Updated from 5:59 a.m. ESTOne of the primary goals of Stockpickr.com is to allow everyday investors to see what the big guns are buying. We often 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 Top 10 Insider Purchases and Buybacks 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. UPS ( UPS) makes this week's list. The world's largest package delivery company increased its buyback plan from $2 billion to $10 billion based on a new financial policy intended to enhance shareholder value. The shares are expected to be repurchased within the next two years. The new policy also aims at increasing the company's debt ratio to between 50% and 60% funds from operations to total debt. "We have been studying our capital structure options for some time. This change in policy will permit us to make increased investments in the business, pursue selective acquisitions and undertake larger share repurchases," CFO Kurt Kuehn said. A day later, Bear Stearns analyst Edward Wolfe, who had an underweight rating on the trucking sector for the past 2 1/2 years, raised his rating on the sector to market weight. He believes valuation on the trucking sector is getting attractive as stocks reach their bottoms. Of all the trucking stocks, Wolfe is most confident in UPS. Wolfe upgraded the stock to outperform from peer perform and increased its price target to $85, as "UPS is well positioned to quickly firm up rates once the freight economy improves." He concluded, "While we expect lower guidance in the near term, we believe UPS is well positioned for the longer term and at 15x our low-end forward P/E, valuation seems reasonable." This week, according to an Associated Press report, American Trucking Association CEO Bill Graves made optimistic statements regarding the U.S. and Chinese trucking industry. With 70% of U.S. goods carried by trucks, Graves expects improving economic conditions in the beginning of 2009 to spark growth in the trucking sector. Likewise, according to the AP, Mingde Yao, president of the China Road Transport Association, does not expect a U.S. recession and said the slowdown should have only a minor effect on trade between the U.S. and China. Adding to the bullish case for UPS is the fact that Renaissance Technologies owns the stock. Its $5 billion Medallion Fund is considered one of the most successful hedge funds, yielding returns 10 percentage points higher than legendary investors Bruce Kovner, George Soros or Paul Tudor Jones. Some of its top holdings are Johnson & Johnson ( JNJ) and Lockheed Martin ( LMT).
Next on the list is Adobe Systems ( ADBE), which increased its buyback last month by as much as 30 million shares. The diversified software company initiated a 20 million-share buyback in April, and as of Nov. 30 had repurchased 17.7 million shares. Adobe currently has about $2 billion in cash and 587 million shares outstanding. The San Jose, Calif., company also reported strong fourth-quarter earnings last month and high global demand for its new product, Creative Suite. Fourth-quarter profit jumped 21% to $222.2 million, or 38 cents a share, versus $183.2 million, or 30 cents a share, in the same period last year. Revenue climbed to $911.2 million, up from $682.2 million in the fourth quarter last year. After the earnings report, Deutsche Bank analyst Tom Ernst upgraded the stock to buy from hold and lifted the price target to $52 from $49. He believes this to be an attractive entry point, as Adobe may see huge sales in 2008. It's also good to see that Duquesne Capital likes Adobe's stock. Stanley Druckenmiller, who started Duquesne in 1981, learned his trading strategies from one of the best -- George Soros. Duquesne's newest positions are EMC ( EMC) and General Electric ( GE). Another outstanding fund that owns Adobe stock is the Amana Trust Growth. This fund, which has a five-star rating from Morningstar, invests only in equity securities, including foreign securities. Investment decisions are made in accordance with Islamic principles. The fund also holds Rio Tinto ( RTP) and PepsiCo ( PEP). So with Adobe, we have a buyback, an upgrade including an increased price target, solid earnings and two well-known investors in the stock. It may be time to take a closer look.
And finally, we have NII Holdings ( NIHD) making this week's list. The wireless company, which operates in Latin and North America, announced a $500 million buyback plan, an amount that represents 6% of the company's market cap. The new plan replaces a previous $500 million plan that the company completed in 2007. On top of the buyback, NII named Steven Dussek as its new CEO. Dussek comes from Dobson Communications, where he held the chief executive position and led the company to expand operating margins to 39% from 32% and increase its market cap from $400 million to $2.8 billion. NII also said it will report better-than-expected net subscriber additions for 2007. The company added nearly 1.3 million customers, representing a 38% jump from 2006. NII now has a total of 4.7 million subscribers, a 37% increase from last year. Wachovia was impressed by NIHD's strong numbers and reiterated an outperform rating on the stock. The analysts believe, "NIHD will show some of the best growth in the wireless industry over the next several years. NII's markets are much less penetrated than the U.S. and exhibit a more favorable competitive landscape." Wachovia sees NIHD trading between $81 and $90. It's also good to see that solid, highly regarded managers are also invested in NII's stock. Bill Miller owns NII shares. Miller, portfolio manager of Legg Mason Value Trust, has been the only mutual fund manager to beat the S&P 500 for the last 14 straight years (although that streak just ended in 2006). Miller recently increased his positions in Under Armour ( UA) and US Airways ( LCC). Another notable investment firm that owns NIHD shares is Atalanta Sosnoff Capital, a private investment management company with about $5 billion in assets under management. It recently bought shares of Vale ( RIO) and AT&T ( T). So with NII Holdings we have a buyback, a new CEO with an impressive track record, an outperform rating and two well-known investors in the stock. It may be time to look into this stock. To see the rest of this week's picks, check out Stockpickr's Top 10 Insider Purchases and Buybacks portfolio.
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