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Whitney Tilson is the founder and managing partner of T2 Partners LLC and the Tilson Mutual Funds. He has a Bachelor's degree in government from Harvard and an MBA with High Distinction from Harvard Business School. Before launching his investment career in 1999, Tilson spent five years working with Michael E. Porter, a professor at HBS, studying the competitiveness of inner cities and inner-city-based companies nationwide.

Hedge funds devote significant resources to researching stocks. They sometimes even cross the line to try to obtain material non-public information before investing. Additionally, corporate insiders have material non-public information and 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 stocks both Tilson and insiders are bullish on. All stocks are in T2 Partners’ portfolio at the end of June and were purchased by at least one insider during the past three months.

Company

Ticker

Value (x1000)

No. of Insiders

Return Since June

IRIDIUM COMM

IRDM

17319

1

-31.33%

KRAFT Calls

KFT

13630

2

-5.87%

HOWARD HUGHES CORP

HHC

11471

3

-39.91%

C I T GROUP

CIT

8925

2

-32.17%

GENERAL GROWTH PPTYS

GGP

7470

3

-31.04%

JOHNSON & JOHNSON Calls

JNJ

7370

1

-5.43%

RESOURCE AMERICA

REXI

6367

1

-23.97%

TWO HARBORS INVESTMENT

TWO

5643

8

-14.97%

DELIA S INC

DLIA

4851

4

-15.29%

INTERACTIVE BROKERS

IBKR

3208

1

-11.00%

GAMESTOP CORP

GME

2265

1

-10.50%

JPMORGAN CHASE

JPM

1828

5

-23.53%

BIGLARI HOLDINGS

BH

1377

1

-22.54%

SPARK NETWORKS INC

LOV

1234

1

-9.64%

TRANSATLANTIC PETE

TAT

1105

1

-51.76%

WELLS FARGO

WFC

1074

1

-12.31%

CHIMERA INVESTMENT

CIM

1038

7

-22.36%

Iridium Communications Inc (NASDAQ:IRDM): Iridium is a provider of mobile voice and data communications services. Tilson had $24.5 million IRDM stocks in total at the end of June. IRDM was purchased by one insider over the past three months and lost 31.33% since the end of June. It has a market cap of $437.77M. Peter J. Eichler Jr. also had $42 million of IRDM shares.

Kraft Foods Inc (KFT): Kraft Foods manufactures and markets packaged food products. Tilson had $13.6 million invested in KFT call options at the end of June. KFT was purchased by two insiders over the past three months and lost 5.87% since the end of June. It has a market cap of $58.72B and a P/E ratio of 19.08. Warren Buffett invested $3.5 billion in KFT. Bill Ackman and Nelson Peltz also both invested more than $600 million in KFT stocks (see Warren Buffett’s top stock picks).

Howard Hughes Corp (NYSE:HHC): Howard Hughes Corporation is a real estate company. Tilson increased his position in HHC by 50% to $11.5 million during the second quarter. HHC was purchased by three insiders over the past three months and lost 39.91% since the end of June. It has a market cap of $1.57B. Bill Ackman had $232 million invested in HHC. Murray Stahl and John Paulson also both invested over $100 million in HHC (check out Paulson’s portfolio).

CIT Group Inc (NYSE:CIT): CIT Group Inc. is a bank holding company. Tilson decreased his position in CIT by 26% to $8.9 million during the second quarter. CIT was purchased by two insiders over the past three months and lost 32.17% since the end of June. It has a market cap of $6.09B and a P/E ratio of 29.27. Bruce Berkowitz had $859 million of CIT stocks. Dan Loeb and many other hedge fund managers were also bullish about CIT.

General Growth Properties Inc (NYSE:GGP): GGP is a self-administered and self-managed real estate investment trust. Tilson decreased his position in GGP by 27% to $7.5 million during the second quarter. GGP was purchased by three insiders over the past three months and lost 31.04% since the end of June. It has a market cap of $11.33B.

Johnson & Johnson (NYSE:JNJ): Johnson & Johnson is engaged in the research and development, manufacture and sale of a range of products in the health care field. Tilson had $7.4 million invested in JNJ call options at the end of June. JNJ was purchased by one insider over the past three months and lost 5.43% since the end of June. It has a market cap of $58.72B and a P/E ratio of 19.08. Warren Buffett had $2.8 billion of JNJ stocks. Ken Fisher, Ric Dillon and Bill Miller were also main investors in JNJ (see billionaire Fisher’s top stock picks).

Resource America Inc (NASDAQ:REXI): Resource America, Inc. is a specialized asset management company. Tilson decreased his position in REXI by 1% to $6.4 million during the second quarter. REXI was purchased by one insider over the past three months and lost 23.97% since the end of June. It has a market cap of $86.21M.

Two Harbors Investment Corp (NYSE:TWO): Two Harbors is a real estate investment trust. Tilson decreased his position in TWO by 77% to $5.6 million during the second quarter. TWO was purchased by eight insiders over the past three months and lost 14.97% since the end of June. It has a market cap of $1.27B and a P/E ratio of 6.19. Ken Griffin and Andy Redleaf both had $15 million invested in TWO stocks.

Delia*s Inc (NASDAQ:DLIA): Delias is a direct marketing and retail company. Tilson had $4.9 million invested in DLIA stocks at the end of the second quarter. DLIA was purchased by four insiders over the past three months and lost 15.29% since the end of June. It has a market cap of $43.41M. Chuck Royce also invested $3.8 million in this stock.

Interactive Brokers Group (NASDAQ:IBKR): Interactive Brokers Group, Inc. operates as an automated global electronic market maker and broker. Tilson initiated a brand new $3.2 million of IBKR stocks over the second quarter. IBKR was purchased by one insider over the past three months and lost 11% since the end of June. It has a market cap of $639.74M. Chuck Royce also invested $18.6 million in IBKR.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: Whitney Tilson And Insiders See Value In These Stocks