Who's Buying Now?

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It's a new week, and that 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 today's top five.

The week's buying

Company	Closing Price 5/15/08	Total Value Purchased	52-Week Change
American Capital Strategies (Nasdaq: ACAS)	$33.10	$655,359	(20.2%)
Bristol-Myers Squibb (NYSE: BMY)	$21.97	$56,897	(24.0%)
Marsh & McLennan (NYSE: MMC)	$29.25	$1,125,960	(2.9%)
Orthofix (Nasdaq: OFIX)	$33.34	$393,095	(28.8%)
Shutterfly (Nasdaq: SFLY)	$13.14	$374,702	(25.6%)

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

This is Bristol-Myers on drugs
Don't let anyone small-f fool you; investing in turnarounds is neither safe nor simple. But it can be hugely profitable -- if the turnaround leads to long-term profits.

That may be what we have at Bristol-Myers Squibb. The recovering pharma, which was bottoming out four years ago, is blazing a comeback trail that has a whiff of sustainability. Here's how Foolish colleague Brian Lawler put it recently:

While Plavix represents Bristol-Myers' most important near-term growth determinant, more recently launched drugs, like cancer treatments Sprycel and Ixempra, will help to determine the company's longer-term financial fortunes. Although these compounds amount to only a fraction of Plavix's sales today, combined revenue from Sprycel and Ixempra climbed 28% sequentially. Regarding its pipeline, Bristol-Myers predicts a "mid-year" FDA New Drug Application filing for its diabetes treatment saxagliptin, a potential competitor to Merck's (NYSE: MRK) Januvia.

Interestingly, our 100,000-strong Motley Fool CAPS community appears to believe these drugs will keep Bristol-Myers healthy and strong:

Metric	Bristol-Myers Squibb
CAPS stars (5 max)	****
Total ratings	680
Bullish ratings	606
Percent Bulls	89.1%
Bearish ratings	74
Percent Bears	10.9%
Bullish pitches	92
Bearish pitches	13

Data current as of May 16.

Others see the company profiting from economic tailwinds. CAPS All-Star xthecritic put it this way in December:

This is a sector play. Drug manufacturers have been and will continue to outperform the market in the next 12-18 months as we deal with economic weakness. I like the sector overall after several years of pressure from products coming off patent and with positive overall demographic trends.

Whatever the reasons, there's no doubting the numbers. Management has dramatically improved its use of shareholder capital recently, after a dramatic dip:

Metrics	TTM	2007	2006	2005
Return on invested capital	15.8%	14.2%	8.6%	12.0%
Return on equity	19.5%	19.2%	13.4%	26.5%

Source: Capital IQ, a division of Standard & Poor's. TTM = trailing 12 months.

And they apparently believe even better days are ahead. CEO James Cornelius added 100,000 shares at slightly higher prices a week ago last Thursday. Board member Michael Grobstein joined the purchase party the next day.

Both buys boost my confidence that Bristol-Myers' above-market 5.6% dividend yield will hold steady or even grow. I'll take it; the stock joins my CAPS portfolio today. (Here's why dividend growth matters.)

Your portfolio needs to be Orthofixed
Continuing in this week's "catch a falling knife" theme, I give you Orthofix, a medical-device maker that's getting the love in CAPS. Here's how investor jdshilling explained the thesis earlier this month:

Orthofix is a solid international player in the orthopedic and medical equipment market. The numbers aren't great on paper, but the forward P/E is at about 15, down from a current mark over 50. Given the aging population and growth in the health care sectors, one can expect to see a significant growth in earnings over the next year or two. [Emphasis added.]

I highlighted that last part because, according to Capital IQ, projections of outsized growth give the stock a potentially cheap 0.64 PEG ratio based on 2009 earnings estimates.

Insiders like their chances. Four of them -- including CEO Alan Milinazzo -- were buying last week. Since last Thursday, three of them have committed nearly $400,000 in personal wealth to the stock.

Trouble is, we've seen this before. Orthofix was featured in this column in November of 2006. Shares of the stock are down more than 21% since. Invest carefully, 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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