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, 2/25/09

Total Value Purchased

52-Week Change

Anadarko Petroleum (NYSE: APC  )

$35.54

$646,313

(44.3%)

Patriot Coal (NYSE: PCX  )

$3.40

$355,997

(87.8%)

Walter Industries (NYSE: WLT  )

$17.66

$282,403

(67.0%)

Hasbro (NYSE: HAS  )

$22.99

$230,000

(13.7%)

Apollo Investment (Nasdaq: AINV  )

$4.17

$106,700

(68.7%)

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

Hasbro no longer toying around
I'm old enough to remember when Rankin/Bass' stop-motion animated picture featuring Rudolph the Red-Nosed Reindeer, Hermey the elf dentist, and Yukon Cornelius was a network "special" run during the holiday season. I remember those characters rescuing Charlie-in-the-Box and his cast of outcast friends from the Island of Misfit Toys.

If only they could come for Hasbro, too. The toymaker fell below Street estimates for the first time in seven quarters in reporting earnings earlier this month. Mattel (NYSE: MAT  ) , Barbie's corporate guardian, fared even worse.

Toys are serious business for Hasbro. So when holiday shoppers sat tight, bracing for a prolonged recession, it felt the effects. Revenue declined 5%, and earnings fell 30%, as the strengthening dollar had a strong impact.

Interestingly (sadly?), it's exactly what CAPS All-Star jsthwrth predicted in June, when Hasbro was still trading for $36.73 a share. "It's going to be a bad, bad Christmas. Yes, that is the only reason why I've picked this stock to underperform."

Good call. Shares of Hasbro are down more than 37% since.

The rest of our 125,000-strong Motley Fool CAPS community harbors mixed feelings about a recovery:

Metric

Hasbro

CAPS stars (out of 5)

***

Total ratings

566

Percent bulls

91.9%

Percent bears

8.1%

Bullish pitches

84 out of 93

Data current as of Feb. 26, 2009.

Yet bullish CAPS investors like borisvolodnikov remain passionate about the long term. Quoting from borisvolodnikov’s mid-August pitch:

Many of the games and toys Hasbro manufactures and markets are far beyond recognizable brands, they're iconic. Games like Battleship, Candy Land, Risk, and Twister? I think kids will continue to play these games simply because their parents did. Their parents can "get" all of these because they had them when they were kids. Hasbro will continue to develop new and exciting toys, but I think these old classics will always form a core for their business. A good long play.

Insiders would appear to agree. Chief Financial Officer David Hargreaves, who was selling above $40 per share last summer, on Friday bought 10,000 shares at $23 apiece. You can guess where he thinks this stock is headed.

He may have good reason. Hasbro is making like fellow Stock Advisor selection Marvel Entertainment (NYSE: MVL  ) , with two films based on its toy lines -- Transformers: Revenge of the Fallen and G.I. Joe: The Rise of Cobra -- due out this summer. Yo, Joe!

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.

Get the inside scoop on stocks of all sizes with related Foolishness:

Fool contributor Tim Beyers is slowly improving his CAPS score. Thankfully, he's doing better as an analyst for Rule Breakers. Hasbro and Marvel Entertainment are Stock Advisor selections. Try either of these Foolish services free for 30 days.

Tim has stock and options positions in Marvel and a stock position in Apollo Investment 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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