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Steven Cohen founded Stamford, Connecticut,-based SAC Capital in 1992. SAC is a diversified hedge fund that uses both fundamental and quantitative analysis based approaches. Cohen is one of the legendary traders and a billionaire. He is estimated to have an $8 billion new worth.

We believe that by imitating the stock picks of the smartest investors, such as Steven Cohen and corporate insiders, investors are more likely to beat the market. Below we compiled a list of stocks both Cohen and insiders love. These are Steve Cohen's holdings with at least $30 million and there are at least two insiders in these stocks who made a purchase since March.

Company

Ticker

Value (x1000)

Insiders

YTD Return

INGERSOLL RAND PLC

IR

148701

2

-21.10%

CENTURYLINK INC

CTL

101712

4

-11.74%

TITANIUM METALS CORP

TIE

99501

4

-12.01%

NORDSTROM INC

JWN

99036

4

2.55%

HESS CORP

HES

98602

2

-17.46%

MCMORAN EXPLORATION

MMR

78792

2

-33.17%

FORD MOTOR CALLS

F

77224

3

-22.99%

MEAD JOHNSON

MJN

66327

3

12.64%

FASTENAL COMPANY

FAST

60626

4

1.28%

LIFE TECHNOLOGIES

LIFE

57014

4

-21.93%

MYLAN INC

MYL

56959

3

-16.86%

HONEYWELL

HON

53401

3

-20.33%

OWENS CORNING

OC

50724

2

-28.43%

QUANTA SERVICES

PWR

47952

3

-6.78%

A K STEEL HOLDING

AKS

44576

8

-45.85%

M G M RESORTS INTL

MGM

42409

2

-18.32%

CHILDRENS PLACE RTL

PLCE

40192

2

3.78%

JPMORGAN CHASE

JPM

38623

6

-17.84%

KOHLS CORP

KSS

37368

2

-4.48%

WHITING PETROLEUM

WLL

34048

5

-18.70%

EATON CORP

ETN

32985

2

-22.19%

SARA LEE CORP

SLE

30869

2

-7.26%

BEST BUY COMPANY

BBY

30566

2

-19.04%

Steven Cohen’s largest position with an insider purchase is Ingersoll-Rand. Soros had $148.7 million in IR and two insiders, Gary Forsee and John Bruton, purchased a total of 4,840 shares of the stock in May and August. Ingersoll Rand is a global diversified industrial firm providing products, services and solutions to transport to protect food and perishables, secure homes and commercial properties, and enhance industrial productivity and efficiency. IR has a market cap of $11.16B and a P/E ratio of 25.63. It lost 24.51% since the beginning of the year and lost 21.10% since the end of June. Cohen increased his position in IR by 1212% in the second quarter.

In the second quarter, Cohen initiated a brand new $77 million Ford Motor Company position. Ford Motor Company is a U.S. multinational automaker. It has a market cap of $40.05B and a P/E ratio of 6.07. F has a loss of 38.43% since the beginning of the year and 22.99% since the end of June. Among the three insiders, William Ford bought a total of 50,000 shares of F on Sept. 6 and 12, and Anthony Earley also bought 25,000 shares on Sept. 6. These recent activities might indicate a good investment at this time.

Cohen largely increased his position in Honeywell International Inc. by 71-fold in the second quarter, and he had $53.4 million in HON at the end of June. Judd Gregg bought 2,000 shares on Aug 5, and Scott David bought 5,000 shares of HON on Aug 22, while Jaime Pardo purchased 5,000 shares of HON on Aug 26. Honeywell is a major conglomerate company that produces a variety of consumer products, engineering services and aerospace systems for a wide variety of customers, from private consumers to major corporations and governments. HON has a market cap of $37.02B and a P/E ratio of 15.11. It lost 11.41% since the beginning of the year and 20.33% since the end of June. The stock might be undervalued at this time.

AK Steel Holding Corp has the biggest number of insider purchases since March. Eight insiders bought the stock since then (check out the list of the insiders purchased AKS here). AKS is a U.S. steel company. Its main products are carbon, stainless and electrical steels, cold rolled and aluminum coated stainless steel for automakers. It has a market cap of 911.88M and suffered a huge loss this year. AKS lost 48.51% since the beginning of the year and 45.85% since the end of the second quarter. During the second quarter AKS was trading around $15 and closed the second quarter at $15.66. Cohen increased his position in AKS by 40% during the second quarter and held a $44.6 million position at the end of June. Obviously Cohen was thinking that AKS was a good investment when it was trading at $15. Now many insiders joined him too, buying at $8. So this might be a great time to buy AKS because hedge funds and insiders agree that the stock is great potential.

Among all the stocks Cohen and insiders like, MJN, PLCE, JWN, FAST and KSS achieved the highest return since July, while AKS, MMR, OC, F and ETN performed worst. Although some of the stocks picked by Cohen and insiders underperformed the market, we still believe that investors can outperform the market over the long-term by focusing on the stock picks of these smart and connected investors.

Disclosure: I am long CTL.

Source: Steven Cohen And Insiders Love These Stocks