Updated from 6:16 a.m. EST
One of the primary goals of Stockpickr.com is to allow everyday investors to see what the big guns are buying. Often times, we see a big-name investor loading up on a particular stock. This is usually a good sign because you know that person put a lot of time and due diligence into that process. Plus, high-profile investors have bankers, lawyers and consultants breaking down the business every which way imaginable.
Breaking Down Sallie Mae CEO's Sailor Talk
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The real icing on the cake, however, is when that same company announces that an insider has purchased a large chunk of stock or even better, the board initiates a new, large share-buyback program.
That's why each Thursday at Stockpickr we update the
portfolio, featuring the stocks that in the last week had either big insider purchases or newly announced buybacks, as well as super-investors accumulating shares.
makes this week's portfolio. The Fairfield, Conn.-based industrial conglomerate said it plans to buy back $15 billion in common stock over the next three years, a total repurchase amount that could be increased over the course of the program. By the end of 2007, GE said it will return a total of $26 billion to its investors through dividends and buybacks.
Even among extreme market volatility, GE managed to deliver record third-quarter earnings of $5.5 billion, up 14% from last year, and EPS of 54 cents, up 15% from last year. Revenue jumped 12% to $42.5 billion with organic growth of 8% and global growth of 15%. With major equipment orders surging 39%, total orders came in at $24 billion, beating the same quarter last year by 20%
GE also last week reaffirmed fourth-quarter and full-year 2007 guidance. The company expects EPS to grow 14%-18% in the fourth quarter, and 18%-19% for the full year. In addition, GE raised its quarterly dividend 11% to 31 cents a share.
Hillard Lyons Equity Research is bullish on GE, as the firm upgraded the stock to buy and raised its price target to $44. Analyst Stephen O'Neil commented, "Momentum in the Infrastructure segment appears to be in its early stages. Global revenue continues to grow. GE stock has declined recently, and we feel reflects the difficulties in financial markets. Based on its historic valuation and current prospects, we believe GE warrants a premium to the
It's also good to see that one of the greatest investors alive,
, owns GE. Some of his other positions include
Procter & Gamble
Another positive for GE is that a distinguished investor like
believes in the stock. His Dreman Value Management also holds stakes in
So with GE, we have a buyback, an upgrade including increased price targets, and two well-known investors in the stock. It may be time to take a closer look.
Next on the list is
. The telecommunications giant said it will buy back 400 million shares by the end of 2009. The repurchase, which represents about 7% of the company's stock, would cost the company more than $15 billion at current prices. This new buyback will replace AT&T's previous program, under which it repurchased about $13 billion in stock.
AT&T recenlty delivered substantial third-quarter earnings fueled by strong wireless sales. The company reported revenue of $30.1 billion, up from $15.6 billion in the same quarter last year. Net income was $3.1 billion, vs. $2.2 billion in the year-earlier period. Wireless revenue jumped 14.4% with wireless data revenue skyrocketing 63.9%. The company also said it expects to have more than 1 million subscribers for its TV services, U-Verse, by 2008, and more than 30 million by 2010.
After AT&T updated guidance the other day, Credit Suisse increased its price target to $50 (from $48) and maintained an outperform rating. Analyst Christopher Larsen said, "We believe management comments and actions at yesterday's analyst day put investor's fears to rest: U-verse is working, which means no deep fiber builds or DISH acquisition is required, double-digit EPS growth should continue beyond 2008, and the company is not seeing a pullback in enterprise spending."
We also like to see that the
owns AT&T stock. This successful fund makes investments that comply with Shariya/Islamic Law. It does not invest in a business that is not in line with Islamic principles. Some of the businesses not permitted are liquor, wine, casinos, pornography, insurance, gambling, pork processing and interest-based banks or finance associations. The fund has a five-year return of over 19%, and it also owns positions in
Another noteworthy fund that invests in AT&T is
, a private-investment management company with some $5 billion in assets under management. It also owns shares of
Companhia Vale do Rio Doce
So with AT&T, we have a buyback, solid earnings report, an outperform rating including increased price targets and two well-known investors in the stock. It may be time to consider AT&T.
And finally, we have
also making this week's list. This Miami-based transportation provider last week announced two separate buyback programs. Under one program, Ryder will repurchase $300 million in common stock over a two year period -- representing just over 10% of total outstanding shares. The second program authorizes 2 million shares for repurchase as an anti-dilutive measure to combat the effects of exercising employee stock options.
On top of the buyback, the stock was also upgraded by Morgan Keegan to outperform from market perform, noting that the pullback in share price in 2007 has made an "attractive entry point for long-term investors." Analyst Art Hatfield believes Ryder should be trading at a higher multiple than during the last economic downturn due to the fundamental changes in the company's business model.
He explained, "We believe the fundamentals underlying Ryder's business model going forward are not accurately portrayed in the share price at current levels. Based on our sum-of-the-parts model, we believe shares should be worth between $44.66 per share and $62.96 per share. At the midpoint of our sum-of-the-parts model, shares should be worth $53.81 per share, which represents a substantial premium to current share price."
It's also good to see that
(LSVEX) owns the stock. With a five-star rating from Morningstar, this open-end fund has generated a three-year return of more than 24%. It also holds
We also like that
(GSLIX) has got its money in Ryder. The fund, which follows an objective of long-term capital appreciation, also like
( WMI) and
So with Ryder, we have a buyback, an upgrade and two well-known investors in the stock. It may be time to take a closer look.
To see the rest of this week's picks, check out Stockpickr's
- Top 10 Insider Purchases and Buybacks XXIV
- Top 10 Insider Purchases and Buybacks XXV
- Top 10 Insider Purchases and Buybacks XXVI
- Top 10 Insider Purchases and Buybacks XXVII
- Top 10 Insider Purchases and Buybacks XXVIII
- Top 10 Insider Purchases and Buybacks XXIX
- Top 10 Insider Purchases and Buybacks XXX
- Top 10 Insider Purchases and Buybacks XXXI
- Top 10 Insider Purchases and Buybacks XXXII
- Top 10 Insider Purchases and Buybacks XXXIII
You can also review
from the prior week as well as Cramer's
As originally published, this story contained an error. Please see
Corrections and Clarifications.
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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