Insiders Bullish on Apple Inc. (AAPL), Other Key Picks From David Einhorn

Page 1 of 2

At Insider Monkey, we track hedge fund and insider buying activity because these indicators are two of the best ways to accurately gauge the “smart sentiment” surrounding a stock. Generally speaking, corporate executives of mid to smaller-cap companies have a better understanding of their businesses, and our studies prove this. We’ve shown that retail investors can beat the market by 7 percentage points a year by simply following bullish insider trading, and this outperformance stretches to the hedge fund industry as well.

Our Billionaire Hedge Fund Index—created in collaboration with MarketWatch—returned 24.3% last year, beating the S&P 500 ETF (NYSEARCA:SPY) by a handy 8.3 percentage points. In layman’s terms, this indicates that the cream of the crop’s consensus picks can outpace the market, but it’s worth noting that longer-range studies show that the most alpha can be generated from the small-cap space (learn how to use this market-beating strategy yourself).

GREENLIGHT CAPITAL David Einhorn

With this in mind, ardent investors would be best served by determining hedgies’ favorite stock picks that have also been supported by insiders in the last 90 days. One of the most prominent hedge fund managers today is David Einhorn, so it’s worth taking a look. Einhorn’s fund, Greenlight Capital, has returned near 20% annually since its inception in 1996.

According to his latest 13F filing with the SEC, Apple Inc. (NASDAQ:AAPL) has been Einhorn’s No. 1 holding since the third quarter of 2011. Greenlight recently issued a press release showing its displeasure with Cupertino’s capital allocation plans, and it’s likely that many investors agree with Einhorn when he says “Apple Inc. (NADSAQ:AAPL) must examine all of its options to unlock the growing value of its balance sheet for all shareholders.”

Director Robert Iger’s decently sized round of purchasing activity last November has been in vain thus far, but a PEG of 0.75 and a forward earnings multiple below 9.0x indicates that there’s an obvious value play here. A dividend boost or a strengthened share buyback would likely draw more investors into Apple Inc. (NASDAQ:AAPL), and the company’s “secret” hedge fund may be preparing for just such an event.

General Motors Company (NYSE:GM), meanwhile, is a favorite pick of both Einhorn and Warren Buffett (see Buffett’s top stock picks here), and has seen two insiders buying in the past six months. GM has risen more than 11% since the latest exec—Thomas Schoewe—bought shares in November of last year. At 1.07 times its book value, there’s no denying this automaker’s stock is cheap at the moment, and beats in four of its last five earnings reports have investors optimistic on the toes of next week’s Q4 earnings report.

Who’s the best of the rest aside from GM and Apple Inc. (NASDAQ:AAPL)?

Page 1 of 2
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

5 Retirement Mistakes To Avoid (and Einstein’s Famous Quote)

11 Smartest People in the World

6 Films About the Financial World You Need To Watch (While “The Wolf” is Not Around)

Warren Buffett and Billionaires Are Crazy About These 7 Stocks

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top Businesses to Invest In

Top 5 Things You Might Be Doing Wrong With Your Business

Top 5 Strategic Technology Trends in 2014

Top Rags to Riches Stories

Parenting Behavior That Promotes Future Leaders

Top 5 Mistakes Made by Small Businesses

Top 5 Most Common and Potentially Devastating Financial Blunders

Top 5 Highest Paying Jobs for Web Designers

Top 6 Most Respected Professions that Also Pay Well

Top 5 Pitfalls Investors Should Avoid

Top 6 Lawyers and Policy Makers Under 30

Top 6 New Year’s Resolutions for Entrepreneurs

Top 7 Locations to Check in on Facebook

Top 5 Mistakes made by Rookie eBay Sellers

Top 7 eBook Publishers in 2013

Top 6 Health Industry Trends in 2014

5 Lessons for Entrepreneurs from Seth Godin

Top 5 Success Tips from Jordan Belfort – the Wolf of Wall Street

Best Master’s in Finance Degree Programs

Top 6 Earning Celebrities Over 50

The most expensive sports to play

Top 7 Earning Celebrities Under 25

Best 7 Online Courses to Take: Free Finance MOOCs

Top 6 Bad Habits that Promote Failure

20 Most Valuable Soccer Teams in the World in 2013

12 Most Expensive Countries for Foreign Students

Top 30 Most Influential Women in the World

Top 20 Most Expensive New Year Eve Shows

Top 5 Best Vocational Careers

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!