Insiders and Billionaire David Tepper Are Bullish on American International Group Inc (AIG) and More

Tepper and his team cut their stake in JPMorgan Chase & Co. (NYSE:JPM) between January and March, but the filing still disclosed ownership of 1 million shares. Considerable purchases by funds tied to a JPMorgan Chase insider took place in early May at prices a bit above $47. Even after a nearly 60% gain in the last year, the bank is valued right about at book. While revenue growth has not been very good recently- up only 1% last quarter compared to the first quarter of 2012- the earnings multiples are low and so we think that JPMorgan Chase also has value potential. Fisher Asset Management, managed by billionaire Ken Fisher, is one major shareholder in JPMorgan Chase (research more stocks Fisher owns).

According to the filing, Appaloosa owned 7.4 million shares of Mueller Water Products, Inc. (NYSE:MWA), a $1.2 billion market cap provider of valves and hydrants used in water systems. We tracked multiple insiders buying the stock in early May at prices of about $7 per share. The stock has more than doubled in the last year, which has brought it to a fairly premium valuation: the trailing and forward P/Es are 44 and 23, respectively. Revenue was up 13% in its most recent quarter compared to the same period in the previous fiscal year.

Another stock that multiple insiders have been buying is oil and gas company Hess Corp. (NYSE:HES), where billionaire Paul Singer’s Elliott Management has been pushing for changes in corporate strategy (more broadly, energy stocks have been ripe targets for activist involvement so far this year). Tepper bought about 480,000 shares during Q1 after not having owned any shares at the beginning of the year. Sell-side expectations for 2014 imply a forward P/E of 11, which is about in line with where larger oil and gas companies are trading.

Disclosure: I own no shares of any stocks mentioned in this article.