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

Company

Closing Price 6/6/06

Total value of Stock Purchased

52-Week Change

Actividentity (Nasdaq: ACTI  )

$4.44

$86,212

8%

First American (NYSE: FAF  )

$41.78

$41,800

6%

Manhattan Associates (Nasdaq: MANH  )

$20.10

$200,149

(8%)

Montpelier Re (NYSE: MRH  )

$15.43

$226,500

(55%)

Public Storage (NYSE: PSA  )

$72.90

$2,192,699

16%

Sources: Fool.com, Yahoo! Finance, Form 4 Oracle, SEC filings

Re-upping Montpelier Re
Last month, after I voiced my disagreement with Mad Money host Jim Cramer over his view on Akamai (Nasdaq: AKAM  ) , a reader wrote to remind me that more than one of my Foolish colleagues had recommended insurer Montpelier Re. His point, and I'm quoting here, was that the stock "just keeps going down, so everyone makes mistakes."

The reader was referring to Bill Mann and David Gardner who, respectively, have picked Montpelier Re for Motley Fool Hidden Gems and Motley Fool Stock Advisor. In neither case, as the reader points out, has the thesis produced returns for subscribers. Such is the life of an investor. Sometimes, no matter how well you research, the market fails to agree with you.

And, sometimes, Mother Nature intervenes. When Hurricane Katrina pulverized the Gulf Coast, it did a lot more than ruin the lives of thousands. It also sunk its teeth into insurers and reinsurers in the way of massive increases in claims. But as Bill points out in this comprehensive update to Stock Advisor subscribers, management knew it would one day face just such a situation. And it has since taken steps to improve its capital structure, thereby reducing the risk to its business and investors.

Maybe that's why executives have been on a buying spree. For example, CEO Anthony Taylor bought 50,000 shares in February for $17.93 a stub. Then, one month later, chief financial officer Kernan Oberting picked up 10,000 shares for $16.65 a stub. But he wasn't done; Oberting bought another 15,000 last Thursday at an average price of $15.10 a share.

As Bill writes in his update, 2005 was a rotten year for Montpelier Re and its investors. In that environment, you'd expect morale problems. But on a recent visit to company headquarters in Hamilton, Bermuda, Bill says he sensed none. Instead, he found Montpelier Re to be "a highly professional, highly motivated organization." I'll say. It's hard not to be motivated when your own moola is on the line. This story is far from over, Fool.

Maybe more than zero?
Informed speculations ought to be a part of every winning investor's toolkit. Fellow Fool David Meier introduced another great one to readers of these digital pages yesterday in a top-drawer piece titled "Hero or Zero?"

In a nutshell, Dave's idea is called an "option play," in which the goal is to invest in a company trading for close to the value of the cash it possesses. There's huge risk in such situations, of course. Companies don't trade for close to liquidation value without a good reason. But sometimes, as Dave writes, there's information to be had that others ignore. Investing in such companies can lead to outsized returns.

That leads me to Actividentity, a security company that specializes in smart ID cards and trades near the value of its cash. I've no idea whether this a worthwhile option play (remember, option plays are extremely risky), but I find insider buying going on there to be intriguing. CEO Jason Hart has bought 75,000 more shares since adopting a 10b5-1 trading plan on March 15. Does that qualify as an information edge, Dave?

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 owns shares of Akamai. You can find out what else is in his portfolio by checking Tim's Foolprofile. First American is aMotley Fool Inside Valuerecommendation. The Motley Fool has an ironcladdisclosure policy.


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