Stocks the Rich Executives Are Buying

Put five Fools in a room, ask them how they invest, and you'll likely get five different answers. Some like growth, others value, or small caps, or dividends, or -- well, you get the picture.

Yet, while our styles differ, we all want excellent, engaged managers running the companies we own. We like it even more when these managers are also owners -- investors like you and me who, in trying times like these, are willing to buy as others sell. That's why I write this column weekly.

The week's buying
So which rich executives are buying now? Have a look, courtesy of our friends at Form 4 Oracle:

Company

Closing Price April 8, 2009

Total Value Purchased

52-Week Change

Ambac Financial (NYSE: ABK  )

$0.86

$25,700

(85.6%)

BioMimetic Therapeutics (Nasdaq: BMTI  )

$8.43

$8,040,829

(15.4%)

Conseco (NYSE: CNO  )

$1.29

$300,610

(88.5%)

McCormick (NYSE: MKC  )

$28.91

$73,250

(20.8%)

Oracle (Nasdaq: ORCL  )

$18.57

$19,264

(6.5%)

Sources: Fool.com, Yahoo! Finance, Form 4 Oracle.

A little extra spice for McCormick
My Foolish friend Joe Magyer has a habit of buying and holding companies whose products never, ever go out of style. That's why, when a Goldman Sachs analyst named ExxonMobil (NYSE: XOM  ) the "world's greatest company," he agreed.

Fair enough. Oil is essential. But, then again, so are spices. We all buy them, because we all eat. We always will. And, chances are, we'll buy from McCormick, which has been making our food taste better since 1889.

Why not another 120 years? McCormick, a Motley Fool Income Investor pick, has survived other recessions and The Great Depression, after all. And last month, management reiterated earlier profit guidance for modest revenue growth in 2009.

Tasty. Or so says our 130,000-strong Motley Fool CAPS community. Some of our members enjoy this:

Metric

McCormick

CAPS stars (5 max)

****

Total ratings

228

Percent bulls

94.7%

Percent bears

5.3%

Bullish pitches

29 of 29

Note: Data current as of April 9, 2009.

"McCormick's dominates the spice and seasoning market controlling half the market and is more than twice the size of its leading competitor. It innovates through the introduction of new products which mesh with its trademark brands," wrote CAPS investor stanton17 in December. This member added:

While many cash conscious consumers opt for less expensive private label brands, they are often unwittingly purchasing McCormick's products since it's also the largest producer of private label spices and seasonings in North America. And how can McCormick's top that? Well, they're also the leading supplier to industrial businesses and supply many of the largest multinational packaged food, beverage, and restaurant companies.

So dominant is McCormick in its niche that it has been compared to Google (Nasdaq: GOOG  ) . And yet, at current prices, the stock trades for just 14.5 times trailing earnings and 11.7 times forward earnings. It also pays a healthy 3.3% dividend yield.

Barron's, meanwhile, reports that McCormick has improved net income by 10% a year over the past decade. Thus, at current prices, McCormick commands a very modest premium to its historic earnings growth rate. Seems reasonable to me.

And, apparently, to Lawrence Kurzius, president of McCormick's international business segment. He purchased 2,500 more shares on the open market late last week, boosting his stake by 7%.

There's your update. See you back here next week, when we dig through more insider filings in search of the next home run stock.

For related Foolishness:

Fool contributor Tim Beyers is slowly improving his CAPS score. Thankfully, he's doing better as an analyst for Motley Fool Rule Breakers, which counts Google as one of its recommendations. McCormick is an Income Investor pick. Try either of these Foolish services free for 30 days.

Tim had stock and options positions in Google and stock positions in ExxonMobil and Oracle at the time of publication. Check out his portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. The Motley Fool is also on Twitter as @TheMotleyFool. Its disclosure policy knew a rich executive once. She never bought anything.


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