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Corporate insiders know their companies and the industry much better than normal investors. It isn’t a secret that they sometimes trade on the material non-public information they have. Though such trades are prohibited, there are still a few insiders trading in the grey area. Academic studies have shown that when corporate insiders purchase the stocks of their companies, it usually means that the stock is trading below its intrinsic value.

It is a good strategy to monkey the investments of insiders, and it is even smarter to cross reference the stock picks of insiders and the famous hedge fund managers like Jim Simons. This billionaire owns 25 to 50 percent of Renaissance Technologies and is the largest investor in Medallion Fund, one of the funds managed by Renaissance and the best hedge fund tracked by Insider Monkey.

Below we compiled a list of stocks both Simons and insiders are bullish about. All companies have more than $5 billion market cap and were purchased by at least two insiders during the past month.

Company Name

Ticker

Value

Activity

Insiders

VECTOR GROUP LTD

VGR

78281

17%

3

GREEN MOUNTAIN COFFEE

GMCR

47694

-6%

3

HOLLYFRONTIER CORP.

HFC

31668

New

2

LYONDELLBASELL

LYB

24647

-8%

4

QLT INC

QLTI

23281

1%

2

SEALED AIR CORP

SEE

15792

82%

2

TEREX CORP NEW

TEX

8834

-4%

3

INERGY L P

NRGY

8726

New

2

MASIMO CORP

MASI

7114

New

2

KRONOS WORLDWIDE

KRO

6274

31%

3

FIRST CITIZENS BANCSH

FCNCA

6057

-9%

3

MEDASSETS INC

MDAS

5617

67%

2

QUINSTREET INC

QNST

5400

88%

2

RED ROBIN GOURMET BUR

RRGB

5200

154%

3

HAEMONETICS CORP MASS

HAE

5170

104%

4

The largest position in the 13F portfolio of Simons’ Renaissance Technologies at the end of September, with more than 2 insider purchases during the past month, was Vector Group (NYSE:VGR). Renaissance reported to own $78 million worth of the stock at the end of the third quarter, up 17% from the end of June. Three insiders, Richard Lampen, Howard Lorber, and Phillip Frost, purchased VGR over the past month. They all bought the stock on November 22 at $17.075 per share. Now VGR is trading at $17.98.

During the third quarter, Simons’ Renaissance Technologies bought new stakes in HollyFrontier Corp (NYSE:HFC). According to the latest 13F of the fund, it initiated a brand new $32 million position in HFC shares over the third quarter. HFC was also purchased by two insiders during the past month. On November 21, two directors of the company, Frankli Myers and Michael Jennings, purchased 2,444 shares in total at $23.6 and $24.106 respectively. Now HFC is trading at $24.47. Steven Cohen’s SAC Capital and Dan Loeb’s Third Point also opened new HFC position during the third quarter.

Lyondellbasell Industries Nv (NYSE:LYB) was bought by four insiders during the past month, the stock with the largest number of insider purchased on the list above. Simons also had $24.6 million invested in this stock at the end of September. Apollo Management Holdings, the large shareholder of the company, continuously bought the stock in November. Apollo bought more than 6 million shares in total during the past month, at prices ranging from $28.6 to $34.99. Jagjeet Bindra, Marvin Schlanger, and Robin Buchanan, three directors at Lyondellbasell, also bought thousands shares of the stock at $30 to $35 in November. Now LYB is trading at $32.80.

Other stocks both Simons and corporate insiders are bullish about include Green Mountain Coffee Roasters (NASDAQ:GMCR), QLT Inc (NASDAQ:QLTI), Sealed Air Corp (NYSE:SEE), Terex Corp (NYSE:TEX), Inergy Lp (NRGY), Masimo Corp (NASDAQ:MASI), Kronos Worldwide Inc (NYSE:KRO), and First Citizens Bancshares Inc (NASDAQ:FCNCA). Academic studies on insider trading have shown that imitating insiders outperforms the market when there are several insiders purchasing. We urge investors to take a closer look at these stocks that are favored by insiders and Jim Simons’ Renaissance.

Philip Morris (NYSE:PM), Schlumberger (NYSE:SLB), Lorillard (NYSE:LO) and JP Morgan (NYSE:JPM) are among the stocks that didn’t make our list, either because there was only a single insider purchase, or the transactions were made more than a month ago. Jim Simons has huge positions in these companies, though, and we believe they deserve a closer look too.

Source: Billionaire Jim Simons And Insiders Are Bullish About These Stocks