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


Closing Price 9/19/06

Total Value of Stock Purchased

52-Week Change

Oxigene (Nasdaq: OXGN  )




Reynolds American (NYSE: RAI  )




Quest Resource Corp. (Nasdaq: QRCP  )




Viacom (NYSE: VIA  )




W&T Offshore (NYSE: WTI  )




Sources:, Yahoo! Finance, Form 4 Oracle, SEC filings.
*Data goes back only as far as Dec. 5, 2005.

Offshore profits?
My favorite insider buying situations feature a committed CEO and a reasonable thesis for purchasing shares. That may be the case with W&T Offshore.

Founded by partners Tracy Krohn and Jerome Freel in 1983, W&T operates oil and natural gas wells in the Gulf of Mexico. If you're thinking that's a dangerous place to be, you're right. But business has recovered well since Hurricanes Katrina and Rita pounded W&T's wells last summer: Revenue is up 17% over the trailing 12 months, while profits have risen 21% over the same period, according to Capital IQ.

Investors, however, remain unimpressed. The stock is down 14% year over year, and 38% below this May's highs. I've got no idea why, but my Foolish colleague, Tim Hanson, may have a clue. In pitching the stock for Motley Fool CAPS, our new service where Fools square off to see who's the best investor, Tim writes:

As a result of a recent acquisition from Kerr-McGee, W&T may be sitting on a trillion cubic feet (TCF) of natural gas reserves in the Gulf of Mexico. That's one of the largest reserves sitting right next to one of the largest markets in the world. I like that position.

Insiders, it seems, feel similarly. Last Tuesday, Krohn coughed up $3 million to add 109,000 shares to an already massive position in the stock. (Krohn owns roughly 40.9 million shares, or more than 53% of the total outstanding.) That sort of commitment shouldn't go unnoticed. But so long as it is, I'm happy to take advantage. Into the CAPS portfolio you go, W&T.

More 10b5-1 buying
Over the past few months, I've uncovered a few situations where managers have filed 10b5-1 trading plans in order to buy shares. Understanding why these are somewhat weird requires understanding what a 10b5-1 plan is.

As with 401(k) plans, the 10b5-1 is named for the SEC rule that created it, which says that insiders can buy or sell shares at any time, so long as they have no direct control over the transactions. Instead, everything must be prearranged. Computers press the buy and sell buttons.

For selling, this makes sense. After all, most insiders get their shares so cheap that they're practically guaranteed a profit. But programmed buying? That's like playing poker blind; you've got no idea whether you have a good chance at making a profit.

Nevertheless, executives do it. Three that I've profiled in recent months are CEO Kosta Kartsotis of Fossil (Nasdaq: FOSL  ) , and CEO Vijay Samant and CFO Jill Church of biotech Vical (Nasdaq: VICL  ) . Not surprisingly, their buying has had mixed results. Fossil is up 10% since my February write-up. Vical, on the other hand, is down 16% since my April profile.

That's why I'm skeptical of the purchases of Quest Resource CEO Jerry Cash. Much as I appreciate his consistency -- Cash has made purchases in each of the last three months -- all of his 10b5-1 trades have been staggeringly small compared to his overall position. I'd need to see much more faith in the way of bigger purchases to pledge any of my own money on this fledgling natural-gas producer. Sorry, Jerry.

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. Get the skinny on all of the stocks in his portfolio by checking Tim's Foolprofile. The Motley Fool'sdisclosure policyis a strong buy.

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5/27/2016 4:02 PM
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