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Weekly Guru Bargains Highlights: Kennametal Inc., Synovus Financial Corp., Chico’s FAS Inc., Idearc Inc., Cummins Inc.

January 13, 2008 | About:

As energy prices rise and credit crisis continue to strain the economy, consumers feel the pressure to spend less, which ultimately slows down other sectors including retail. In the first two weeks of 2008, the market has seen it worst start in many years. A lot of guru stocks have declined to multi-year lows, too.

Related companies: Kennametal Inc. (KMT), Synovus Financial Corp. (SNV), Chico’s FAS Inc. (CHS), Idearc Inc. (IAR), Cummins Inc. (CMI).

Kennametal Inc. (KMT): Down 59% Since Ruane Cunniff Bought In the Fourth Quarter

Kennametal, Inc. (KMT) announced that their CEO Carlos Cardoso will take office as chairman beginning this year. In the fourth quarter, the company declared a 2-for-1 stock split. KMT manufactures metal cutting tools and highway construction equipment.

Ruane Cunniff added 14,381 shares to his KMT holdings between $73.16 and $86.50 a share. As David Dreman kept his KMT about the same, NWQ Managers and Richard Pzena decreased their holdings.

Director Ronald M. Defeo bought 3,200 shares on 07/27/07 at $79. As of mid-October, a long line of insider sells were made between $76.60 and $90.35: Director William R. Newlin sold 34,500 shares; Vice President James R. Breisinger sold 6,214 shares, VP and Treasurer Lawrence J. Lanza sold 4,800 shares, Director A. Peter Held sold 3,000 shares, Vice President James E. Morrison sold 2,984 shares, Vice President David W. Greenfield sold 1,600 shares, and finally VP, Finance & Corp. Controller Wayne D. Moser sold 1,000 shares.

Kennametal Inc. has a market cap of $2.54 billion; its shares were traded at around $33.08 with P/E ratio of 14.38 and P/S ratio of 1.05. The dividend yield of Kennametal Inc. stocks is 1.4%.

Synovus Financial Corp. (SNV): Down 59% Since George Soros Bought In the Third Quarter

Synovus Financial Corp. (SNV) is a provider for financial services for retail & commercial banking and investment services. Once approved, the company plans to merge First Florida Bank into Synovus Bank of Tampa Bay, Florida. Early in 2007, Synovus took a hit from a pretax charge of $12 million from the litigation settlement between American Express Co. vs. Visa USA Inc. Also, the recent 40% drop in regional home prices will cost the company at most $33 million in write-offs. Consequently, the company lowered its 2007 earnings expectations to $1.83 per share.

Synovus Financial Corp., through its subsidiaries, provides various financial services in the United States. It operates in two segments, Financial Services and Transaction Processing Services.

George Soros purchased 140,000 shares between $26.41 and $31.05, with an estimated average price of $28.40. Also, Ruane Cunniff owns 40,445 shares of SNV stock.

Directors Daniel P. Amos, James H. Blanchard, and J. Neal Purcell made their buys in November between $22.79 and $24.42: 40,000 shares, 29,270 shares, and 2,000 shares, respectively.

Large sells were made since late-October between $23.08 and $25.97 by Director James D. Yancey, who sold 121,648 shares; EVP and Chief Credit Officer Mark G. Holladay, who sold 62,785 shares; Advisory Director Philip W. Tomlinson, who sold a cumulative total of 55,600 shares; Sr. EVP, GC and Sec. G. Sanders Griffith IIII, who sold 53,364 shares; EVP and CFO Thomas J. Prescott, who sold 21,744 shares; Advisory Director Elizabeth R. James, who sold 18,137 shares; and finally, Executive Vice President Calvin Smyre, who sold 12,661 shares.

Synovus Financial Corp. has a market cap of $3.87 billion; its shares were traded at around $11.67 with P/E ratio of 6.27 and P/S ratio of 1.17. The dividend yield of Synovus Financial Corp. stocks is 7.5%.

Chico's FAS Inc. (CHS): Down 58% Since Arnold Schneider Bought In the Third Quarter

The shares of Chico’s FAS Inc. (CHS) have been its lowest in the past four years. Profits were below analysts’ mark, due to faint sales over the holiday. Chico's FAS expects a net loss of $23 million to $28 million in the quarter after deep discounts sank December sales results, the first loss for the company since the fourth quarter of 1997, as the November & December same store sales dropped by 13.7%.

Arnold Schneider bought 549,550 shares between $14.05 and $24.92.

Insider buys were made between $9.42 and $14.61: Chairman, President and CEO, Director Scott A. Edmonds bought 100,000 shares; Director Ross E. Roeder bought 20,000 shares; EVP of Chief Information Officer Gary King bought 10,000 shares; EVP- CFO Kent A. Kleeberger, EVP of COO Charles L. Nesbit Jr, and Michael J. Kincaid each bought 5,000 shares of CHS stock; Brand President Colaco Donna Noce bought 4,100 shares; EVP of Human Resources Manuel O. Jessup bought 2,100 shares; SVP of General Counsel A. Alexander Rhodes bought 1,980 shares; and Director David F. Walker bought 1,000.

Chico's FAS Inc. has a market cap of $1.29 billion; its shares were traded at around $7.58 with P/E ratio of 10.11 and P/S ratio of 0.76.

Idearc Inc. (IAR): Down 56% Since David Dreman Bought In the Third Quarter

Idearc, Inc. (IAR) provides yellow and white page directories and related advertising products such as Verizon Yellow Pages, Superpages.com, etc. The company plans to expand its business front by helping customers to turn their websites into online stores. In November, the company’s CFO Andy Coticchio left the company. Due to accounting changes and decrease in advertisement sales, the third quarter profit dropped by 52% to $117 million or $0.80 a share.

While David Dreman bought 252,800 shares between $30.96 and $35.93, Charles Brandes sold out of all his IAR holdings. Currently both John Keeley and HOTCHKIS & WILEY still own IAR shares.

Idearc Inc. has a market cap of $2.2 billion; its shares were traded at around $14.59 with P/E ratio of 5.20 and P/S ratio of 0.67. The dividend yield of Idearc Inc. stocks is 9.2%.

Cummins Inc. (CMI): Down 55% Since Ken Heebner Bought In the Third Quarter

In December, Cummins, Inc. (CMI) completed the sale of its subsidiary Universal Silencer Inc., a noise and air filter manufacturer. The company recently allowed a 2-for-1 stock split and a $500 million shares in buy-back. Analysts expect the engine manufacturer to make good gains as new emission regulations take into effect in 2010.

As David Dreman sold out his CMI holdings, Ken Heebner increased his CMI holdings by 21.5% to 2,332,200 shares. Heebner made his buy between $106.11 and $131.54 a share.

Some insider transactions: Director Georgia R. Nelson bought 750 shares on 10/29/07 at $117.67; CFO Jean S. Blackwell sold 10,000 shares on 09/19/07 at $140; and VP-Corp. Controller Marsha L. Hunt sold 800 on 11/06/07 at $123.53.

Cummins Inc. has a market cap of $10.28 billion; its shares were traded at around $52.68 with P/E ratio of 13.85 and P/S ratio of 0.86. The dividend yield of Cummins Inc. stocks is 0.8%.

Rating: 3.9/5 (11 votes)


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