I’m calling these ‘smart money’ buys because the following 5 stocks were recently acquired by super investors or so-called gurus.

Let’s get to it. Richard Pzena of Pzena Investment Management LLC (PZN) was sitting on 6,888,221 shares of Omnicom Group, Inc. (OMC) at the close of the second quarter. Our goal is to examine this stock and gather some insights into his motives for acquiring this stock.

Omnicom is an advertising agency in the service sector. Now my first thoughts are, “How much are businesses reducing advertising budgets in this economy? Most companies would be slashing operating budgets to meet earnings projections, wouldn’t they? If that’s true, why would anyone invest in an enterprise with diminishing prospects? What does he see in this stock?”

As we trudge through the numbers, it is apparent that OMC is not the darling of the analysts. It isn’t on the radar as a ‘strong buy’, only moderate! The return on equity of 23.64 does suggest that it is well managed and the price to book of 3.16 is somewhat comforting. Projected earnings growth of 1.21 is good, but a look at all the fundamentals reveals nothing that rockets off the page screaming, “Buy this stock!”. OMC offers a decent dividend yield of 2.40%, but so do a host of others.

As I continued to explore beyond the fundamentals, I learned that OMC touts the highest sales per share in the advertising industry. I stumbled on the fact that OMC added some 2500 employees in the closing weeks of 2010, interesting, to say the least. To continue reading, click here