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 this week.

The week's buying

Company

Closing Price 9/18/07

Total Value Purchased

52-Week Change

Caribou Coffee (NASDAQ:CBOU)

$6.55

$129,940

(15%)

Citizens Communications (NYSE:CZN)

$13.82

$142,198

3%

L-1 Identity Solutions (NYSE:ID)

$17.81

$834,889

25%

MVC Capital (NYSE:MVC)

$18.27

$899,104

39%

ZymoGenetics (NASDAQ:ZGEN)

$12.81

$3,487,135

(25%)

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

Citizens, lend me your wallets
When it comes to insider buying, patterns matter. For example, if insiders typically buy stock during the summer months, and these buys are usually successful, then it's probably worth adding the stock to your watch list in spring.

Patterns are what draw me to Motley Fool Income Investor pick Citizens Communications. But I may be in the minority. Here's how our Motley Fool CAPS community rates the stock:

Metric

Citizens Comms

CAPS stars (5 max)

***

Total ratings

269

Bullish ratings

245

Bull ratio

91.1%

Bearish ratings

24

Bear ratio

8.9%

Bullish pitches

43

Bearish pitches

5

Data current as of Sept. 19, 2007.

Three stars isn't exactly a ringing endorsement for this rural telecom. Why are investors hanging up on the stock? Sales. Second-quarter revenue came in lighter than some apparently expected.

But such short-term thinking could be a mistake. Foolish colleague Dave Mock explains why here. Quoting:

The company hasn't backed down from cash flow guidance of between $500 million and $520 million for 2007, and it maintains its positive outlook. With the integration of Pennsylvania properties bought from Commonwealth Telephone going well, the company expects more opportunities for growth in the quarters ahead. [Emphasis mine.]

That's not just talk. Director Jeri Finard and chief financial officer Donald Shassian on Friday combined to purchase 10,500 shares of company stock. For Finard, it was her first direct purchase. (She has the right to acquire 10,000 more shares via options, however.)

Finally, let's talk patterns. Finard and Shassian bought shares for between $13.50 and $13.59 a share. The last insiders before them to purchase stock did so in March 2006. That's when sales vice president Peter Hayes and director Leroy Barnes Jr. bought 12,000 shares for between $13.28 and $13.60 apiece. Neither has sold.

Coincidence? Probably not. Look for Citizens in my CAPS portfolio.

Maybe the Feds finally have it together?
ZymoGenetics almost got my top pick this week for the sheer volume of buying. Trouble is, there was only one buyer: Jonathan Leff, a partner at Warburg, Pincus, who's also a ZymoGenetics board member. ­­His firm purchased more than 297,000 shares between Tuesday and Thursday of last week.

I'm interested in what's motivating the buys. My guess is that increased confidence that the Prescription Drug User Fee Act (PDUFA) will be reauthorized is behind them. If that's the case, demoralized FDA staffers could soon be back to working on marketing approval for ZymoGenetics' recombinant Thrombin. And that, in turn, would heal the paper cut the Feds delivered last month. Keep an eye on this stock, Fool.

That's your update. See you back here next week when we dig through more insider deals in search of the next home run stock.

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Related Tickers

12/31/1969 7:00 PM
CBOU.DL $0.00 Down +0.00 +0.00%
Caribou Coffee Com… CAPS Rating: ***
ID.DL $0.00 Down +0.00 +0.00%
L-1 Identity Solut… CAPS Rating: ***
MVC $11.05 Down -0.08 -0.72%
MVC Capital, Inc. CAPS Rating: ***
ZGEN.DL $0.00 Down +0.00 +0.00%
ZymoGenetics, Inc. CAPS Rating: ***

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