At Stockpickr.com we keep track of the Top 10 Insider Purchases and Buybacks each week.
Despite the stock market's strong move higher, we continue to see boards of directors of various companies initiate stock-buyback programs, whereby they are publicly hinting that they believe their stocks offer the best value for idle cash.
The same can be said for insider purchases. Whether it's CEOs or directors who are putting up their own cash to buy shares of stock in their respective companies, they are signaling to the public that they are confident there is upside value to be found.
These types of purchases, on top of piggybacking other smart investors, offer a nice starting point for finding your next buying opportunity.
makes this week's portfolio because the packaged food supplier recently added $500 million to its stock-buyback plan. And in another recent move to return capital to shareholders, the company bumped its quarterly dividend to 19 cents a share from 18 cents a share.
The Omaha, Neb.-based company recently announced solid first-quarter results, posting earnings of 34 cents a share, up from 26 cents a share last year and well ahead of the Street's 29-cent estimate. Popular brands such as Chef Boyardee and Healthy Choice helped drive sales up 10% to $2.95 billion. The company's trading and merchandising segment also deserves credit, as it enjoyed a 60% jump in sales. ConAgra maintains full-year 2008 estimates in the range of $1.48, and $1.65 for full-year 2009.
It's also good to see that solid, highly regarded money managers are also invested in ConAgra's stock. Louis Bacon from
owns ConAgra shares. Moore's signature $10 billion fund has returned an average of 24% per year since 1990, making Bacon one of the top fund managers of his generation. Some of his other top positions include
Companhia Vale do Rio Doce
Another notable investment firm that owns ConAgra is
, a $6 billion fund managed by veteran Ralph Whitworth that has returned an average 18% a year since inception.
So with ConAgra, we have a buyback on top of a solid quarter, an increased dividend and two well-known investors in the stock. That's a solid scenario.
Next on the list is
. The Horsham, Pa.-based diet company said it increased its buyback plan by $100 million, bringing its total repurchase plan to $207 million.
The company said the additional buyback will expire on March 31, 2009, while the expiration date for its previous program has been extended to Aug. 9, 2008.
Last week, NutriSystem took a beating as it trimmed its third-quarter outlook. The company said third-quarter earnings will run between 62 and 66 cents a share, down from 77 to 82 cents a share, and new customers are expected to drop 7% from a gain of 4%-5%. Revenue is also expected to fall shy of its earlier estimates, which were in the range of $200 million and $208 million.
The company now expects revenue of $188 million. Investors responded by sending the stock down 33% Thursday. We believe the selloff was overdone, and creates a set-up for a decent play at these levels. On the bright side of the earnings report, the company revealed that NutriSystem remains successful in reactivating former customers.
CEO Michael Hagan explained why he expects upside in 2008: "Though mindful of the heightened competitive factors surrounding our business, the combination of a solid financial platform and upcoming catalysts for growth in fiscal 2008 gives us confidence that the Company's future remains strong."
For a longer-term investor, NutriSystem may prove to be a buying opportunity if its weakness is restricted to the short term. After the seasonally slow fourth quarter, NutriSystem will enter 2008 with substantial changes to its marketing strategy, prepared to compete against
weight-loss drug Alli, that stole recent profits. The company could see new customers levels back up the 50% and 47% levels from the first and second quarters of 2007.
It's good to see a successful fund like
Tiger Global invested in NutriSystem. The $1.4 billion hedge fund is run by former principals of legendary trader Julian Robertson's Tiger Management.
Another positive for NutriSystem is that
Winslow Green Growth (WGGFX) owns the stock. Jack Robinson founded Winslow Management in 1983 to seek out stocks that met his criteria for both environmental responsibility and growth potential. The fund also holds
Whole Foods Market
So with NutriSystem, we have an increased buyback and two well-known funds invested in the stock, which appears to have been irrationally hammered to new lows.
And finally, we have
making this week's list. The company's president and CEO, George Jones, recently purchased 50,000 shares of the bookstore chain for $13.33 to $13.42 apiece. On top of the CEO purchase, Borders' board of directors recently declared a quarterly dividend of 11 cents a share.
Two weeks ago, Borders' stock fell to $12.07, a new 52-week low. Consecutive quarterly losses have dragged the stock down 34% year to date. Jones' $667,938 transaction is even more interesting, seeing as it's the first time he's purchased stock since joining the company in July 2006. With this purchase, he now owns 121,184 shares. We like to see that the CEO believes the stock is cheap and is willing to put his own money on the line.
Jones isn't the only investor attracted to Borders at this price. William Ackman's
is also showing some interest. Pershing met with representatives from Borders to discuss corporate governance issues, including the make-up of the board. Ackman's fund has an 11.7% stake in Borders, representing 6.9 million shares.
It is also good to see that
also finds Borders' stock attractive at this level. The New York-based hedge fund last week disclosed a 6.8% stake -- roughly 4 million shares -- in the company. The deep-value fund also recently opened a position in
is another notable investment firm that owns Borders stock. The New York-based activist fund, which is run by James Mitarotonda, also owns shares of
So with Borders, we have a CEO buying shares for his own pockets, and three solid activist investors looking to unlock value in the stock.
To see the rest of this week's picks, check out Stockpickr's
- Top 10 Insider Purchases and Buybacks XV,
- Top 10 Insider Purchases and Buybacks XVI
- Top 10 Insider Purchases and Buybacks XVII
- Top 10 Insider Purchases and Buybacks XVIII
- Top 10 Insider Purchases and Buybacks XVIX
- Top 10 Insider Purchases and Buybacks XX
- Top 10 Insider Purchases and Buybacks XXI
- Top 10 Insider Purchases and Buybacks XXII
- Top 10 Insider Purchases and Buybacks XXIIITop 10 Insider Purchases and Buybacks XXIV.
You can also review
from the prior week as well as Cramer's
At the time of publication, Altucher and/or his fund had no positions in stocks mentioned, although positions may change at any time.
James Altucher is president of Stockpickr LLC, a wholly owned subsidiary of TheStreet.com and part of its network of Web properties, and a managing partner at Formula Capital, an alternative asset management firm that runs a fund of hedge funds. He is also a weekly columnist for
The Financial Times
and the author of
Trade Like a Hedge Fund
Trade Like Warren Buffett
. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Altucher appreciates your feedback;
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