Updated from 5:49 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.
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 Seattle-based online retailer announced a plan to buy back $1 billion in common stock over the next two years. The buyback plan replaces an April 2007 authorization worth $500 million.
Amazon also said its board authorized a debt-repurchasing program. The company may buy back all of its outstanding 4.75% convertible subordinate notes due next year, worth about $899 million, and its 6.875% convertible subordinated notes due in 2010, worth roughly $350 million, totaling $1.25 billion.
The company last month reported outstanding fourth-quarter and full-year earnings due mainly to strong international sales. In the fourth quarter, net sales jumped 42% to $5.67 billion, up from $3.99 billion in the same period last year, while net income rocketed 112% to $207 million, or 48 cents a share, vs. net income of $98 million, or 23 cents a share.
In 2007 free cash flow increased 143% to $1.18 billion. Sales for the full year jumped 39% to $14.84 billion while net income soared 150% to $476 million, or $1.12 a share, which was in line with Wall Street's expectations.
Analyst Mark Mahaney from Citi Investment Research likes Amazon and rates the stock a buy with a $97 price target. With Amazon shares trading at 5% free cash flow yield, he believes its healthy cash flow is one of the company's most attractive metrics and this new buyback adds to that case for Amazon.
It's also good to see a successful investor like
buying Amazon shares. Miller, portfolio manager of Legg Mason Value Trust, has been the only mutual fund manager to beat the
for the last 14 straight years (although that streak just ended in 2006). He also likes
, and he recently sold out of
We like that Amazon is in the portfolio of the
, which invests at least 80% of its assets in equity securities of the types of companies positioned to benefit from the growth of the Internet. The fund also holds shares of
, an online company that helps consumers throughout the moving process.
So with Amazon, we have a buyback, record earnings, a buy rating and two successful investors into the stock. It may be time to log on to this Internet retailer.
Next on the list is
. The communications giant said its board approved the repurchase of up to 100 million shares, which represents some 3.4% of the company's 2.9 billion outstanding shares.
The New York-based company last month reported fourth-quarter results with net income at $1.07 billion, or 37 cents a share, a 3.9% increase from $1.03 billion, or 35 cents a share, in the same period last year. Propelled by 13.3% growth in wireless sales, revenue jumped 5.5% to $23.84 billion from $22.61 billion a year ago.
Analyst Tom Watts from Cowen and Co. recommends buying Verizon stock and sees the potential for 30% upside over the next 12 months. Strong cash flows over the next two years could force the company to repurchase all 100 million shares by the end of 2009, way ahead of the plan's February 2011 deadline.
Watts expects margin growth in wireline and wireless businesses throughout 2008 to drive double-digit EPS growth. "Verizon shares are down almost 20% YTD creating an excellent entry point into solid long-term growth," said Watts, who gave Verizon an outperform rating.
, a $4.5 billion fund started by Stanley Druckenmiller, owns Verizon stock. Druckenmiller, who used to work for George Soros' Quantum Fund, recently bought shares of
We also like to see that Verizon is part of the
. This four-star Morningstar-rated fund invests all or substantially all of its assets in the 1,300 largest cap stocks in its target index. Some of its other top holdings are
Proctor & Gamble
So with Verizon, we have a buyback, solid earnings, an outperform rating and two great investors in the stock. Time to do some homework on Verizon.
And finally, we have
making this week's list. Last Monday, the owner of TJ Maxx and Marshalls said its board approved a buyback program of up to $1 billion in common stock. The buyback, which has no expiration date, would represent 7.5% of the company's outstanding shares.This new plan is in addition to the $486 million remaining under the company's existing $1 billion plan authorized in February 2007. Since 1997, TJX has initiated nine buybacks and spent $5.8 billion repurchasing 342 million shares.
Based on strong December sales and margins, Credit Suisse raised its fourth-quarter and full year earnings estimates for the retailer. The firm's analysts also awarded the stock with an outperform rating and $35 price target.
We like to see that TJX has reported earnings on track and positive same-store sales growth, but we also like that the
investment fund is into TJX stock. The firm, which manages over $14 billion in assets, runs the Sequoia Fund, which from its inception in 1970 through June 2006 generated an average annual total return of 15.7%. The fund also holds shares of
Bed Bath & Beyond
It's also good to see that
is buying TJX shares. The $26 billion fund considers for investment only those companies with a competitive advantage such as a superior distribution network, low cost structure or tangible assets. The fund also holds shares of
So with TJX, we have a buyback, Wall Street recommendations and two noteworthy investors. That's a pretty nice setup.
For more stocks and analysis, check out this week's
For the 10 most recent portfolios, check out:
- 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
- Top 10 Insider Purchases and Buybacks XXXIV
- Top 10 Insider Purchases and Buybacks XXXV
- Top 10 Insider Purchases and Buybacks XXXVI
- Top 10 Insider Purchases and Buybacks XXXVII
- Top 10 Insider Purchases and Buybacks XXXVIII
- Top 10 Insider Purchases and Buybacks XXXVIX
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
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
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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