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 7/11/06

Total value of stock purchased

52-week change

Avid Technology (Nasdaq: AVID  )

$33.99

$21,919,326

(39%)

BioMarin Pharmaceutical (Nasdaq: BMRN  )

$14.89

$21,659

99%

Cooper Companies (NYSE: COO  )

$44.05

$555,961

(32%)

Fossil (Nasdaq: FOSL  )

$18.40

$305,972

(26%)

Jackson HewittTax Service (NYSE: JTX  )

$31.66

$250,287

27%

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

Action Jackson
Spend enough time here at Fool.com and you're apt to come across the word "catalyst." That's because the best investments tend to have a fundamental reason to head north. For tax preparer Jackson Hewitt, there have been several since Chief Financial Officer Mark Heimbouch sold off a third of his existing position in the stock in March.

Among the most notable of improvements was a mid-June dividend hike. Jackson Hewitt bumped its quarterly payout by a breathtaking 50%, increasing its current yield to a respectable 1.5%. Moreover, the boost came on the heels of a strong April quarter during which the tax preparer earned more per return.

In the midst of all this good news, Heimbouch and Jackson Hewitt General Counsel Steven Barnett began buying. Barnett opened a position with 4,500 shares last Wednesday, while Heimbouch started accumulating stubs on Friday, June 30. His latest purchase came just yesterday.

But is the renewed optimism justified? I mean, there must be more to this company than a good quarter and a beefier dividend, right? Right. Margins are on the rise, return on capital remains in the double digits, and the firm is buying back shares. Moreover, as fellow Fool Ryan Fuhrmann pointed out recently, Jackson Hewitt trades for a very small premium to larger peer H&R Block (NYSE: HRB  ) while offering far more impressive growth potential. Color me convinced. I'm adding Jackson Hewitt to my ever-expanding watch list.

Blum's next buy
Though I've come to focus this column on executive purchases, I still sometimes find myself enthralled by institutional investors. Blum Capital is one. This private equity firm says its value-driven approach has beaten both the S&P 500 and Russell 2000 since 1975.

There's no way to verify that claim, of course. But Blum's return from its investment in ITT Educational Services (NYSE: ESI  ) is nearly as impressive. Roughly one year ago, Blum spent more than $18 million to acquire 350,000 shares of ITT. Today, that position is up nearly 25%, worth roughly $22.7 million. Nice.

That's why I'm interested in Avid, which makes digital video production software and equipment. Blum has been buying shares of the company for a while now but, in June, became a 10% owner of the business. Is the stock worth it? It's certainly possible. Avid trades for just 13 times forward earnings and remains the heavy hitter when it comes to bringing digital effects to life on the big screen.

Still, earnings have proven to be an ongoing drama rife with unpredictable twists. That may be great for the movies, but it stinks for investors. My respect for Blum notwithstanding, I'd rather wait for the DVD when it comes to this stock story.

And that's all for this week. 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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