Who's Buying Now?

I'm back from a week's vacation, which means it's time to check the most interesting insider purchases. After reading through numerous filings using insider tracking tool Form 4 Oracle, here are my top five from the past seven days:

The week's buying

Company

Closing price 3/21/06

Total value of stock purchased

52-week change

Fossil (Nasdaq: FOSL  )

$18.68

$1,247,277

(26%)

LCA-Vision (Nasdaq: LCAV  )

$45.30

$530,052

43%*

Oakley (NYSE: OO  )

$15.13

$1,731,414

14%*

UGI (NYSE: UGI  )

$21.83

$264,564

(2%)*

Vail Resorts (NYSE: MTN  )

$37.45

$1,024,650

49%

Sources: Fool.com, Yahoo! Finance, Form 4 Oracle, SEC filings.
*Returns adjusted to reflect the effect of stock splits.

Seeing returns?
Research suggests that insiders like value as much as the next investor -- they tend to buy when others unfairly discount their firms' shares. That may be what's going on at laser-eye-surgery center operator LCA-Vision. Over the past two weeks, two different insiders have added to their positions: Interim CEO Craig Joffe and incoming chairman Anthony Woods. (Founder and former chairman and CEO Stephen Joffe also bought stock, but that doesn't mean much to me in light of his decision to transfer the bulk of his ownership to a nonprofit foundation.)

What's the investing case for LCA-Vision? It isn't entirely clear, but neither is it entirely blurry. For example, the company trades for roughly 20 times forward earnings. That's reasonable for a firm that has grown its bottom line by a little more than 60% annually over the past five years and is expected to expand it by an annual 39% more over the next five.

But there's a problem: Despite strong results in the most recent quarter, guidance was lower than analysts expected. That makes the company's heady growth expectations somewhat suspect. Investors agreed and, on the day of the miss, cut LCA's shares by 16%. The stock still trades well below its February high of $55.89.

Executives don't seem to think the haircut is merited. They may be right, of course, but investors following in their footsteps would be betting on massive expectations for growth on which LCA-Vision has yet to prove it can deliver. In other words, be careful, Fool.

UGI not so ugly
Great stocks are often boring. Take UGI, which is a holding company for businesses that deal in propane gas and other fuels. You've probably dealt with its AmeriGas unit if you own a gas barbeque.

The stock hasn't done much for investors lately, but that could be about to change. Both newly minted director Robert Vincent, himself a former financier, and company president John Walsh have been snapping up shares. Walsh's latest buy came just yesterday and nearly doubled his ownership interest.

More interesting to me, however, is the fact that Walsh's holdings include fractional shares. The partial stubs strongly indicate that he's reinvesting UGI's meaty 3.1% dividend payment, which has persisted for -- get this -- more than 120 years. I find Walsh's plan alluring from an investment perspective, especially in light of Jeremy Siegel's groundbreaking research proving that dividend-paying stalwarts have made for the best investments over the course of decades.

Fossil revived
Just when you thought the Fossil story was over, CEO Kosta Kartsotis is back, and carrying with him a new 10b5-1 plan that allows him to buy up to 200,000 more shares of the watchmaker.

No other details were available in SEC filings, but in a short interview today, chief financial officer Mike Kovar told me that Kartsotis filed the new plan shortly after earnings were announced in late February, and that it expires in May. Kartsotis is apparently allowed to purchase up to 70,000 shares per week, and given recent history, I'd say it's likely that all of those stubs will be snapped up by Friday.

When asked whether Kartsotis listed a purpose for his buying in the 10b5-1 filing, Kovar said that, in effect, Kartsotis believes the shares are sharply undervalued and that recent developments are "not indicative of the firm's long-term growth, from a financial statement perspective." OK, but stagnating sales and unmet guidance don't inspire much confidence. Time will tell whether he's right or not.

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

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Fool contributorTim Beyersusually 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's in his portfolio by checking Tim's Foolprofile. The Motley Fool has an ironcladdisclosure policy.


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