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 12/11/07

Total Value Purchased

52-Week Change

CapitalSource (NYSE:CSE)

$17.71

$116,612,255

(37.75%)

Chico's FAS (NYSE:CHS)

$10.47

$1,137,446

(52.08%)

Clean Energy Fuels (NASDAQ:CLNE)

$15.14

$10,941,500

25.74%*

Jamba (NASDAQ:JMBA)

$5.05

$427,750

(50.73%)

Syntax-Brillian (NASDAQ:BRLC)

$2.70

$2,171,200

(71.58%)

Sources: Fool.com, Yahoo! Finance, Form 4 Oracle, SEC filings.
* Clean Energy Fuels began trading May 25, 2007.

Juice your returns
It's been a rough few months for owners of would-be juice king Jamba. (Raises hand.) Thanks to declining comps, health concerns, and poor earnings the stock is down more than 50% over the past year.

Jamba's astonishing lack of progress has me questioning my thesis for owning shares: that the juicer will be able to successfully expand into eastern markets where it doesn't currently have locations and, as it does, produce Starbucks (Nasdaq: SBUX  ) -sized returns.

Turns out I had a lot of company in my positive view. Our 77,000-strong Motley Fool CAPS community has (mostly) maintained a respectable four-star rating for Jamba since June:

Metric

Jamba

CAPS stars (5 max)

****

Total ratings

545

Bullish ratings

513

Bull ratio

94.1%

Bearish ratings

32

Bear ratio

5.9%

Bullish pitches

119

Bearish pitches

9

Data current as of Dec. 12, 2007.

Bulls are harder to find today, though. Bears comprise six of the last 12 ratings in CAPS and, of those 12, the only All-Star to rate the stock gives it a thumbs-down. Ouch.

But what if Jamba were to possess the same expansion possibilities as, say, Chipotle (NYSE: CMG  ) ? They're nowhere near each other when it comes to valuation:

Chain

Price-to-Sales

Current P/E

Jamba

0.93

5.38

Chipotle

4.69

76.59

Sources: Yahoo! Finance, Capital IQ, a division of Standard & Poor's.

Perhaps the gulf explains the four-star rating? Jamba may be speculative at these levels, but a fast-grower rarely gets valued at just $0.93 per dollar of revenue.

Insiders apparently believe that's a bargain. Three different executives and board members were buying as of last Thursday and Friday, including controller Karen Luey.

My take: If anyone knows whether Jamba has the capital to expand effectively, it'd be her. I see no reason to be selling as long as she and her peers are buying.

A brilliant time for Syntax-Brillian?
For weeks now, a reader has been admonishing me to examine HDTV manufacturer Syntax-Brillian in this column. Here we go, Marco.

Let's look first at the buying; it appears to be bullish. Insiders were selling in May, but at more than double today's per-share price. And recent purchasers include those who were selling at those higher levels in spring -- board member Christopher Liu, for example.

But Syntax-Brillian is far from a perfect business. CAPS investor stockpitcher explained it this way in panning the stock in November: "When your business is a commodity, you're dead unless you innovate."

Bad news for Syntax-Brillian investors here. Research and development expense as a percentage of revenue declined from 2.3% in fiscal 2006 to less than 1% in fiscal 2007. That's not the budget of an innovator.

And it gets worse. Thanks to a history of rapidly rising receivables, Syntax-Brillian has never produced positive free cash flow. Continuing operations have been funded via a mixture of debt and equity.

What's more, receivables are enough of a problem that, when news of a sale of CompUSA hit the wires, Syntax-Brillian felt compelled to comment on its dealings with the retailer. Yeesh.

I'll not go so far as to suggest there's no value in Syntax-Brillian -- insider buying suggests otherwise. But I'd not buy before knowing exactly how management plans to right its receivables record and begin producing positive cash flow. Care to comment, sirs?

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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