Who's Buying Now?

It's Tuesday, and that means it's time to check the most interesting insider purchases from the last week. After checking through numerous filings using insider tracking tool Form 4 Oracle, here are my top five from the past seven days:


Closing price 9/26/05

52-week change

American Eagle Outfitters (Nasdaq: AEOS  )



EnPro Industries (NYSE: NPO  )



Memory Pharmaceuticals (Nasdaq: MEMY  )



Sears Holdings (Nasdaq: SHLD  )



ServiceMaster (NYSE: SVM  )



Sources:, Yahoo! Finance
*Returns adjusted to include the effect of dividend payments.

Thanks for the memories
First up today is Memory Pharmaceuticals, which is developing treatments for diseases of the central nervous system. Yesterday brought good news for the company: It has completed the dosing portion of the safety and tolerability tests for MEM 1003, which is aimed at treating Alzheimer's. That means the drug can move into phase 2a clinical trials. Investors cheered the news, sending the stock higher by almost 20%. But I doubt any were happier than board member Jonathan Fleming. His private equity firm, Oxford Bioscience Partners, one of Memory's original investors, on Friday acquired more than 3.1 million shares for two of its funds and warrants to buy 1.1 million more.

That's positively Fristian timing, isn't it? Sure is, but I find it impossible to call shenanigans. It's not like the investing public didn't know this was coming. Last Wednesday, the company announced that it had completed a $31 million private placement to boost its financial position. The "existing investors" mentioned in the press release surely include Fleming's Oxford Bioscience Partners.

Lichtenstein invades
Let's move on to EnPro, which makes all sorts of industrial parts, including gaskets and seals. It was also a longtime defendant in asbestos suits. Real old-world stuff, and just the kind of company that has helped investor Warren Lichtenstein make big profits over the past year. (Indeed, Lichtenstein, through his management of the Steel Partners II fund, owns several winners, including container cargo maker Cronos Group (Nasdaq: CRNS  ) . Have a look at Cronos' performancevs. the S&P 500.)

EnPro first caught Lichtenstein's eye in October 2003; he started buying again in May, with more than 400,000 shares. He picked up the buying again early last week with about 132,000 more. And late last week, he bought another 34,000. This may or not be good news for management: Lichtenstein is the same investor who was so unhappy with the management of GenCorp (NYSE: GY  ) that he made an unsolicited bid for the firm last November. It was dropped days later and the shares have recovered slightly since.

Another tool for your portfolio?
Finally, let's close with Sears. Chairman and investor Eddie Lampert's retail Frankenstein announced less than two weeks ago that it would use some of its cash hoard to buy back $500 million worth of its stock. That may have prompted board member and former Goldman Sachs (NYSE: GS  ) executive Steven Mnuchin to increase his holdings. Last Tuesday and Wednesday, his hedge fund, Dune Capital, bought 250,000 shares for $116.73 to $120.07 per stub. He also purchased 16,000 shares for himself and his family trust. Ironically, the buys came at roughly the same time as a debate on our discussion board over whether the stock is undervalued. Seems like a question worth asking.

That's all for this week. See you back here next Tuesday, when we dig through more insider deals in search of the next home run stock.

Get the inside scoop on stocks of all sizes with this related Foolishness:

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Fool contributor Tim Beyers usually favors two scoops of ice cream over the inside scoop. Tim didn't own shares in any of the companies mentioned in this story at the time of publication. You can find out what is in his portfolio by checking Tim's Fool profile, which is here. The Motley Fool has an ironclad disclosure policy.

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