Who's Buying Now?

It's a new week, 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

Taxiing toward a double
I've long believed there would be big money to be made in one of the legacy carriers. But I'd have sooner dodged traffic than have placed a penny on shares in beleaguered U.S. Airways. Whoops.

It turns out that the carrier, which completed its restructuring by merging with America West Airlines in September, has trashed the market over the past seven months. It's up 86%, versus roughly 5% for the S&P 500. That's been a boon to early investors, such as PAR Capital and the holding company for Air Canada.

PAR interests me most this week. The Boston-based private equity firm, specializing in transportation stocks, originally invested $100 million in the restructured airline (see page 60 of this filing). Weeks later, it exercised options for four million more shares at $15 apiece, upping its total commitment to more than $160 million -- good enough to account for more than 10% of the shares outstanding.

But the firm wasn't done. In March, it acquired one million more shares in a private transaction valued at $34.84 per stub. Tomorrow it closes on another deal, purchasing an additional 1.75 million shares for $38.60 per stub from Air Canada. All told, PAR has committed roughly $264 million, for a stake that will be worth more than $507 million if the Air Canada transaction goes through as expected.

To be fair, PAR achieved these outsized gains by investing in a bankruptcy, something you or I typically couldn't do, and certainly not with the same extremely favorable terms that PAR received. Nonetheless, a sizable 2.75 million shares of its stake were purchased at very recent prices. That suggests PAR still believes the stock is undervalued. Is that (gulp) possible?

That's hard for me to believe at first blush, so I decided to look at PAR's record. What I found interests me greatly. For instance, the firm joined well-known venture capitalists Sequoia Capital, Battery Ventures, General Catalyst Partners, and Spectrum Equity in funding ITA, a potential Baby Breaker seeking to redefine the business of booking airline tickets. Furthermore, the company's 13F-HR reports, which list comprehensive stock holdings, show that the firm has nearly tripled its asset base since the end of 1999. I consider that an impressive achievement, and it's enough for me to give U.S. Airways shares a second look.

Higher returns calling?
Next up is Intervoice, a competitor to Motley Fool Hidden Gems pick Nuance Communications (NASDAQ:NUAN). On Monday, executive VP and chief operating officer Jim Milton, who joined the company in January, opened a position in the company by acquiring 10,000 shares on the open market.

At first glance, this move seems exceedingly bullish -- but it may not be. On page 16 of the latest proxy statement, you'll find details of the company's stock-ownership guidelines, which say that vice presidents of the company should own shares equal to at least their annual salary. His 10,000 shares, as of this writing, are worth $72,000, a fraction of the $350,000 this filing says he'll be paid during 2006. Accordingly, Fools should expect more buying from Mr. Milton, though I'm compelled to say that he may wish to wait till the firm's forward P/E drops a bit from the 28 at which it resides today.

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.

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

• Who was buying last time?
• Don't go anywhere; the rally isn't over.
• Better hedge your bets.
• Don't buy into CNBC's portfolio challenge fallacy.

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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 . The Motley Fool has an ironclad disclosure policy .