Top Stocks With Insider Buying, Buybacks

Updated from 7:07 a.m. EDT

At Stockpickr.com, we strive to keep track of insider purchasing and buybacks each week. Here's the perfect setup in my mind: insiders buying the stock, the company buying back its own shares and a super-investor like Warren Buffett also buying shares. If I can get three out of three, I'm in heaven. If I can get two out of three, or even one out of three, I'm still pretty happy about the situation, particularly if the stock is cheap in other ways as well.

Each Thursday we update the Stockpickr Top 10 Insider Purchases and Buybacks portfolio, featuring stocks that recently have seen big insider purchases or new buyback programs as well as super investors accumulating shares.

Qualcomm (QCOM Quote) makes the list thanks to a new $2 billion stock-buyback program the San Diego-based company initiated a couple of weeks ago. This new plan replaces the company's previous $3 billion buyback, which has just $2 million of buying power remaining.

The world's second-largest maker of cell-phone chips also said that it will increase its quarterly dividend 14% to 16 cents from 14 cents a share. Since 2003, the company has returned $8.5 billion to shareholders through buybacks and cash dividends.

On Jan. 23, Qualcomm reported first-quarter earnings of 46 cents a share, a 21% jump from the same period last year. During the quarter, the company earned $767 million, an 18% year-over-year increase, and revenue of $2.44 billion. The quarter was highlighted by strong demand for cell phones with Internet access that allow the user to download music and videos. The impressive results came against legal battles with rival Broadcom (BRCM Quote), which ban Qualcomm from selling some chips that infringe on Broadcom patents.

Oppenheimer Research expects Qualcomm's earnings to improve over the next 12-18 months and raised its price target for the stock from $46 to $52. The firm is positive on the stock because the company's legal battles should be clearing up soon, it continues to gain market share in 3G chips, and has the potential for robust EPS growth due to strong demand for smartphones.

We also like Qualcomm because Moore Capital owns the stock. Moore Capital is a group of hedge funds with more than $10 billion in assets run by famed trader Louis Bacon. Moore recently opened positions in CA (CA Quote) and Teradata (TDC Quote).

Duquesne Capital is another noteworthy fund that holds Qualcomm shares. The $4 billion investment fund was started by Stanley Druckenmiller, a protege of George Soros. The fund also likes JPMorgan (JPM Quote) and Suncor Energy (SU Quote).

So with Qualcomm, we have a buyback, increased dividend, price targets $12 north of where the stock trades now and two well-known investors in the stock. It may be time to take a closer look at Qualcomm.

Next on the list is American Tower (AMT Quote). The wireless and broadcast communications infrastructure company recently announced a plan to repurchase up to $1.5 billion in common stock.

The Boston-based company also provided a full-year 2008 outlook with rental and management segment revenue between $1.52 billion and $1.54 billion. Network development services segment revenue is projected to be in the range of $35 million to $50 million and income from operations during 2008 is expected to be between $126 million and $143 million.