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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.

In this article we will focus on the stocks Jim Cramer recommended over the past month that are also purchased by corporate insiders. Jim Cramer tends to invest in momentum stocks, which may go down significantly after a disappointing quarter. We believe that by focusing on Cramer’s stock picks, especially stocks with insider purchases, investors are more likely to beat the market.

Below is a list of stocks Jim Cramer recommended in the past month that were purchased by at least two insiders over the past three months.

Company

Insiders

YTD Return

Accuride (NYSE:ACW)

10

-63.42%

Chesapeake Energy (NYSE:CHK)

5

3.41%

JPMorgan Chase (NYSE:JPM)

5

-29.19%

Ligand Pharmaceuticals (NASDAQ:LGND)

5

55.06%

Morgan Stanley (NYSE:MS)

5

-49.55%

CenturyLink (NYSE:CTL)

4

-23.88%

Dana Holding (NYSE:DAN)

4

-39.43%

Exco Resources (NYSE:XCO)

4

-41.12%

SandRidge Energy (NYSE:SD)

4

-19.89%

Whiting Petroleum (NYSE:WLL)

4

-38.83%

Cliffs Natural Resources (NYSE:CLF)

3

-31.52%

Continental Resources (NYSE:CLR)

3

-16.79%

Diamond Foods (NASDAQ:DMND)

3

54.06%

Honeywell (NYSE:HON)

3

-16.79%

Linn Energy (NASDAQ:LINE)

3

-0.98%

Fossil (NASDAQ:FOSL)

2

31.59%


Accuride (ACW): Accuride Corporation is engaged in manufacturers and suppliers of commercial vehicle components in North America. ACW was purchased by 10 insiders over the past three months and lost 63.42% since the beginning of this year. It has a market cap of $260.08M. David Gallo had $23 million invested in ACW.

Chesapeake Energy (CHK): Chesapeake is a producer of natural gas and oil and natural gas liquids in the United States. CHK was purchased by 5 insiders over the past three months and returned 3.41% since the beginning of this year. It has a market cap of $17.76B and a P/E ratio of 24.12. Mason Hawkins had $2.6 billion of CHK shares (see Mason Hawkins’ top stock picks).

JPMorgan Chase (JPM): JPMorgan Chase is a financial holding company. JPM was purchased by 5 insiders over the past three months and returned -29.19% since the beginning of this year. It has a market cap of $123.09B and a P/E ratio of 6.74. Both Jonathon Jacobson and Lee Ainslie had over $400 million invested in JPM. Andreas Halvorsen also invested $391 million in JPM.

Ligand Pharmaceuticals (LGND): Ligand is a biotechnology company. LGND was purchased by 5 insiders over the past three months and returned 55.06% since the beginning of this year. It has a market cap of $274.44M. Dan Loeb had $8.4 million invested in LGND (check out Dan Loeb’s top stock picks).

Morgan Stanley (MS): Morgan Stanley is a global financial services firm. MS was purchased by 5 insiders over the past three months and lost 49.55% since the beginning of this year. It has a market cap of $28.98B and a P/E ratio of 24.95. Eric Mindich and Janathon Jacobson both invested over $300 million in MS.

CenturyLink (CTL): CenturyLink is an integrated communications company. CTL was purchased by 4 insiders over the past three months and returned -23.88% since the beginning of this year. It has a market cap of $20.82B and a P/E ratio of 14.32. Phill Gross and Robert Atchinson, and Steven Cohen invested over $100 million in CTL (see Steve Cohen’s top stock picks).

Dana Holding (DAN): Dana Holding is a supplier to vehicular, off-highway, and industrial manufacturers. DAN was purchased by 4 insiders over the past three months and lost 39.43% since the beginning of this year. It has a market cap of $1.64B and a P/E ratio of 133.25. Jeffrey Altman had $145 million of DAN shares.

Exco Resources (XCO): Exco is an independent oil and natural gas company. XCO was purchased by 4 insiders over the past three months and returned -41.12% since the beginning of this year. It has a market cap of $2.45B and a P/E ratio of 26.00. Wilbur Ross had $371 million of XCO shares.

SandRidge Energy (SD): SandRidge is an independent oil and natural gas company. SD was purchased by 4 insiders over the past three months and lost 19.89% since the beginning of this year. It has a market cap of $2.48B. Wallace Weitz had $59 million of SD shares. T Boone Pickens also had $21 million of SD.

Whiting Petroleum (WLL): Whiting Petroleum Corporation is an independent oil and gas company. WLL was purchased by 4 insiders over the past three months and returned -38.83% since the beginning of this year. It has a market cap of $4.29B and a P/E ratio of 15.17. Lee Ainslie invested $230 million in WLL. Ken Griffin, Steven Cohen, Ric Dillon and D. E. Shaw were also main investors in the stock.



Disclosure: I am long CHK, MS, CTL.

Source: Jim Cramer And Corporate Insiders Are Bullish About These Stocks