One of the primary goals of Stockpickr.com is to allow everyday investors to see what the big guns are buying. Often we see a big-name investor loading up on a particular stock. This is usually a good sign because you know that person put a lot of time and due diligence into that process. Plus, high-profile investors have bankers, lawyers and consultants breaking down the business every which way imaginable.

The real icing on the cake, however, is when that same company announces that an insider has purchased a large chunk of stock -- or even better, the board initiates a new, large share-buyback program.

That's why each week at Stockpickr we update the Top 10 Insider Purchases and Buybacks portfolio, featuring the stocks that in the last week had either big insider purchases or newly announced buybacks, as well as super-investors accumulating shares.

For instance, Vodafone (VOD) is in this week's portfolio. The European telecom giant said its board approved the repurchase of up too $2 billion in common stock. The move comes a day after the company's stock sunk 14% on lower expectations for full-year sales. Vodafone said that this sharp decline was unwarranted and made that the move made Vodafone shares significantly undervalued.

Vodafone added that the maximum share price at which it will repurchase the shares will be no more than 105% of the average closing price in the five business days before the buyback.

On Tuesday, July 22, the world's largest mobile operator by sales reported first-quarter earnings with sales increasing 19% to $19.6 billion. However, most of this growth came from favorable exchange rates and acquisitions. Organic revenue increased just 1.7%.

In its strongest markets, revenue dripped 0.2%, mostly due to soft sales in Spain, which has experienced a huge drop in consumer spending. Sales in the U.K. were also weak for Vodafone because competition remains tough.

Arun Sarin, Vodafone's CEO, commented: "Whilst we expect revenue around the bottom of the outlook range, our continued focus on cost reduction enables us to reiterate our operating profit and cash flow guidance for the year."

Shares of Vodafone sunk 14% when the company warned about full-year results, hinting at a slowdown in the telecom sector. The company expects revenue to be at the bottom end of its range of $79.8 billion to $81.6 billion.

Standard & Poor's analyst Cristina Perea said: "Vodafone's comments today highlight the fact that mobile and telecommunications services are not immune to the overall consumption patterns."

Deutsche Bank (DB) has a buy rating on the stock and a $200 price target. It just issued a report saying that Vodafone's peers saw much lower gains in Spain. This is good news for Vodafone, because it means the Spanish market isn't as weak as the company previously thought.

We also like to see that Dodge & Cox holds Vodafone in its portfolio. This $100 billion investment fund was founded in San Francisco in 1930. The firm's Stock Fund has posted an annual average return of 14.47% over the past 10 years, easily outperforming the S&P 500. It is also buying shares of Wal-Mart (WMT) and Novartis (NVS).

Another reason we noticed Vodafone is because Ken Fisher owns its stock. Ken, son of famous value investor and Warren Buffett inspiration Phil Fisher, runs the $30 billion Fisher Asset Management, and CXOAdvisory.com ranks him as the No. 1 market expert. His other top stock picks are Freeort-McMoRan (FCX) and Schlumberger (SLB).

So we have a buyback, a buy rating and two top-notch investors into the stock. It might be time to do more homework on Vodafone.

Next on the list is Praxair (PX). The Danbury, Conn.-based industrial gas supplier announced a new $1 billion buyback program. This program is in addition to its previous $1 billion buyback program, which was initiated in July 2007.

Under the previous program, $931 million of stock repurchases have been completed. The buybacks are expected to be completed over the next two years and will be financed with free cash and some debt.

"This new share repurchase program reflects the confidence we have in the long-term growth outlook for our business, and our commitment to increasing shareholder value," said Steve Angel, chairman and CEO.

The largest industrial gas supplier in North and South America reported stellar second-quarter results. Net income came in at $349 million, or $1.08 a share, compared with $291 million, or 89 cents a share, in the same period last year. This represents net income and EPS growth of 20% and 21%, respectively.

Total sales surged 23% to $2.87 billion from strong sales in every area, especially South America and Asia. Sales in South American experienced growth of 31%, while Asia sales jumped 30%.

Praxair raised its full year EPS estimates by 3% to a range of $4.20 share to $4.30 a share. This represented sales growth in the range of 16% to 20%.

Analysts at Oppenheimer said Praxair is their top large-cap pick, "blending growth, defensiveness, and multi-year visibility due to take-or-pay contracts and a large backlog of global energy and infrastructure projects." They have an outperform rating on Praxair and a 12-month price target of $105.

In its 15 years as a public company, Praxair has never had down EPS, even in recession. The Oppenheimer analysts noted that Praxair has the No. 1 franchise in key BRIC (Brazil, Russian, India and China) markets and that it would benefit from energy scarcity. Seeing as the average size of the compny's new projects has doubled in the past three years, increasing demand will continue to drive growth.

It's always a bullish sign when Renaissance Technologies owns a stock, and it owns Praxair. Renaissance's Medallion Fund has averaged 38% annual returns, after fees, since 1989 and is considered in the industry to be the most successful hedge fund. Its other top holdings are Johnson & Johnson (JNJ) and Kinetic Concepts (KCI).

Navellier & Associates also likes Praxair. This $3.8 billion fund is run by Louis Navellier, who has been dedicated to finding and exploiting inefficiencies in the stock market since 1980. Other stocks it likes are Research in Motion (RIMM) and Colgate-Palmolive (CL).

So we have a buyback, great earnings, increased estimates, an analyst that rates Praxair its "top pick" and two superior investment firms buying shares. That's a solid foundation for this stock to take off.

And finally we have Baker Hughes (BHI) making this week's list. The company, based out of Houston, supplies a range a products to oil and natural gas companies. Baker recently announced that its board approved a plan to repurchase $1 billion in common stock.

This new buyback comes on top of the company's previous repurchase plan. As of July 24, Baker Hughes had authorization remaining to repurchase about $1.246 billion.

The company also announced that it increased its quarterly dividend by 15% to 15 cents a share from 13 cents a share.

On Tuesday, July 22, the company reported second-quarter income that jumped 8.4% to $379.3 million, or $1.23 a share, from $349.6 million, or $1.09 a share, in the same period last year. Revenue for the quarter was $3 billion, an increase of 18% from the previous period.

After the stronger-then-expected second quarter results, Jefferies lifted its price target on Baker Hughes from $105 to $112. Jefferies has a buy rating on Baker, noting attractive valuation and visible growth in North America and internationally.

It's also good to see that the Citadel Investment Group likes Baker. Citadel, a $20 billion dollar Chicago-based hedge fund founded by billionaire trader Kenneth C. Griffin, is one of the world's largest hedge funds. The firm is known for its daily trading volume, which amounts to 1% to 2% of daily trading activity in New York and Tokyo. It also likes Trinity Industries (TRN) and Marvell Technologies (MRVL).

Another noteworthy firm into Baker Hughes stock is the D.E. Shaw Group. Since its organization in 1988, the $50 billion firm has earned an international reputation for financial innovation and an extraordinarily distinguished staff. The firm also invests in Exxon Mobil (XOM) and Proctor & Gamble (PG).

So we have a buyback, solid earnings, increased dividend and price targets, and two first-class investment firms into stock. It may be time to take a closer look at Baker Hughes.

For more stocks and analysis, check out this week's Top 10 Insider Purchases and Buybacks portfolio at Stockpickr.com.

For the 10 most-recent portfolios, check out:


Top 10 Insider Purchases and Buybacks LII

Top 10 Insider Purchases and Buybacks LIII

Top 10 Insider Purchases and Buybacks LIV

Top 10 Insider Purchases and Buybacks LV

Top 10 Insider Purchases and Buybacks LVI

Top 10 Insider Purchases and Buybacks LVII

Top 10 Insider Purchases and Buybacks LVIII

Top 10 Insider Purchases and Buybacks LIX

Top 10 Insider Purchases and Buybacks LX

Top 10 Insider Purchases and Buybacks LXI

You can also review Barron's Top Insider Purchases from the prior week and Jim Cramer's "Mad Money" Buybacks.

A note from James Altucher:

Every weekend I send an email to Jim Cramer and several hedge fund managers about the most interesting portfolios posted on Stockpickr that week. Usually those portfolios not only list stocks according to a theme but also offer significant analysis as to why the stocks are cheap.

Here are some examples:

Stocks related to drilling the Marcellus Shale

MLPS with yields above 7%

Microcaps trading for less than tangible book

Stocks that do well after Hurricanes

Here's the challenge: Build a portfolio at Stockpickr.com with great analysis, and send me the link. Each great portfolio (with analysis) will get posted on TheStreet.com with your byline (as a "Stockpickr Guest Columnist") and will be included in my email I send to Jim and the other
hedge fund managers on my list.


Published July 31, 2008