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 11/25/08

Total Value Purchased

1-Year Return

Coach (NYSE: COH  )

$17.59

$899,654

(51.0%)

Cypress Semiconductor (NYSE: CY  )

$3.32

$3,407,885

(30.1%)

GameStop (NYSE: GME  )

$20.67

$360,590

(58.8%)

Marvel Entertainment (NYSE: MVL  )

$28.14

$2,439,000

1.7%

McMoRan Exploration (NYSE: MMR  )

$11.02

$2,965,630

(4.1%)

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

Here comes your stock market hero
Should investors be thankful? The quick answer is no. There's no reason to be thankful for an environment in which the S&P 500 is down more than 40% over the last year. But that's short-term thinking. Fools have a lot to be thankful for. We've not seen prices like these in 35 years.

Panic selling is rampant, and it's given smart insiders at top firms a chance to buy on the cheap. Insiders like David Maisel, head of Marvel Studios, who gets partial credit for the box office blockbuster Iron Man. Maisel purchased 100,000 shares last week for between $23.78 and $24.89 each.

Our 120,000-strong Motley Fool CAPS community would approve:

Metric

Marvel

CAPS Stars (5 max)

*****

Total Ratings

3,402

Bullish Ratings

3,278

Percent Bulls

96.4%

Bearish Ratings

128

Percent Bears

3.6%

Bullish Pitches

582

Bearish Pitches

27

Note: Data current as of Nov. 25, 2008.

Most of them, anyway. Bears will tell you that a box office bust could torpedo Marvel. "I don't think superhero movies are given moneymakers," wrote CAPS investor greenwave3 in July. "The more characters they introduce in movies, the further diluted their franchise and credibility will be."

Interestingly, the numbers don't support that view. How many Bond films have there been again? Quantum of Solace was up to $419 million in global box office receipts as of Monday, according to Box Office Mojo.

Even busts have been winners for Marvel. Consider this summer's character re-introduction, The Incredible Hulk. A decent film, it didn't exactly blow away expectations. And its domestic box office haul, at $134 million, barely eclipsed that of the original, which audiences panned and then abandoned.

Yet The Incredible Hulk, like Iron Man, was profitable for Marvel, Chief Financial Officer Ken West confirmed during the company's third-quarter earnings conference call.

Contrast that with what Time Warner (NYSE: TWX  ) yielded from the brilliantly crafted Batman sequel, The Dark Knight. We've no idea what its near-billion-dollar box office meant for revenue, but Time Warner came in lighter than expected during Q3

Marvel, on the other hand, treads water with a key sequel and still wins. And that's under an old deal with Universal. A new distribution pact with Viacom's (NYSE: VIA  ) Paramount Studios should boost margins further.

No matter, it seems. This well-positioned, high-growth component of Marvel's business sells for near zero. No wonder Maisel was buying; I'm surprised he didn't buy more.

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.

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Fool contributor Tim Beyers is getting torched in CAPS, currently. Thankfully, he's doing better than that as an analyst for Rule Breakers. Get access to all of Tim's Foolish writings here.

Tim had stock and options positions in Marvel at the time of publication. Coach, GameStop, and Marvel are Stock Advisor selections. The Motley Fool's disclosure policy knew a rich executive once. She never bought anything.


Read/Post Comments (3) | Recommend This Article (26)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On November 26, 2008, at 7:05 PM, greenwave3 wrote:

    While your point about Bond movies is correct, I would dispute the fact that superhero movies have nearly as much appeal as a superspy who has a franchise that has spanned decades. Few franchises in movie history have been as successful as Bond's. Many superhero themes are specific to characters that have not been prominent in pop culture for many years. Undoubtedly, Marvel's chief audience is young people and the further back Marvel reaches for its characters and plotlines, the fewer young people actually know or understand what is being presented to them. Thumbs down on MVL.

  • Report this Comment On November 27, 2008, at 1:22 PM, bottmon wrote:

    thumbs up for MVL ,Bond films have been around for A long time,with one theme James Bond.MVL has many charters and ideas in there inventory. I LOOK FORWARD TO THERE NEW MOVIES

  • Report this Comment On November 30, 2008, at 11:38 PM, Bobo2244 wrote:

    Thumbs way UP on MVL. Marvel's strength is their broad appeal. Sure, kids enjoy Marvel characters but so do adults. We all grew up with these characters and most have a passion for them. The fan base is certainly strong but it's not even necessary to develop hits. Characters like Iron Man and even Blade were hardly household names. Yet, their stories are classic. Having 40 years or more to properly develop and storyboard character is a BIG advantage. Having a built in, rabid fan base available to support and promote a film and products is a pure bonus.

    MVL has an incredibly strong model in place. Old revenue streams are in place and strong. What's exciting is that new revenue streams are hitting and hitting big. Iron Man is officially an earnings monster and future films/products involving the character are a GUARENTEED hit. It's nice to have sure fire characters like Iron Man, Spider-Man and X-Men making cash as you wait for blockbusters like Captain America to hit big. On it's own merits, free of outside overall economic drag, I see nothing but a bright future for MVL.

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