine for Health Sciences, Colorado Technical University, and the American InterContinental University System. It targets students seeking higher education, and its end market is primarily the US education sector.
Perdoceo Education Corporation's (NASDAQ:PRDO) quarterly revenue in Q4 2024 increased by 19.3% to $176.4 million compared to the prior year quarter. Operating income surged 133.2% to $37.2 million, while adjusted operating income rose 122.9% to $43.2 million. The company's growth is underpinned by impressive enrollment gains; total student enrollments increased by 20.0% to 41,400 students during the fiscal year 2024. This includes the addition of 3,800 students from the newly acquired University of St. Augustine for Health Sciences.
Looking ahead, Perdoceo Education Corporation's (NASDAQ:PRDO) management is optimistic about 2025. They project adjusted earnings per diluted share to range between $2.31 and $2.51, a potential growth from the $2.29 recorded in 2024. According to CEO Todd Nelson, the company has robust momentum in prospective student interest, student retention, and student engagement.
'This broad momentum sets us up well for 2025 while our faculty and student support teams continue to prioritize enhancing student experiences, retention and academic outcomes for current and prospective learners,' he commented.
On April 26, 2025, analysts at Barrington Research reaffirmed their Outperform rating on Perdoceo (NASDAQ:PRDO) stock with a $35.00 price target. This suggests a potential upside of nearly 40% from current levels as of May 1.
Overall, PRDO ranks 8th on our list of billionaire Jim Simons' RenTech's small-cap stock picks with huge upside potential. While we acknowledge the potential of PRDO 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 PRDO 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.
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