Who's Buying Now?

It's a new week, and that means it's time to check in again on the most interesting recent insider purchases.

After reading through numerous filings using insider tracking tool Form 4 Oracle, here are my top five.

The week's buying

Company

Closing Price 4/24/07

Total Value of Stock Purchased

52-Week Change

Capitol Bancorp (NYSE:CBC)

$28.61

$97,096

(29%)

Community Trust Bancorp (NASDAQ:CTBI)

$33.93

$401,720

4%

GenTek (NASDAQ:GETI)

$33.29

$69,334

31%

Goodrich Petroleum (NYSE:GDP)

$34.60

$2,067,551

24%

Trailer Bridge (NASDAQ:TRBR)

$11.14

$41,009

21%

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

Good for Goodrich
As much enjoyment as I get writing this column, I have to admit that there are instances when insider buying means nothing.

Consider the case of Ultralife Batteries (Nasdaq: ULBI  ) , which makes ... well, you know. I last singled out Ultralife in this column nearly a year ago. At the time, CEO John Kavazanjian had spent $137,802 to bolster his position at an average price of $11.04 a stub. The Grace Brothers hedge fund -- a 10% owner -- was also accumulating shares. But none of that has mattered: The stock has fallen 16% since.

Investing can be like that, which is why, in my search for interesting insider buys, I prefer to see multiple executives and board members buying at the same time. That's what we have with Goodrich Petroleum.

In this case, two insiders are buying: investor and board member Josiah Austin and chairman Patrick Malloy. Austin's buying has been continuous, and according to Barron's, he now owns more than 20% of the company.

Malloy's purchases have been more studied but extremely successful. For example, the $456,741 he spent on 20,000 shares last June is now worth roughly $687,000 -- a 50% gain in one year. Malloy, also a 10% owner, added 10,000 stubs to his portfolio last Thursday.

Could he be on the money again? The Fools rating the stock in our Motley Fool CAPS investor-intelligence database have mixed feelings:

Metric

Goodrich

CAPS Stars (5 max)

***

Total Ratings

26

Bullish Ratings

22

Bull Ratio

84.6%

Bearish Ratings

4

Bear Ratio

15.4%

Bullish Pitches

2

Bearish Pitches

1

Data current as of April 25, 2007

Three stars hardly makes for a ringing endorsement. That said, the CAPS All-Stars -- those whose picks have outperformed at least 80% of the field in the CAPS database -- are 89% bullish when it comes to Goodrich. I'll let CAPS participant Naicinvestorz explain the thesis:

[Goodrich] is cheap! ... You are currently buying [the stock] at less than year-end '06 [net asset value]. [Goodrich] is hedged successfully for 2007 and shouldn't be hit as hard should natural gas prices stay weak for longer.

He's referring to the Henry Hub price per million BTUs (MMbtu), which today stands at roughly $7.54 for natural gas. Though that's down from a year ago, Goodrich has futures contracts in place for the 2007 first quarter that allow it to sell 10,000 MMbtu each day at a locked-in price of $7.77 per MMbtu. What's more, according to a recent 8-K filing, management just added 2008 contracts that allow for selling as many as 33,000 MMbtu per day for no less than $8.00.

Don't ask me what, exactly, that all means. What I can tell you is that it suggests that Goodrich is at least moderately prepared for poorer times -- a suggestion that's backed up by significant insider buying. Whether that makes Goodrich a buy is a question better left to those smarter than I am when it comes to this business. Nevertheless, I'll be adding the stock 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:

Get all the inside information you need in our collection of investing newsletters. From wallflowerish small caps to swashbuckling Rule Breakers, we've got something for every investor. Get in on the action today; all of our newsletters offer a 30-day risk-free trial. All you have to lose is the prospect of better returns.

Fool contributor Tim Beyers, who is ranked 3,184 out of more than 27,800 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 his 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.


Read/Post Comments (0) | Recommend This Article (19)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 526563, ~/Articles/ArticleHandler.aspx, 8/22/2014 2:08:18 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement