Alpha Metallurgical Resources (AMR): Among Billionaire Jim Simons' RenTech's Small-Cap Stock Picks with Huge Upside Potential

We recently published a list of Billionaire Jim Simons’ RenTech’s 10 Small-Cap Stock Picks with Huge Upside Potential. In this article, we are going to take a look at where Alpha Metallurgical Resources, Inc. (NYSE:AMR) 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.

Renaissance Technologies (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.

Our Methodology

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 (see more details here).

Alpha Metallurgical Resources, Inc. (NYSE:AMR)

Renaissance Technologies’ Stake Value: $108,107,826

Upside Potential as of May 1: 48.74%

Market Capitalization as of May 1: $1.535 Billion

Number of Hedge Fund Holders: 33

Alpha Metallurgical Resources, Inc. (NYSE:AMR) is a US-based mining company that mainly produces metallurgical coal (a raw material used to make steel). The company operates coal mines in Central Appalachia and supplies its products to steel producers both in the US and around the world.

In Q4 2024, Alpha Metallurgical Resources, Inc. (NYSE:AMR) reported a net loss of $2.1 million ($0.16 per diluted share) for the quarter. This is a huge decline from the $176.0 million net income reported in Q4 2023. Adjusted EBITDA came in at $53.2 million, down from $266.3 million in the same period last year. On the other hand, operating cash flow decreased to $56.3 million compared to $199.4 million in Q4 2023. The management reduced its 2025 volume guidance for metallurgical coal shipments to 14.5-15.5 million tons, the reason being weak metallurgical coal market conditions.

Despite the challenging financial posture, several institutional investors have strengthened their stakes in Alpha Metallurgical Resources, Inc. (NYSE:AMR). Russell Investments Group Ltd. boosted its position by 86.5% in Q4 2024, acquiring an additional 4,280 shares to bring its total ownership to 9,228 shares. Barclays PLC grew its holdings by 308.2% in Q3, adding 14,089 shares for a total position of 18,646 shares. Notably, 33 hedge funds and institutional investors, including RenTech, now own 84.29% of the company’s stock. Analysts hold a Moderate Buy opinion on the stock, and their 12-month average price target points to a 48.74% upside from current levels as of May 1.

Overall, AMR ranks 4th on our list of Billionaire Jim Simons’ RenTech’s small-cap stock picks with huge upside potential. While we acknowledge the potential of AMR 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 AMR 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.