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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.

The week's buying


Closing Price, 5/22/07

Total Value of Stock Purchased

52-Week Change

Cirrus Logic (NASDAQ:CRUS)




General Growth Properties  (NYSE:GGP)




Inland Real Estate (NYSE:IRC)




Owens Corning  (NYSE:OC)




Redwood Trust (NYSE:RWT)




Sources:, Yahoo! Finance, Form 4 Oracle, SEC filings.
*Owens Corning began trading on Nov. 1, 2006.

Real property, real returns
Today's real estate investors are either brilliant or stupid. My money's on "brilliant."

I'm not suggesting that the subprime crisis is overblown. Lending practices got out of control. Thousands of people lost money. Home prices, rightly, are beginning to normalize as banks foreclose on the American Dream.

But this malaise won't last forever. And some real estate stocks have been sold off undeservedly. Some of them have appeared in this column. Luminent Mortgage Capital (NYSE: LUM  ) , which starred in the April 20 edition, comes to mind.

Equally, I think there's a lot to like about the real estate trusts that made today's cut. Consider Inland Real Estate, which owns retail properties across Chicago and Minnesota.

Even though the stock gets an awful rating in CAPS -- 69% say the stock will underperform -- this investor presentation, buried in the SEC's EDGAR database, paints a decent picture.

Not only that, but insiders have been scooping up shares since February. Founder and controlling shareholder Daniel Goodwin has spent more than half a million dollars on stock in the last week alone.

But I digress. Inland isn't my favorite insider buy this week. Redwood Trust is. Redwood Trust invests in, and sometimes originates, jumbo mortgage loans. "Jumbo" is industry-speak for a loan that's generally higher than $340,000. Loans of that size are commonplace in Redwood's Northern California backyard.

You'd think investing in any company that's serving up that much moola to homeowners is, well, crazy. Perhaps, but those rating the stock in our Motley Fool CAPS investor intelligence database are mostly bullish:


Redwood Trust

CAPS stars (out of 5)


Total ratings


Bullish ratings


Bull ratio


Bearish ratings


Bear ratio


Bullish pitches


Bearish pitches


Data current as of May 23.

So is Foolish editor David Meier, a retail maven who's been following the stock for years. Quoting from his love letter to management in 2005:

So why do I love this company? Because it is very good at what it does. Plain and simple. Oh, and it doesn't hurt that its business model is completely scalable. Stated another way, the longer Redwood stays disciplined, the more loans it can own or enhance, the more money it can make.

The key word there is "disciplined." Dave told me earlier today that, when the market for big loans was getting pricey last year, Redwood decided to do fewer deals. Now, with net interest income rising in the first quarter, it appears that management's emphasis on keeping a high-quality real estate portfolio is paying off.

For investors, especially. On Monday, Redwood raised its common dividend to $0.75 in the first quarter, up 7% from the prior year.

From 2001 to 2006, Redwood has increased its common dividend by an average of 4.8% annually. Add to that Redwood's current yield of 6.0% and it appears the insiders buying today could take home a 10.8% annual return, and perhaps a lot more. (Redwood Trust has paid special dividends every year.)

Color me interested enough to join the bullish herd following Redwood Trust later today.

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, who is ranked 4,507 out of more than 29,200 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. Tim's 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 only stays inside when it has to.

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Related Tickers

10/26/2016 4:00 PM
CRUS $52.65 Down -1.09 -2.03%
Cirrus Logic CAPS Rating: ****
GGP $25.46 Down -0.59 -2.26%
General Growth Pro… CAPS Rating: **
IRC.DL $10.61 Down +0.00 +0.00%
Inland Real Estate CAPS Rating: **
RWT $14.27 Down -0.11 -0.76%
Redwood Trust CAPS Rating: *****