, the CEO and largest shareholder of
, is the third richest man in the world, and he achieved that status through savvy investing.
We at Stockpickr thought it would be interesting to look at those Buffett stocks that are also the subject of big company share repurchases. As we often highlight here, many stocks have successfully risen in price through company buybacks. So at Stockpickr.com, we have come up with the
When a company buys back its own stock, it reduces the number of shares outstanding and therefore increases the earnings per share. It also sends a signal to investors that the company has confidence in its business and that its own shares are the best investment for its surplus funds.
As an example,
recently implemented a $15 billion stock buyback program. And we also saw that Buffett increased his position in the company. Wal-Mart recently announced a 49.1% quarterly increase in earnings on a 10% increase in revenue. The stock has a
price-to-earnings (P/E) ratio of 14 and a P/E-to-growth (PEG) ratio of 1.1. The yield on the stock is 2%.
Wal-Mart shows up in the
, which lists the stocks held and recently liquidated by the Bill and Hillary Rodham Clinton blind trust. The Clintons also owned
, which also recently announced a $3 billion buyback. The pharmaceutical company, which is working on developing a treatment for lymphoma, as well as for multiple sclerosis and psoriasis, has a P/E of 37 and a PEG of 1.8.
A second Buffett Buyback stock is
Procter & Gamble
, which plans to buy back up to $30 billion in stock over the next three years. P&G reported a 19.5% increase in quarterly earnings on an 8% growth in revenue. The stock has a P/E of 21 and a PEG of 1.6, with a yield of 2.2%.
Procter & Gamble appears in
, a Stockpickr portfolio that also contains
, which offers a P/E of 16, a PEG of 1.5 and a yield of 0.9%.
is another stock on the Buffett Buyback list. The corporate credit rating agency just implemented a new $2 billion buyback program that will begin after its current buyback plan is completed. The company bought back $500 million of its stock last quarter. Moody's has a P/E of 14, a PEG of 1.3 and a yield of 0.7%.
Moody's is part of another interesting Stockpickr portfolio called
. Other companies in this portfolio include
, a provider of transportation and logistics services that has a P/E of 23 and a PEG of 1.8, as well as
Expeditors International of Washington
, another logistics and transportation company. Expeditors has a P/E of 38 and a PEG of 2.0.
There are several other stocks where you might have a savvy investor coupled with a buyback. Check out the entire list -- including
Bank of America
portfolio at Stockpickr.com.
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;
to send him an email.
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