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Hedge funds devote significant resources to researching stocks. They sometimes even 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 perhaps 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 that hedge funds and insiders are bullish about. All stocks are bought by hedge funds recently through 13G and 13D transactions, meaning that the hedge fund exceeded a 5% threshold of outstanding shares of the company. These stocks were also purchased by at least one insider over the past three months.

Ticker

Company

No. of Insiders

YTD Return

OI

Owens-Illinois, Inc.

4

-37.62%

CLWR

Clearwire Corporation

3

-68.16%

KRA

Kraton Performance Polymers

3

-43.49%

LNCR

Lincare Holdings Inc.

3

-10.29%

NAV

Navistar International Corp.

3

-28.22%

SHO

Sunstone Hotel Investors Inc.

3

-37.66%

SUSQ

Susquehanna Bancshares, Inc.

3

-34.30%

EEE

Evergreen Energy, Inc.

2

30.77%

ARII

American Railcar Industries

1

-7.18%

AXL

American Axle & Mfg Holdings

1

-29.39%

BGC

General Cable Corp.

1

-24.02%

DAVE

Famous Dave's of America

1

-27.89%

MCP

Molycorp, Inc.

1

-26.19%

POL

PolyOne Corporation

1

-10.19%

TRMS

Trimeris Inc.

1

23.17%

WSM

Williams-Sonoma Inc.

1

6.90%

Here are the 8 stocks on the list above with market caps over $1 billion.

Williams-Sonoma Inc. (NYSE:WSM): Williams-Sonoma, Inc. is a specialty retailer of products for the home. WSM was purchased by one insider over the past three months and returned 6.90% since the beginning of this year. Adrian Dillon bought 2,600 shares of the stock at slightly below $31 on October 6. It seems like Dillon knows when to buy his company’s stock. The stock is now trading at $37.66. It has a market cap of $3.9B and P/E ratio of 18.37. Stephen Mandel’s Lone Pine Capital LLC reported on September 30 that the firm had purchased 5.8 million shares of WSM and now controls 5.6% stake of the stock. Chuck Royce and Cliff Asness also both had over $25 million invested in WSM at the end of the second quarter.

Owens-Illinois, Inc. (NYSE:OI): Owens-Illinois, Inc. is a manufacturer of glass containers, with 81 glass manufacturing plants in 21 countries. OI was purchased by four insiders over the past three months and lost 37.62% since the beginning of this year. Helge Wehmeier, Director of the company, bough 1,809 shares at $14.67 on October 5. Prior to that, he also bought 5,000 at $18.47 on August 15. David Ho also purchased 1,210 shares of the stock at $14.67 on October 5. Other insiders who purchased the stock include Richard Crawford and Albert Stroucken. OI is currently trading at $19.15 per share. It has a market cap of $3.1B and P/E ratio of 17.73. According to the 13D filing of Atlantic Investment Management on October 12th, the firm increased its activist position in the stock to 8.4 million shares and now controls 5.1% activist stake in OI.

Molycorp, Inc. (NYSE:MCP): Molycorp is a rare earth oxide producer. MCP was purchased by one insider over the past three months and lost 26.19% since the beginning of this year. Mark Smith, president and CEO at Molycorp, bought 4,200 shares of the stock at $59.02 on August 15. Unfortunately, MCP lost 37.58% since then vs. a positive return of 2.54% for SPY during the same period. MCP has a market cap of $3.1B and P/E ratio of 147.32. According to JAT Capital Management’s passive 13G filed on October 3, it now had 5.07 million shares of MCP, controlling 6% stake of the stock.

Navistar International Corp. (NYSE:NAV): Navistar is a manufacturer of vehicles. NAV was purchased by three insiders over the past three months and lost 28.22% since the beginning of this year. In September, three directors of the company, Steven Klinger, Diane Gulyas, and Stanley McChrystal bought 2,000, 1,300, and 1,400 shares of NAV respectively at $33.63, $36.97 and $36.99 per share respectively. NAV is currently trading at $41.57. NAV has a market cap of $3.0B and P/E ratio of 2.12. Carl Icahn’s Icahn Capital filed 13D on October 13 for its 9.8% activist stake in the stock. The firm now has 7.11 million shares in NAV, including shares underlying call options. Jeffrey Altman had $388 million invested in NAV at the end of June.

Lincare Holdings Inc. (NASDAQ:LNCR): Lincare is a provider of oxygen and other respiratory therapy services to patients in the home. LNCR was purchased by three insiders over the past three months and lost 10.29% since the beginning of this year. John Byrnes bought 25,000 shares at $20.86 on September 19. Prior to that, Chester Black, another director of the company, purchased 11,400 shares of LNCR in total on September 2 at slightly higher than $20 per share. The CFO of Lincare, Paul Gabos, also bought 25,000 shares at $20.22 on August 22. LNCR is currently trading at $23.56 – about three dollars higher than its price when the insiders purchased it. It has a market cap of $2.1B and P/E ratio of 12.29. Larry Robbins’ Glenview Capital revealed on October 11 that it owned 5.73 million shares in LNCR, corresponding to a 6.14% ownership stake.

Clearwire Corporation (CLWR): Clearwire is a provider of 4G wireless broadband services. CLWR was purchased by three insiders over the past three months and lost 68.16% since the beginning of this year. William Blessing purchased 10,000 shares of CLWR at $1.7 on October 7. Jose Collazo and John Stanton, two other directors of the company, purchased 72,000 and 275,500 shares respectively in August. Their purchase prices ranged from $1.78 to $2.75 per share. Unluckily, CLWR is currently trading at $1.64 per share. It has a market cap of $1.5B. Lee Hobson’s Highside Capital filed 13G on October 17, revealing that it now has 16.17 million shares of CLWR and controls 6.5% stake of the stock. John Brennan’s Sirios Capital Management initiated a brand new $32 million CLWR during the second quarter.

General Cable Corp. (NYSE:BGC): General Cable Corporation is engaged in the development, design, manufacture, marketing and distribution of copper, aluminum and fiber optic wire and cable products. BGC was purchased by one insider over the past three months and returned -24.02% since the beginning of this year. Emmanuel Sabonnadiere bought 1,415 shares at $30.2 on August 31. Prior to that, he bought 2,172 shares at $30.92 on November 23 last year. Since the end of August, BGC lost 10.11% while the market returned 1.65%. It has a market cap of $1.4B and P/E ratio of 11.11. Eric Bannasch’s Cadian Capital continued making purchase in BGC and passed the 5% threshold on September 27. It owns 2.95 million shares BGC, corresponding to a 5.65% stake of the outstanding shares. Besides Bannasch, David Dreman is another main investor in BGC. His Dreman Value Mangement owned $41 million BGC shares at the end of second quarter.

PolyOne Corporation (NYSE:POL): PolyOne provides specialized polymer materials, services and solutions. POL was purchased by one insider over the past three months and lost 10.19% since the beginning of this year. Richard Lorraine, director at Polyone, purchased 422 shares at $11.86 on August 8. POL lost 5.53% since then, underperforming the market by 15 percentage points. It has a market cap of $1.0B and P/E ratio of 4.57. Debra Fine’s Fine Capital Partners disclosed on September 19 that they now had 5.4 million shares of POL, corresponding to 5.8% stake of POL’s shares outstanding. Chuck Royce had $11 million invested in POL at the end of June.

Source: Hedge Funds And Insiders Are Crazy For These Stocks