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Corporate insiders and hedge funds generally have an edge over ordinary investors.

Our research has shown that investors can beat the market by focusing on the top stock picks of insiders and successful fund managers. In this article, we are going to focus on the stocks that insiders and hedge fund managers Ken Griffin, Jim Simons, and David Einhorn are bullish about. The flagship funds of these three hedge fund managers outperformed average long/short equity hedge funds by at least 10 percentage points in 2011, and these hedge funds also outperformed the S&P 500 index.

Company Name

Ticker

HF Manager

Insiders

APPLE

(NASDAQ:AAPL)

Einhorn

1

LYONDELLBASELL

(NYSE:LYB)

Simons, Einhorn

1

WELLS FARGO

(NYSE:WFC)

Griffin

1

CONSOLIDATED EDISON

(NYSE:ED)

Simons

10

BEST BUY COMPANY INC

(NYSE:BBY)

Griffin, Einhorn

1

APACHE CORP

(NYSE:APA)

Simons

1

E Q T CORP

(NYSE:EQT)

Griffin

3

BLACKROCK INC

(NYSE:BLK)

Griffin, Simons

1

One of Ken Griffin's largest position with an insider purchase is Wells Fargo . Citadel had $103 million invested in this stock at the end of the third quarter. WFC was purchased by one insider during the past month. John Baker purchased 662 shares of WFC at $27.2599, 66 shares at $27.26, and another 248 shares at $27.2999 on December 28th. Now WFC is trading at $29.61 per share. It has a market cap of $156B and a relatively low P/E ratio of 10.97. At the end of the third quarter, there are 69 hedge funds with WFC positions. For example, Warren Buffett's Berkshire Hathaway had $8.7 billion invested in WFC. WFC gained 23.42% since the end of the third quarter, versus 14.91% for SPY in the same period.

Einhorn's biggest position with an insider purchase is Apple. During the third quarter, Greenlight boosted its AAPL stakes by 22%. Greenlight had $500+ million invested in this stock at the end of the third quarter. AAPL was also bought by one insider during the past three months. Robert Iger spent more than a million dollars on Apple shares. His average cost is around $375. Now AAPL is trading at $419.71 per share, up nearly 12%. The stock has a market cap of $393B and a P/E ratio of 15.30.

The largest position with an insider purchase in Simons' portfolio is Consolidated Edison Inc . During the third quarter, Renaissance Technologies significantly boosted its ED stakes by almost 400%. As of September 30, 2011, the fund had $97 million invested in ED shares. ED was also bought by 10 insiders during the past month.

There are three stocks that are favored by two hedge funds and corporate insiders: BlackRock Inc , LyondellBasell , and Best Buy. According to our past studies, insider purchases on average beat the market in the following 12-month period. We urge investors to research the stocks that both these successful hedge funds and insiders love for their own portfolios.

Source: Simons, Griffin, Einhorn And Insiders Are Bullish About These Stocks