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 12/3/08 |
Total Value Purchased |
52-Week Change |
|---|---|---|---|
|
Bruker |
$4.45 |
$2,091,360 |
(59.6%) |
|
Ashland |
$8.97 |
$193,229 |
(81.2%) |
|
Visa |
$52.44 |
$192,000 |
(6.9%)* |
|
Citigroup |
$7.82 |
$103,35 |
(75.0%) |
|
Chico's FAS |
$2.43 |
$37,579 |
(78.6%) |
Sources: Fool.com, Yahoo! Finance, Form 4 Oracle. *Visa went public on March 19, 2008.
Life takes Visa, but will your portfolio?
The knock on growth stocks is that, often, they carry the burden of high expectations. Witness salesforce.com
Which brings us to credit card issuer Visa. Analysts and executives still see years of 20% earnings growth ahead. They'd better be right, my Foolish colleague Morgan Housel argued in October:
If growth assumptions of 22% hold true, shareholders will be rewarded handsomely in the coming years. But if you're under the impression that the health of consumers is all but certain to take a turn for the worse, as I am, Visa's returns are likely to be very meager at best.
His opinion hasn't changed much since. "It may very well meet those growth expectations, but it's all pegged on the confidence of the global consumer, which obviously is a stretch right now. I'd love to buy Visa at $30 -- $50 still seems optimistic to me," Morgan wrote to me in a chat session earlier today.
Even so, our 120,000-strong Motley Fool CAPS community likes Visa at current levels:
|
Metric |
|
|---|---|
|
CAPS stars (5 max) |
**** |
|
Total ratings |
4,147 |
|
Bullish ratings |
3,937 |
|
Percent Bulls |
94.9% |
|
Bearish ratings |
210 |
|
Percent Bears |
5.1% |
|
Bullish pitches |
789 |
|
Bearish pitches |
55 |
Note: Data current as of December 4, 2008.
CAPS investor Guardian21 summarized well the bullish view in this pitch from the first of this month, I think:
Visa will profit from the long term trend of increasing consumer use of credit and debit cards. It is the dominant competitor in its industry. Along with Mastercard, its business model contains less risk than some of its other competitors since it does not lend. Stong balance sheet, with over 5 billion in cash and about 100 million in debt.
As a growth investor myself, I prefer fast movers that are grossly misunderstood and, thereby, mispriced. With Visa, all I see is optimism and a premium price tag.
But not Visa Chief Financial Officer Byron Pollitt Jr. He spent close to $200,000 for 4,000 new Visa shares earlier this week. Keep your fingers crossed, optimists.
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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