Yabuki’s personal investment in Fiserv sparks analyst attention

CEO buys 3,000 shares on open market, analysts see as sign of company’s good health

When Jeff Yabuki, CEO of Brookfield-based Fiserv Inc., bought 3,000 shares of the company’s stock last week on the open market in the $45 per share range, analysts took note.

In a note released on June 8, the day after Yabuki’s purchase, analysts with Milwaukee-based Robert W. Baird & Co. said the stock buy appeared to show his confidence in the continued performance of the company.

“Recall that on the Q1 conference call, management was confident in achieving its 1-3% organic revenue growth guidance for 2010 despite reporting -1% organic revenue growth during Q1-10,” Baird analysts David Koning and Timothy Wojs wrote. “We think this confidence in revenue visibility stems from contracts signed, prospective deals still in the pipeline, and new product launches.”

The Baird analysts say they expect Fiserv to repurchase about 4 million shares during 2010.

“We think it is reasonable to think that the company is repurchasing stock if the CEO himself is buying it,” their note says.

Koning and Wojs believe that Fiserv could have earnings between $3.96 and $4.07 per share for fiscal 2010, compared to the company’s 2009 earnings of $3.66.

“We believe the higher end of EPS guidance is quite achievable with limited core improvement,” the note says. “This is based on the company’s expectation of $40 million of 2010 cost savings, our expectation that the company repurchases 4 million shares of stock, and the benefits of lower interest rates with the recent hedge rolling off.

 

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