Warren Buffett and Insiders are Betting On General Motors Company (GM) & More

Page 1 of 2

Quarterly filings from Warren Buffett’s Berkshire Hathaway are highly anticipated in the financial community- many investors and market watchers are at least somewhat curious what Buffett has been doing, and may find some of his picks to be interesting initial ideas. We track Berkshire’s filings over time, alongside with those of hundreds of other notable investors including hedge funds, as part of our work developing investment strategies. Our research shows that the most popular small cap stocks among hedge funds earn an average excess return of 18 percentage points per year (learn more about our small cap strategy) and our own portfolio following this strategy outperformed the S&P 500 by 33 percentage points in the last 11 months.

We can refine Buffett’s picks further by looking for stocks which have seen recent insider purchases, as stocks bought by insiders tend to narrowly outperform the market on average (read our analysis of studies on insider trading). This serves as a good screen for stocks which investors may find to be good values. Read on for our quick take on four stocks in Berkshire’s portfolio (see Buffett’s picks over time) which at least one company insider has bought since the beginning of April:

Leading our list is General Motors Company (NYSE:GM); an insider was buying the automaker in May, and during Q2 Buffett increased his holdings by 60% to more than $1 billion worth of its stock. General Motors Company (NYSE:GM) has struggled recently, with earnings declining by over 20% last quarter compared to the second quarter of 2012. Bulls argue that U.S. consumers have pent-up demand for autos, as their cars are old by historical standards, and that Europe will recover over the next few years. Wall Street analysts, in line with this optimism, are forecasting enough earnings per share going forward that General Motors Company (NYSE:GM) trades at 8 times forward earnings estimates and at a five-year PEG ratio well below 1. General Motors Company (NYSE:GM) was the fourth most popular stock among hedge funds last quarter (check out the full top ten list).

Berkshire was also adding shares of National-Oilwell Varco, Inc. (NYSE:NOV) last quarter, and we had also recorded an insider purchase at the $31 billion market cap oilfield equipment and services company. Higher costs have offset revenue growth at National Oilwell Varco, and as a result profits have declined from their levels a year ago. The stock has also slipped (against a rising market) as a result.

Warren Buffett

The sell-side is forecasting a weak recovery for the business, resulting in both trailing and forward P/Es in the 12-13 range. Billionaire Richard Chilton’s Chilton Investment Company reported a position of about 950,000 shares in National Oilwell Varco in its own 13F (find Chilton’s favorite stocks).

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

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

The 5 Most Expensive Cars To Insure in the World

The 10 Most Common Genetically Modified Foods

10 Self-Made Billionaires Who Came From Nothing

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

4 BuzzWorthy Cannabis Stocks And Some Smoking Derivative Plays

The 10 Healthiest Fast Food Chains in America to Dine At

The 5 Most Expensive Cat Food Brands You Can Spoil Your Kitty With

The 6 Best eCommerce Platforms for Small Businesses

The 10 Worst Mistakes an Entrepreneur Can Make

The 5 Most OP Characters in League of Legends to Carry Games and Crush Foes With

The 5 Best Foods to Eat Before Running that Will Help You Pound the Pavement

10 Glaring Plot Holes in The Walking Dead that a Zombie-Filled Bus Could Drive Through

The 5 Biggest Celebrity Stoners Who Love Their Reefer

The 10 Most Overrated Movies Of All Time by Out-of-Touch Critics

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

How to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

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!