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David Tepper is a value investor and the founder of Appaloosa Management. The fund manages $16 billion and returned around 30% in 2010. Tepper currently ranks as the 258th richest person in the world. Hedge funds such as Appaloosa devote significant resources to researching stocks and sometimes cross the line to try to obtain material non-public information before investing.

Corporate insiders have material non-public information and they sometimes trade based on such information. Other times they have an edge because they know their companies and industries better than almost all other investors. We believe that by imitating the stock picks of these smartest investors in the world, investors are more likely to beat the market in the long term.

Below we compiled a list of 18 stocks that David Tepper and insiders are bullish about. All these stocks were purchased by at least one insider over the past six months.

Company

Ticker

Value (x1000)

No. of Insiders

YTD Return

PFIZER INC

PFE

298,597

1

2.04%

UNITED CONTINENTAL

UAL

125,953

1

-23.44%

C F INDUSTRIES

CF

122,898

1

8.26%

BANK OF AMERICA

BAC

109,600

1

-57.17%

APPLIED MATERIALS

AMAT

85,204

1

-25.04%

WELLS FARGO

WFC

81,566

2

-25.90%

MERCK & CO

MRK

74,590

2

-10.60%

UNITEDHEALTH

UNH

68,400

1

28.07%

E TRADE FINANCIAL

ETFC

58,885

2

-40.97%

MEDTRONIC INC

MDT

55,640

3

-10.40%

MUELLER WATER

MWA

44,699

4

-47.63%

FIFTH THIRD BANCORP

FITB

39,612

1

-34.47%

MARATHON OIL CORP

MRO

37,087

1

-1.83%

NAVISTAR INTL

NAV

36,716

5

-42.82%

SUNTRUST BANKS INC

STI

35,426

4

-43.80%

TESORO CORP

TSO

35,057

2

1.49%

YAHOO INC

YHOO

31,037

2

-16.48%

A M R CORP DEL

AMR

30,376

2

-58.46%

The biggest position in Tepper’s fund at the end of June was Pfizer (NYSE:PFE), a research-based, global biopharmaceutical company. Tepper slightly decreased his position in the stock by 6% to $299 million. One insider purchased PFE over the past six month and the stock returned 2.04% since the beginning of this year. PFE has a market cap of $136.07 billion and a P/E ratio of 16.33. David Einhorn and Ken Fisher both have over $400 million invested in PFE shares (check out Fisher’s top stock picks).

United Continental Holdings Inc (NYSE:UAL) is the second largest position in Tepper’s portfolio. United Continental is an airline holding company. Tepper decreased his UAL position by 3% to $126 million over the second quarter. UAL lost 23.44% since the beginning of this year, underperforming the market by about 14 percentage points. One insider purchased UAL over the past six months. UAL has a market cap of $6.81 billion and a P/E ratio of 14.91. Paul Reeder and Edward Shapiro had $250 million invested in UAL shares.

CF Industries Holdings (NYSE:CF) is the third biggest position of Appaloosa. CF Holdings is a manufacturer and distributor of nitrogen and phosphate fertilizer products. Tepper decreased his holding of CF by 7% to $123 million over the second quarter. CF was purchased by one insider in the past six months and returned 8.26% since the beginning of this year. CF has a market cap of $10.46 billion and a P/E ratio of 10.33. Phill Gross and Robert Atchinson invested $183 million in CF stocks.

Bank of America Corporation (NYSE:BAC) is a bank holding company and a financial holding company. Tepper had $110 million invested in BAC at the end of June but he reduced his position by 42% during the second quarter. BAC was purchased by one insider over the past six months and lost 57.17% since the beginning of this year. BAC has a market cap of $63.95 billion. John Paulson invested over $600 million in BAC shares (check out Paulson’s top stock picks).

UnitedHealth Group Inc (NYSE:UNH), a health and well-being company, is the best performing stock on the list above. It returned 28.07% so far this year, outperforming the market by 18 percentage points. Tepper had $68 million invested in UNH shares at the end of the second quarter and one insider purchased the stock over the past six months. UNH has a market cap of $50.71 billion and a P/E ratio of 10.56. Boykin Curry had $382 million invested in UNH.

Marathon Oil Corp (NYSE:MRO) is an integrated international energy company engaged in exploration and production; oil sands mining; integrated gas, and refining, marketing and transportation. Tepper largely increased his position in MRO by 182% to $37 million during the second quarter. MRO was purchased by one insider and it lost 1.83% since the beginning of this year, beating the market by eight percentage points. MRO has a market cap of $15.77 billion and a P/E ratio of 6.32. Eric Mindich held $287 million of MRO stocks.

Navistar International Corp (NYSE:NAV) has the biggest number of insider purchases over the past six months. Five insiders bought NAV while it lost 42.82% since the beginning of this year. Navistar is a manufacturer of engines and vehicles. Tepper invested $37 million in NAV shares at the end of June. NAV has a market cap of $2.44 billion and a P/E ratio of 1.72. Jeffrey Altman invested $388 million in NAV stocks.

Tesoro Corp (NYSE:TSO) is an independent petroleum refiners and marketers in the United States. Tepper significantly increased his position in TSO by 283% to $35 million during the second quarter. TSO was purchased by two insiders and returned 1.49% since the beginning of this year. TSO has a market cap of $2.74 billion and a P/E ratio of 7.14. David Dreman had $38 million invested in TSO (check out Dreman’s top stock picks).

Source: David Tepper And Insiders Love These 8 Stocks