Hedge Funds and Insiders Are Bullish On Citigroup and More

Consensus insider purchases, statistically, tend to be bullish signs for a stock (read more about studies on insider trading). While stocks bought by multiple insiders don’t always beat the market, we think that they can make for a good place to start looking for undervalued stocks. We also like to track hedge fund activity, and as a result we have put together a database of 13F filings from hedge funds and other notable investors. This allows us to rank stocks based on how popular they are among hedge funds. Here are ten stocks which had multiple insiders buy in the last three months and which also had more than 30 hedge funds and other notable investors in our database of 13f filings report a position:

Citigroup Inc. (NYSE:C) made our list of the ten most popular stocks among hedge funds during the third quarter of the year (see the full rankings). In addition, three insiders bought shares of the stock in the month of November at prices generally between $35.50 and $36.50 per share. Out of all the stocks we found with multiple insiders buying in the last three months, Citi had the strongest hedge fund interest.

The most popular energy stock among hedge funds was Kinder Morgan Inc (NYSE:KMI), a $37 billion market cap oil and gas pipeline company. Find more energy stocks hedge funds love. Two insiders have bought the stock in the last three months, including a large purchase in late October at an average price of about $34.75.

Steven Cohen

Auto parts company Visteon Corporation (NYSE:VC) has been popular among insiders, with three Board members buying the stock in the last three months; the most recent purchase was on December 17th at $50.40 per share. Billionaire Steve Cohen’s SAC Capital Advisors increased its stake in the company during the third quarter (see more of Cohen’s stock picks).

Valeant Pharmaceuticals Intl Inc (NYSE:VRX) counted a number of hedge funds among its owners at the end of September, among them Viking Global. This fund is managed by Tiger Cub Andreas Halvorsen (check out Halvorsen’s favorite stocks). The specialty pharmaceuticals company had three insiders buy the stock in November, though the stock price is up about 10% since that time.

Multiple insiders bought $10 billion market cap regional bank Regions Financial Corporation (NYSE:RF) in late October and early November. Billionaire James Dinan and the investment team at York Capital Management added shares during the third quarter and Regions was one of its ten largest 13F holdings by market value (see more stocks York was buying).

Billionaire activist investor Carl Icahn took a position in troubled natural gas producer Chesapeake Energy Corporation (NYSE:CHK) earlier this year after the stock price fell in reaction to concerns that the company might need to sell assets to make cash flow for the year- and have to settle for fire sale prices. See more of Icahn’s projects. It’s become a fairly popular hedge fund pick, and two different Board members made large purchases in November.

Our database of insider trading filings also shows multiple insiders buying The Home Depot, Inc. (NYSE:HD) in the last three months. Fisher Asset Management, managed by billionaire Ken Fisher, was one of the hedge funds who also thought the stock was a good value; the fund bought heavily last quarter and closed September with 8.2 million shares in its portfolio.  Find more stocks Fisher was buying.

Apache Corporation (NYSE:APA) had three insiders buy stock since the beginning of November; though in one case the purchase was fairly small, we’d still consider it to be a target of consensus insider buying. Boykin Curry’s Eagle Capital Management reported a position of 3.4 million shares in its 13F filing.

Hedge funds’ favorite food stock during the third quarter was Mead Johnson Nutrition CO (NYSE:MJN) (research more of hedge funds’ favorite food stocks). The infant formula and children’s nutrition company has had two insiders buy in the last three months, at an average price of about $62.50.

Weatherford International Ltd (NYSE:WFT), an oil and gas equipment and services company, rounded out our list of stocks liked by insiders and by hedge funds. Several insiders bought the stock in mid November, while billionaire Dan Loeb’s Third Point was one of the hedge funds reporting a position. See Dan Loeb’s stock picks.