Updated from 7:09 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
investing in the stock. 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 week, we update the Stockpickr
portfolio, featuring stocks that recently have seen big insider purchases or new buyback programs as well as super investors accumulating shares.
Hartford Financial Services
makes this week's portfolio. The Hartford, Conn.-based insurance and investment company entered into an accelerated stock repurchase program with
to repurchase $500 million in common stock. On top of that, the company authorized a new $1 billion buyback plan. The new buyback will add on to the company's existing $2 billion buyback plan, which has $121 million remaining available for repurchase.
"The stock repurchase and hybrid offering further enhance the company's capital structure," said Liz Zlatkus, The Hartford's CFO. "The timing was right for these actions. Replacing a portion of our equity capital with hybrid securities presented a compelling opportunity at this juncture."
On April 28, the seventh-largest insurer posted dismal first-quarter earnings, with profit dropping 83%. Net income in the first quarter was $145 million, or 46 cents a share, compared to $876 million, or $2.71 a share, in the same period last year. The company now expects to earn $9.20 to $9.50 a share this year, down from a previous in January of $9.80 to $10.20.
Hartford stock has sunk 17% year to date, and since hitting a 52-week high of $102.87 in June 2007, shares have fallen 30%.
Analyst John Hall from Wachovia commented, "In our opinion, Hartford's current valuation appropriately reflects the company's strong balance sheet and long-term growth opportunities. We rate the company's shares Market Perform."
We are glad to see that
Dreman Value Management
owns Hartford shares. His other bets include
Another noteworthy investment firm that likes Hartford is
. This fund has a Morningstar rating of 5 stars and is run by Josef Lakonishok, who has more than 25 years of investment research experience. The fund also likes
So with Hartford, we have a buyback and two stellar investment firms into the stock. That's a pretty nice setup.
Next on the list is
. The $96.6 billion electronics and engineering giant said it will add to its buyback plan and repurchase $3.1 billion in common stock from June 9 to July 23. This amount would represent about 28 million shares. During the first part of its ongoing buyback program, which took place from Jan. 28 to April 8, company repurchased 24.9 million shares for $3.1 billion.
Unfortunately, Europe's largest engineering company reported second-quarter profit that plunged 67% to $641.5 million from $2.02 billion in the same period last year. However, sales managed to increase 1% to $28.2 billion as new orders jumped 12% to $36.3 billion. The new orders growth offset the poor earnings and investors pushed the shares 3% higher following the news.
We like to see that Goldman Sachs recently added Siemens to its conviction buy list. The firm noted that investors are not noticing potential catalysts like the company's new buyback and margin expansion opportunities.
On Monday, June 17, the Munich-based company announced that it bought out BJC, Spain's third-largest supplier of electrical switches and socket outlets. This move will allow Siemens' building technology division to increase its global market share.
It's also great to see that someone like
is invested in Siemens. Ken, son of famous value investor and Buffett inspiration, Phil Fisher, is an investing legend now in his own right. He runs the $30 billion Fisher Asset Management, and CXOAdvisory.com ranks him as the No. 1 market pundit out there having tracked all of his market-timing calls. His other stock picks include
likes Siemens and picked up some shares for its investors. Duquesne Capital is a $4 billion investment fund started by Stanley Druckenmiller in 1981. The fund's newest positions include
So with Siemens, we have a buyback, an upgrade and two superior investors in the stock. It might be time to take a closer look.
And finally, we have
making this week's list. The New York Based provider of financial information said it will buyback $500 million in common stock. Under the buyback, as many as 15 million shares may be repurchased, representing 1.81% of the total outstanding shares. The company said it will start repurchasing the shares on June 6, 2008 and will terminate by June 5, 2009.
On May 1, 2008 the company announced impressive first quarter results with revenue surging 12% to $3.25 billion. On April 17, 2008 the company completed the purchase of Reuters which it began 11 months ago. As part of the purchase, they will reduce costs sooner than anticipated. They said annualized savings will be $1 billion by the end of 2010 and $1.2 billion in 2011. The company added that it expects to grow 8% this year.
"Our combined first quarter results and guidance for the full year reflect the robustness of our business, even in turbulent markets. Our Markets Division holds leading positions in higher growth segments of the financial markets, including foreign exchange, commodities, energy and emerging markets." said Thomas H. Glocer, CEO of Thomson Reuters. "These are high quality businesses with attractive profit margins and strong cash flow characteristics."
Analyst Vince Valentini with TD Newcrest equity research has a buy rating and a $53 price target on the stock. He said, "We continue to believe that the best way to value TRI shares is to look forward to 2010 or 2011 results when the net impact from synergies and integration costs becomes more normalized."
We also like to see that
likes Thomson. The $12 billion dollar group of hedge funds founded by Steven A. Cohen in 1992 said that it had a gross return, before its fees, of at least 40 percent in every year since inception, making it astoundingly successful. Cohen, regarded by many as the best stock trader ever, recently sold out of
is another noteworthy fund invested in Thomson. The $5 billion NY-based hedge fund started by Jim Simons in 1982 has averaged 38% annual returns, after fees, since 1989, and is considered in the industry to be the most successful hedge fund. They also like
. So we have a buyback, great earnings, and two major investors in the stock. It might be time to do some homework on TRI.
For more stocks and analysis, check out this week's
For the 10 most recent portfolios, check out:
- Top 10 Insider Purchases and Buybacks XLVI
- Top 10 Insider Purchases and Buybacks XLVII
- Top 10 Insider Purchases and Buybacks XLVIII
- Top 10 Insider Purchases and Buybacks XLIX
- Top 10 Insider Purchases and Buybacks L
- Top 10 Insider Purchases and Buybacks LI
- Top 10 Insider Purchases and Buybacks LII
- Top 10 Insider Purchases and Buybacks LIII
- Top 10 Insider Purchases and Buybacks LIV
- Top 10 Insider Purchases and Buybacks LV
You can also review
from the prior week and Jim 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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