Who's Buying Now?

My apologies, Fools. Last week, I was traveling and had to skip Wednesday's column.

But now I'm back, and that 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 now:

The week's buying

Company

Closing Price
2/13/07

Total Value
of Stock Purchased

52-Week
Change

Agere Systems (NYSE: AGR  )

$19.05

$298,444

41%

Citigroup (NYSE: C  )

$53.71

$23,781

16%

Informatica (Nasdaq: INFA  )

$13.34

$510,099

(5%)

Marten Transport (Nasdaq: MRTN  )

$15.24

$71,985

(29%)

Medis Technologies (Nasdaq: MDTL  )

$16.08

$65,700

(13%)

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

The info on Informatica
As a stock picker, I'm most interested in tech and growth. So my Foolish radar blinks excitedly when I find both. That's what I think I've got in Informatica, whose software allows data to flow effortlessly through an organization.

Technically, there's more to it than that. Think of how businesses operate. There's manufacturing, inventory management, accounting, customer records, and so on. Frequently, these systems collect and organize information differently. In practical terms, this makes the job of understanding, say, how much inventory is still required to fill an outstanding order exceedingly difficult.

Unless, that is, you have software that speaks the languages of both the customer records system and the inventory system. That's where Informatica comes in. As Motley Fool CAPS player and techie robg760 puts it, "Integration involves consolidating information from multiple systems into one place, and it is something that every company (large and small) has an interest in doing."

On the whole, the Fools participating in our Motley Fool CAPS investor-intelligence database agree:

Metric

Informatica

CAPS stars (5 max)

**

Total ratings

36

Bullish ratings

30

Bull ratio

83.3%

Bearish ratings

6

Bear ratio

16.7%

Bullish pitches

4

Bearish pitches

0

Data current as of Feb. 13, 2007.

Count me among the converted, too. Why? Informatica, at 22 times projected 2007 earnings, trades for a very modest premium to its five-year projected growth rate of 20%. That's also well below the industry average P/E of 32.

Then there's the buying of CEO Sohab Abbasi. On Feb. 2, he dropped a cool half-million to boost his stake by 40,000 stubs. And that was days after he and two other top managers bought shares via Informatica's employee stock-purchase plan.

Either these managers are free-spending loons, or they have good reason to believe that Informatica's stock is heading higher. I think it's the latter. Therefore, I'm adding a position in my CAPS portfolio.

Medis: probably still sick
Not so much with Medis Technologies, which purports to sell portable liquid fuel cells. I'll let CAPS All-Star bbmaven explain:

"This company has NEVER had a product despite years and years of promises. ... The $57M in financing they now have is a result of the secondary they issued in October -- both preferred shares and matching common. They issued the matching common for the specific purpose of allowing the new investors to short the common, eliminating any risk to their investment, and 'cautioned' us existing shareholders that this 'could' have a negative effect on the price of the common. ... No kidding."

Or, in simpler terms, Medis appears to be issuing stock to, um, issue stock.

But the story gets worse when you examine the transactions. For example, company president Jacob Weiss bought 5,000 shares last Monday after selling more than 45,000 shares in December -- and for a much higher price than the stock trades today.

I'll not begrudge Jacobs his profits -- this is America, after all -- but given the circumstances, it's impossible to call his buying bullish. At best, he's a trader with good timing.

Giving Foolish credit where it's due
Finally, it's props time.

Whether you love or hate what CEO Charles Prince is doing with Citigroup, you have to respect his willingness to teach his kids how to invest. They're doing it well. Last year, one of his teens spent more than $11,000 to acquire shares that, today, are trading 16% higher before dividends.

Now they want more. On Feb. 2, Prince authorized another purchase, this time for more than $23,000. Will it work out? I hope so, but that's not the point. Investing success is more often borne of a regular, unemotional commitment to putting money to work than it is of excellent market timing. (Though that never hurts.)

By encouraging his children to continuously invest, Chuck has them behaving Foolishly. Keep it up, kids, and you may one day be richer than your dad.

That's all for now. See you back here next week, 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 related Foolishness:

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Fool contributor Tim Beyers, ranked 998 out of more than 22,500 in our Motley Fool CAPS investor intelligence database, usually favors two scoops of ice cream over the inside scoop. Tim didn't own stock in any of the companies mentioned in this story at the time of publication. All of his portfolio holdings can be found at Tim's Fool profile. His thoughts on insider buying, Foolishness, and investing in general may be found in his blog. The Motley Fool's disclosure policy is a strong buy.


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