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David E. Shaw founded D. E. Shaw & Co., L.P. in 1988 in New York City. It is a global investment management firm that makes extensive use of quantitative technologies and qualitative trading strategies to manage its investments. The company makes private equity investments in technology, wind power, real estate, and financial service firms and in distressed company financing.

We believe that by imitating the stock picks of the smartest investors, such as D. E. Shaw and corporate insiders, investors are more likely to beat the market. Below we compiled a list of stocks both D. E. Shaw and insiders love. These are D. E. Shaw’s holdings with at least $100 Million and the Insiders column shows the number of unique insiders purchasing their companies’ stocks since the beginning of March.

Company

Ticker

Value (x1000)

Insider Purchases

YTD Return

MYLAN INC

MYL

441067

3

-15.6%

PROCTER & GAMBLE

PG

292992

1

-3.2%

EXXON MOBIL Calls

XOM

228849

1

-5.4%

ENDO PHARMA

ENDP

217240

1

-24.0%

EXXON MOBIL CORP

XOM

204630

1

-5.4%

PHILIP MORRIS INTL

PM

185966

1

12.2%

JPMORGAN CHASE

JPM

166746

6

-31.2%

JOHNSON & JOHNSON Calls

JNJ

144348

1

0.7%

WELLS FARGO

WFC

141741

2

-24.2%

DEVON ENERGY

DVN

136901

1

-29.2%

PFIZER INC

PFE

136450

1

1.8%

ALPHA NATURAL RES

ANR

134602

2

-66.8%

C V S CAREMARK

CVS

133422

1

-1.6%

ANADARKO PETROLEUM

APC

119127

1

-12.8%

SARA LEE CORP

SLE

117840

2

-0.3%

AMERICAN INTL GROUP

AIG

117658

1

-54.4%

UNITEDHEALTH GROUP

UNH

111123

1

29.5%

GENERAL ELECTRIC CO

GE

110820

1

-14.7%

SIMON PROPERTY GROUP

SPG

106027

1

14.1%

REGENCY CENTERS

REG

101879

2

-15.4%

YAHOO INC

YHOO

100559

2

-12.2%

D. E. Shaw’s largest position with three insider purchases is Mylan Inc. D. E. Shaw had $441 Million in MYL and three insiders, Heather Bresch, Robert Coury and Rodney Piatt, purchased a total of 35,000 shares of the stock in August. Mylan Inc. is a global generic and specialty pharmaceuticals company headquartered in Canonsburg, Pennsylvania. MYL has a market cap of $7.75B and a P/E ratio of 19.90. It lost 15.56% since the beginning of the year and lost 25.86% since the end of June. D.E Shaw and Ken Griffin both increased their position in MYL in the second quarter.

In the second quarter, D. E. Shaw initiated a brand new $106 million Simon Property Group position. Simon Property Group, Inc. is an American commercial real estate company, ranked #1 in the United States as the largest real estate investment trust. It has a market cap of $32.86B and a P/E ratio of 39.40. SPG returned 14.09% since the beginning of the year and lost 2.35% since the end of June. One insider, Daniel Smith, agreed and bought 600 shares of SPG on Aug 10. These recent activities might indicate a good investment at this time.

D. E. Shaw largely increased his position in Honeywell International Inc. by 2-fold in the second quarter, and he had $433 Million in XOM including calls at the end of June. Edward Whitacre bought 10,000 shares on Aug 11. Exxon Mobil Corporation is the parent of Esso, Mobil and ExxonMobil companies around the world. XOM has a market cap of $344.58B and a P/E ratio of 9.34. It lost 5.39% since the beginning of the year and 14.27% since the end of June. The stock might be undervalued at this time.

JPMorgan Chase has the biggest number of insider purchases since March. Six insiders bought the stock since then. J.P. Morgan is a leader in financial services, offering solutions to clients in more than 100 countries with one of the most comprehensive global product platforms available. It has a market cap of $118.30 billion and a P/E ratio of 6.48. It lost 29.49% since the beginning of this year. D.E Shaw increased 84% shares in JPM and held $166.7 million in JMP shares by the end of June. Obviously, D.E. Shaw was thinking that JPM was a good investment. Now many insiders joined him too. So this might be a great time to buy JPM because hedge funds and insiders agree that the stock is great potential.

Among all the stocks D.E Shaw and insiders like, UNH, SPG, PM PFE and JNJ achieved the highest return since July, while ANR, AIG, JPM, DVN and WFC performed worst. Although some of the stocks picked by D.E Shaw 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.

Source: D.E. Shaw And Insiders Love These Stocks