David Einhorn and Insiders Are Bullish About These Stocks

Corporate insiders have material non-public information and they sometimes trade on such information. This type of insider trading is illegal and some insiders who act directly on material non-public information were caught. But there are still a certain number of insiders trading in the grey area. Even when insiders do not trade illegally, they still have an edge over ordinary investors because they understand their companies much better than others. It does not make sense for them to increase their exposure to their companies’ performance unless they know their purchases have high probability of being profitable.

GREENLIGHT CAPITAL

In this article, we are going to focus on the stocks that insiders and hedge fund manager David Einhorn love. Einhorn is the founder of Greenlight Capital, a long-short value-oriented hedge fund. During the market turmoil last year, the fund was up 5% through mid-December. His Green Mountain (GMCR) short position and the amazing performance of Seagate (STX) during the fourth quarter contributed to this result. Below we listed the stocks that are in Einhorn’s portfolio at the end of September and were purchased by at least one insider during the past three months.

Company Name Ticker Value Activity Insiders
APPLE INC AAPL 500756 22% 1
SPRINT NEXTEL S 224246 32% 1
BEST BUY BBY 163473 2% 1
LYONDELLBASELL LYB 52876 4% 4
FIFTH STREET FSC 18628 0% 3
EMPLOYERS HOLDINGS EIG 8465 -32% 2
FURIEX PHARMA FURX 6973 0% 5

The biggest position with an insider purchase in Einhorn’s portfolio is Apple Inc (AAPL). During the third quarter, Greenlight boosted its AAPL stakes by 22%. As of September 30, 2011, the fund had $500+ million invested in this stock. AAPL was also bought by one insider during the past three months. Robert Iger bought 1370 shares at $374.4856 on November 29. Iger bought another 1300 shares at $375.3292 on the same day. 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. At the end of the third quarter, there are 125 hedge funds with AAPL positions in their portfolios. For example, Rob Citrone’s Discovery Capital Management had $838 million invested in AAPL. Tiger cubs Stephen Mandel and Chase Coleman are also bullish about AAPL. Mandel’s Lone Pine Capital had $785 million invested in AAPL and Coleman’s Tiger Global Management LLC reported to own $646 million worth of AAPL shares.

Einhorn also increased his stakes in Sprint Nextel Corp (S) and Best Buy Company Inc (BBY). Greenlight increased its S position by 32% and its BBY position by 2% during the third quarter. At the end of September, the fund had $224 million invested in S and $163 million invested in BBY shares. Both stocks were bought by one insider during the past three months. Daniel Hesse bought 100,000 shares of S at $2.8158 on November 9. Lisa Caputo bought 402 shares of BBY at $23.66 on January 3, 347 shares at $26.91 on December 1, and another 358 shares at $25.4 at the beginning of November. Today, S in trading at $2.23 and BBY is priced at $24.59. Ken Griffin’s Citadel Investment Group also had $12 million invested in S and another $43 million invested in BBY.

Other stocks that Einhorn and insiders are bullish about include LyondellBasell Industries NV (LYB), Fifth Street Finance Corp (FSC), Employers Holdings Inc (EIG), and Furiex Pharmaceuticals Inc (FURX). Einhorn also likes CVS Caremark Corporation (CVS), General Motors Company (GM), and HCA Holdings Inc (HCA), which were bought by insiders over the past six months. Our past studies have shown that insider purchases on average outperform the market in the following 12-month period. We encourage investors to research these stocks that both Einhorn and insiders love for their own portfolios.

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

Qihoo 360 Technology Co Ltd (QIHU), Actavis plc (ACT), Yahoo! Inc. (YHOO) Among 20 Long Ideas from Sohn Canada

The 10 Laziest Countries in the World

The 10 Most Polluted Countries in the World

The 10 Most Dangerous Cities in America 2014

The Top 10 Gold Producing Countries in the World

The 10 Tallest Buildings in the World

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!