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 now:

The week's buying

Company

Closing Price 2/27/07

Total Value of Stock Purchased

52-Week Change

Enterprise Products Partners (NYSE: EPD  )

$30.16

$58,533

23%

Home Bancshares (NYSE: HOMB  )

$23.09

$55,209

16%*

General Growth Properties (NYSE: GGP  )

$62.49

$3,299,200

27%

James River Group (Nasdaq: JRVR  )

$29.50

$150,075

31%

TEPPCO Partners (NYSE: TPP  )

$42.74

$84,660

16%

Sources: Fool.com, Yahoo! Finance, Form 4 Oracle, SEC filings
* Home Bancshares began trading on June 23, 2006.


Should you play "follow the entrepreneur"?
My favorite strategy is to invest alongside owners. Entrepreneurship, after all, most frequently leads to billion-dollar fortunes.

Take Dan Duncan, for example. He founded energy-services firm and Income Investor recommendation Enterprise Products Partners in 1968. Today, he ranks 34th on Forbes' list of the 400 richest Americans, with $6 billion to his name.

That doesn't seem to be enough for him, though. For years, Duncan has been a consistent -- and consistently smart -- buyer of his company's shares. I'm inclined to get interested when he's buying. I get even more interested when other insiders follow suit.

That's what we have with TEPPCO, a pipeline operator in which Duncan acquired a partnership stake from Duke Energy (NYSE: DUK  ) for $1.1 billion. Now, two insiders -- CEO Jerry Thompson and vice president John Goodpasture -- have combined to spend more than $170,000 to pad their own portfolios.

What gives? For one, a check of TEPPCO's competitors at Yahoo! Finance shows that the firm trades for a massive discount to peers on a price-to-sales basis.

Then there's the overwhelmingly bullish sentiment for both Enterprise Products and TEPPCO among participants in our Motley Fool CAPS investor-intelligence database:

Metric

EPD

TPP

CAPS stars (5 max)

*****

****

Total ratings

182

64

Bullish ratings

178

62

Bull ratio

97.8%

96.9%

Bearish ratings

4

2

Bear ratio

2.2%

3.1%

Bullish pitches

35

15

Bearish pitches

1

0

Note: Data current as of Feb. 21, 2007.

I'll let All-Star CAPS player pennysplants explain the thesis:

"[TEPPCO] will soon return more [master limited partnership] income to shareholders (see upcoming 2006 unit holders meeting agenda). Currently priced under inherent value while returning nice 7.20% yield. ... Investing in capital improvements should/could make for better returns going forward. ... I see this as a 'growth and income' addition to my Roth IRA portfolio ... mostly income."

I'll add that research has consistently favored stocks where multiple insiders are buying. With a high and increasing yield, and the backing of a billionaire, I'm inclined to give this stock a try in my CAPS portfolio.

More growth at General Growth?
When Foolish colleague Nate Parmelee singled out mall operator General Growth Properties over the summer, I should have listened.

But watching the insiders, I wonder whether a buying opportunity still remains. Last week, chief financial officer Bernard Freibaum purchased 50,000 shares on the open market at nearly $66 a stub. That came after he exercised, but didn't sell, 360,000 shares at $42.19 each.

Yesterday, corporate development chief Jean Schlemmer also exercised, but didn't sell, another 34,000 options. That's a lot of buying. Could Nate, who wrote that the shares might be worth $60 or more, have been lowballing it? I can't help but wonder. Color me curious enough to add General Growth to my CAPS watch list.

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 775 out of more than 23,500 in CAPS, 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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