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We track corporate insiders because we believe that they have an edge over ordinary investors. Insiders always understand their companies and their industries much better than other investors, and they sometimes have material non-public information. Even if they do not act directly on material non-public information, they can still benefit from such information by delaying their purchases or sales when they know bad or good news is about to be released. Therefore, we encourage investors to pay attention to the trades made by corporate insiders.

Below we compiled a list of consumer goods stocks that insiders are bullish about. All companies have at least $2 billion market cap and were purchased by at least one insider in the past three months. The market data is sourced from Finviz.

Ticker

Company

Insiders

BEAM

Beam, Inc.

1

CLX

The Clorox Company

1

CRI

Carter's, Inc.

1

DAN

Dana Holding Corporation

1

HAR

Harman International Industries Inc.

1

K

Kellogg Company

1

KO

The Coca-Cola Company

1

LO

Lorillard, Inc.

1

MJN

Mead Johnson Nutrition Company

1

PG

Procter & Gamble Co.

1

PM

Philip Morris International, Inc.

1

RAI

Reynolds American Inc.

1

ATR

AptarGroup, Inc.

2

ECL

Ecolab Inc.

2

F

Ford Motor Co.

2

OI

Owens-Illinois, Inc.

2

SEE

Sealed Air Corporation

2

GMCR

Green Mountain Coffee Roasters Inc.

3

WHR

Whirlpool Corp.

4

Among these stocks, Owens-Illinois Inc was purchased by two insiders during the past month. On January 11, Director David Ho purchased 820 shares at $21.51 per share. Another director, Helge Wehmeier, also bought 1,159 shares at about $21.6 per share on the same day. Now OI is trading at $24.4 per share. It has a market cap of $4B and a P/E ratio of 22.6. The manufacturer of glass containers reported total revenues of $7.4 billion for 2011, up from $6.6 billion in 2010. At the end of the third quarter, 21 hedge funds disclosed to own OI in their 13F portfolios. For example, Thomas Steyer's Farallon Capital initiated a brand new $154 million position in OI over the third quarter.

Ford Motor Co was also purchased by two insiders during the past three months. Clay William Ford purchased 25,000 shares at $9.89 on November 21. Ford also purchased 50,000 shares at around $10 in September. Another director Irvine Hockaday also bought 3,000 shares at $11.1789 in early November. F is now trading at $12.29 per share. It has a market cap of $49B and a low P/E ratio of only 7.7. It is a popular stock among hedge funds. There were 43 hedge funds with F positions at the end of September. For instance, Ken Heebner's Capital Growth Management had $135 million invested in F at the end of the third quarter.

One mega-cap consumer stock with an insider purchase over the past three months is The Coca-Cola Company. At the beginning of November, Barry Diller, director at Coca Cola, bought 100,000 shares at $67.1129. Diller also purchased 235,000 shares of KO at the end of February last year at $64.438 per share. KO is now trading at $67.35. It has a market cap of $154B and a P/E ratio of 12.52. The beverage company is quite popular among hedge funds. As of September 30, 2011, there were 44 hedge funds reported to own KO in their 13F portfolios. Billionaire Warren Buffet is the most bullish hedge fund manager about KO. Berkshire Hathaway had $13.5 billion invested in KO at the end of the third quarter. Boykin Curry, Stephen Mandel, Cliff Asness and Louis Navellier were also bullish about KO.

Other large-cap consumer stocks insiders are buying include Kellogg Company, Lorillard Inc, Mead Johnson Nutrition Company, Procter & Gamble, Philip Morris International Inc., Reynolds American Inc. and Ecolab Inc. According to our past studies, insider purchases on average outperform the market over the next 12-month period. Insiders usually have a lot of exposure to their companies' performance. They usually increase their exposure when they know that their purchases have a high probability of being profitable. We believe that by imitating the insider purchases, investors will be more likely to beat the market in the long term.

Source: 19 Consumer Goods Stocks Insiders Recently Bought