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 today.

The week's buying


Closing Price, March 7

Total Value Purchased

52-Week Change

Cabela's (NYSE:CAB)




Builders FirstSource (NASDAQ:BLDR)




MF Global (NYSE:MF)








Psychiatric Solutions (NASDAQ:PSYS)




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

A stock to build on?
Bargains are created when markets collapse. But bargain stocks are rarely obvious. More often, they're frightening.

Witness Builders FirstSource. The housing bust has pummeled this Inside Value recommendation, which, as its name implies, supplies lumber and structural products to builders such as Centex (NYSE: CTX  ) and Ryland Group (NYSE: RYL  ) . Revenue was down nearly 29% last year. Gross margin also declined.

Most of those rating the stock in our 85,000-strong Motley Fool CAPS community don't see a turnaround in process:


Builders FirstSource

CAPS stars (out of 5)


Total ratings


Bullish ratings


Percent Bulls


Bearish ratings


Percent Bears


Bullish pitches


Bearish pitches


Data current as of March 7.

They may be right. Housing starts are way down and, as Foolish colleague Richard Gibbons points out here, there's a chance that two in five homeowners will soon be upside-down on their mortgages.

Can you imagine investing in a lumber supplier when a growing portion of the population is already walking out on perfectly good homes they can't afford? Me neither.

But the housing bust will end someday. Executives at Builders FirstSource recognize this and, as a result, have put in place a cost-cutting plan that preserves cash flow for debt reduction, small acquisitions, and share repurchases.

It's working so far. Over the past year -- one of the worst in recent memory in terms of sales and earnings -- Builders FirstSource has:

  • Produced more than $61 million in free cash flow.
  • Cut its debt load by 12.5%.

Yes, I know, those aren't otherworldly numbers. But I'm impressed that, in an awful year, management still found a way to create value.

Can they continue to? A handful of insiders believe so, yes. Three directors who represent the interests of Warburg Pincus -- one of the largest institutional holders of Builders FirstSource stock -- have spent more than $2.9 million over the past week to increase their firm's stake. Not a small gamble.

But perhaps one worth making. Builders FirstSource joins my CAPS watch list today.

Go Global
Derivatives specialist MF Global has had a lousy two weeks. To review, a rogue trader incurred $141 million in losses when internal safeguards failed.

A week ago, insiders piled into the stock, committing more than $3 million in fresh capital. But if the Feb. 29 buying was a mad rush -- a day-after-Thanksgiving-style 24-hour clearance sale -- it didn't end when the weekend began.

On the following Monday, after shares of MF Global had regained some 12% in value, board member Eileen Fusco spent more than $48,000 to add to her position in the stock.

Her faith, and that of her colleagues, could be rewarded at the end of the month when MF Global reports earnings. Why? Executives issued a press statement earlier last Friday in which they said fourth-quarter revenue would "remain at higher levels than in any comparable period during the current fiscal year."

Translation: Yeah, one of our guys blew it, but we're still growing.

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

Get the inside scoop on stocks of all sizes with related Foolishness:

Read/Post Comments (0) | Recommend This Article (9)

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.

Compare Brokers

Fool Disclosure

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: 594780, ~/Articles/ArticleHandler.aspx, 10/25/2016 6:42:35 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...

Today's Market

updated 9 hours ago Sponsored by:
DOW 18,223.03 77.32 0.43%
S&P 500 2,151.33 10.17 0.47%
NASD 5,309.83 52.43 1.00%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/24/2016 4:00 PM
BLDR $10.40 Up +0.02 +0.19%
Builders FirstSour… CAPS Rating: **
CAB $62.52 Up +0.15 +0.24%
Cabela's CAPS Rating: ****
CTX $11.95 Down +0.00 +0.00%
Centex Corp CAPS Rating: *
MFGLQ.DL $0.03 Down +0.00 +0.00%
MF Global CAPS Rating: *****
NIHDQ $0.00 Down +0.00 +0.00%
NII Holdings, Inc. CAPS Rating: **
PSYS.DL $0.00 Down +0.00 +0.00%
Psychiatric Soluti… CAPS Rating: **
RYL.DL $0.00 Down +0.00 +0.00%
The Ryland Group CAPS Rating: **