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 11/27/07

Total Value Purchased

52-Week Change

Autonation (NYSE:AN)

$15.75

$19,886,743

(22.95%)

Cabela's (NYSE:CAB)

$15.59

$940,788

(35.34%)

Fannie Mae (NYSE:FNM)

$29.40

$1,532,672

(47.87%)

Inland Real Estate (NYSE:IRC)

$14.32

$1,563,936

(24.47%)

Limited Brands (NYSE:LTD)

$17.93

$7,586,522

(41.56%)

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

Another look at Limited
Isn't it funny how some stocks sometimes stalk you? For me, it's the momentum stocks. I have recurring nightmares of the raggedy classroom that Gabe Kaplan kept in Welcome Back, Kotter. The Sweathogs are all there: Vinnie Barbarino, Freddy "Boom Boom" Washington, Juan Epstein. The whole gang.

All, that is, except Horshack. He's gone. In his place are the Google twins, Larry and Sergey, hands raised in the front row, yelling at me with Horshack's signature whiny tone: "Ooh! Ooh! Ooh! Pick us! Pick us!"

Not today, fellas. Limited Brands is following me again, and I can't seem to avert my eyes. Blame the Victoria's Secret lingerie, if it'll make you feel better.

Or take solace in knowing that I'm among few in our 75,000-strong Motley Fool CAPS community who look at Limited and see a stock worth a second look:

Metric

Limited Brands

CAPS stars (5 max)

**

Total ratings

381

Bullish ratings

326

Bull ratio

85.6%

Bearish ratings

55

Bear ratio

14.4%

Bullish pitches

47

Bearish pitches

7

Data current as of Nov. 27, 2007.

I've said it before, and I'll say it again: I think these Fools are missing something, and not just because Motley Fool Inside Value lead advisor Philip Durell recommended the stock in the August issue. Nope, I like the buying. Insiders have spent nearly $7.6 million since Friday on shares of Limited.

And it gets better. Even though CEO Leslie Wexler has put up much of the capital, nine different executives and board members have been buying. That can't possibly be a coincidence, can it? Not in my book.

More likely, as I see it, is that these insiders believe that Limited's not-at-all sexy third-quarter results, which featured a 3% decline in comps and a (gulp) 48% drop in profits, is an aberration rather than a pattern.

They've good reason. From 2004 to 2006, Limited's management produced consistently higher returns on capital. Now, they're betting millions on seeing those days again. I believe they will.

Market timing at Cabela's?
Sporting-goods retailer Cabela's, one of Bill Mann's very few losers for Motley Fool Hidden Gems, is a similar story. According to Form 4 Oracle, insider buying has been intense -- almost $1 million over the last week.

The difference? Namesake owners Richard and Mary Cabela are solely responsible for that sum. But others were buying in the not-so-distant past. Board members Stephen Murray and John Edmondson added shares in early November. Fellow director Theodore Armstrong was buying in September.

But this all comes with a giant caveat: Murray sold 100% of his direct holdings at $24 a share in March. Now that the stock trades for less than $17, he's buying again. It's enough to make me wonder whether he believes $24 to $25 per share fully values Cabela's. (He sold at $25 per share at this time last year.)

If so, be worried. Murray is a professional investor -- president and chief operating officer of private-equity firm CCMP Capital Advisors. It's entirely possible that he's buying and selling on the basis of valuation.

Yet because private-equity firms often move millions -- or even tens of millions -- in capital daily, it's also possible that Murray's trades are more about capital allocation than about valuation. Which (sigh) leaves us investors with a vexing mystery. Proceed with caution, Fool.

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

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