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It is never a good idea to mindlessly mimic the buying and selling decisions of famous investors. There are several reasons for this. First, they are not always right. Famous investors may have good returns (on average), but this does not ensure that every position will perform well. Secondly, even with SEC filings and shareholder letters, investor positions are rarely fully transparent. Investors often uses hedges and spreads to focus their risk exposures. This effectively reduces much of the insight we can extract simply by looking at long stock positions. Finally, there is almost always a delay between the moment smart money investors initiate a position and the moment they disclose their position to the SEC or to shareholders.

Still, it is worth following the market's most successful investors. This is an important source for new investment ideas so long as you realize that it is only the start of the research process. Here is a list of four stocks that smart money investors just purchased.

Louisiana-Pacific Corp (LPX)

JHT Capital initiated a new position in the Nashville based building materials company. Their 5.41% stake makes them one of the company's top five largest investors. Other notable shareholders include Dimensional Fund Advisors, Guggenheim Capital and Jeffrey Gendell.

LPX operates in three business segments: oriented strand board siding and engineered wood products. Between 2008 and 2010, production volumes declined across all three segments but sales actually increased very modestly from $1.376 billion to $1.384 billion. LPX lost money in 2010 but is expected to earn money by 2012. The company trades at a forward P/E of 90.76, a price/sales of 0.74 and a price/book of 0.88.

Amylin Pharmaceuticals (AMLN)

SAC Capital added to their stake in the company. The famed hedge fund now owns 6,327,861 shares or 4.3% stake in the drug maker.

The drug maker produces Symlin and Byetta. They also have a pipeline with some strong potential commercial drugs, including Metreleptin. The company's stock price has been dragged down by declining sales and failed drug applications. In 2007, the stock traded close to $55 per share, but is currently below $15 per share. AMLN could rebound if their Bydureon diabetes drug has a successful FDA resubmission.

Flextronics International (FLEX)

Glenview Capital added to their stake in the company. The successful hedge fund now holds 40,305,334 shares of a 5.45% stake in the Singapore based electronics company. FLEX designs and produces electronics manufacturing services "EMS" to original equipment manufacturers "OEM" in various segments. More than a third of the company's assets and sales are based in China, with other manufacturing originating in Mexico, US, Malaysia and Hungary. Around 27% of the company's sales are in infrastructure, 21% are in mobile, 20% are in industrial and automotive, 18% are in computing and 13% are in con

FLEX trades at a trailing P/E of 8.39, a forward P/E of 5.57, a PEG ratio of 0.44 and a price/sales of 0.16. The company's 2010 revenues have rebounded sharply since 2009, but they are still below 2008 levels. Still, gross profits for the year ending March 31, 2011 were $1.58 billion.

Unum Group (UNM)

Activist investing firm Relational Investors LLC increased their stake in Unum Group to 6.20%. Their 19,072,257 shares make Relational one of UNM's top five shareholders.

Unum is an insurer that offers life, accident, disability and long-term care policies in the US and UK. UNM trades at a trailing P/E of 9.11, a forward P/E of 7.59, a PEG ratio of 0.93 and a price/book of 0.85. The company already trades at cheap valuations, but Relational's increased ownership could eventually act as a catalyst for more aggressive shareholder value creation. Over the last five years, the company has doubled net income amid a relatively stable level of revenues and assets. They did this by reducing total expenses from $10.07 billion to $8.86 billion.

Source: 4 Recent Smart Money Stock Purchases