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 3/24/09

Total Value Purchased

52-Week Change

Comtech Telecommunications (Nasdaq: CMTL  )

$22.07

$650,643

(44.1%)

Diamond Foods

$25.71

$54,685

43.6%

Liberty Media Capital (Nasdaq: LCAPA  )

$6.49

$1,828,200

(59.1%)

Red Robin Gourmet Burgers

$16.66

$100,942

(57.1%)

United Natural Foods (Nasdaq: UNFI  )

$17.66

$108,576

2.2%

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

Should you liberate your portfolio?
Chairman John Malone's Liberty Media is a strange beast, a media conglomerate whose holdings include the QVC Shopping Network, Starz Media, positions in Time Warner (NYSE: TWX  ) and Sprint Nextel (NYSE: S  ) , and most recently, a big slice of Sirius XM Radio (Nasdaq: SIRI  ) .

You'd think all of those assets would make for a potent combo, yet the conglomerate's segments have recently shown mixed results. Fourth-quarter revenue at Liberty Interactive, home to its QVC and DirecTV (NYSE: DTV  ) stakes, fell 4%.

On the other hand, Liberty Media Capital, whose interests include its Time Warner and Sprint holdings and the Atlanta Braves baseball team (see how complicated this gets?), grew fourth-quarter revenue 44% year over year. Of Malone's varied operations, it's the fast mover. It's also the unit that our 130,000-strong Motley Fool CAPS community prefers:

Metric

Liberty Media Capital

CAPS stars (5 max)

****

Total ratings

242

Percent Bulls

95.5%

Percent Bears

4.5%

Bullish pitches

21 out of 21

Data current as of March 25, 2009.

"Mr. Market is hurting and this company has been understated," wrote CAPS All-Star ValueMrk last month: 

This is a media giant moreover, it is a media holding company! Liberty Media is undervalued at these price multiples. The Market Cap is well under liquadation value! Liberty is another victim of forced liquidations.

Perhaps it is a victim. But Greg Maffei, Liberty Media Capital's chief executive, is buying. Liberty recently provided Sirius with $530 million in fresh capital because of the quality of the service and "the attractive terms of the securities," in Maffei's words.

These terms include a 15% coupon rate and a 40% stake in Sirius XM via preferred stock. Buying his own shares gives Maffei a bigger slice of that 40% slice, without assuming all the risks inherent in owning Sirius XM directly. A pretty good deal, if you ask me.

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. Sprint Nextel is an Inside Value pick. Try this Foolish service free for 30 days.

Tim didn't own shares in any of the companies mentioned in this article 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.


Read/Post Comments (4) | Recommend This Article (14)

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 March 26, 2009, at 12:38 PM, samthewill wrote:

    how did you find 'rich executives'? did you go on www.affluence.org and check out the investment discussions? I would rather go with agriculture and mining stocks..

  • Report this Comment On March 26, 2009, at 1:09 PM, crafal wrote:

    You don't have to be a rich exec to know what stocks to buy. If people just used about .0000001% of their brain, they would know that SIRI was not gonna go Bankrupt. Mel does know his business and he is good at it, and he knows what he's doing. And when it was at .06, people should have noticed that it was a good deal and bought the stock (like me, thank you very much) Look where the stock is now! The fools are lacking with their input and are desperate to say something bad about SIRI. I still can't believe that people actually pay to get their advise.

  • Report this Comment On March 26, 2009, at 1:13 PM, crafal wrote:

    What people should worry about is how much the government is trying take over and regulate the market, which they have no business in doing. If Fools want to flood the market with their financial advise articles every 5 min, than flood it with articles telling people to keep the government away from wall st.

  • Report this Comment On March 29, 2009, at 9:32 PM, kaninbuehcibai wrote:

    I have long ago cancelled my subscription for this stupid advise from motley fools. Really how dumb could i be to have wasted my time and invested in their so called advise and ridiculous personal opinions?

    Thank god i took another look at SIRIUS XM (SIRI) and bought in at 0.069 at 500k shares. This damn site nearly me loose a fortune if not for other more practical websites that feature proper explainations and stats that helped me reverse my decisions on SIRI. Thank you motley fool for reminding me that you guys suck!

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