It's time again this week to check the most interesting recent insider purchases. After reading through numerous filings using insider tracking tool Form 4 Oracle, here are my top five today.
The week's buying
Company |
Closing Price 7/23/08 |
Total Value Purchased |
1-Year Return |
---|---|---|---|
Flagstar Bancorp |
$4.46 |
$188,012 |
(61.3%) |
Marriott International |
$28.55 |
$472,590 |
(35.8%) |
US Bancorp |
$30.60 |
$2,697,200 |
1.6% |
ValueClick |
$10.74 |
$1,111,585 |
(64%) |
Wachovia |
$17.65 |
$16,085,100 |
(61.5%) |
Sources: Fool.com, Yahoo! Finance, Form 4 Oracle, SEC filings
Whither Wachovia? (Again.)
I just don't trust Wachovia. Many times, the bank has been spotlighted in this column and, in each case, insider buying has meant less than nothing.
Rewind to last November. Executives had committed nearly $25 million in personal wealth over the prior week. Shares of the bank are down more than 50% since.
That's saying something. Wachovia surged 27% after reporting a worse-than-expected Q2 loss and slashing its dividend by 87%, joining other notables such as Washington Mutual
And I'm not the only one. Morgan Housel, a close follower of all things banking here at the Fool, wrote to me earlier today: "I really don't know what to make of it ... I'm about as bearish on Wachovia as any other bank right now. They have all the problems as everyone else plus they have all the trouble related to the Golden West purchase."
Morgan is hardly alone in his bearish view. A large percentage of those who've rated Wachovia in our 110,000-strong Motley Fool CAPS community call it an underperformer:
Metric |
|
---|---|
CAPS stars (5 max) |
* |
Total ratings |
2,042 |
Bullish ratings |
1,328 |
Percent Bulls |
65% |
Bearish ratings |
714 |
Percent Bears |
35% |
Bullish pitches |
251 |
Bearish pitches |
88 |
Data current as of July 24, 2008.
So what's behind Steel's bullishness? We don't know. We don't even know whether he is bullish. From Wachovia's last proxy statement:
To reinforce the long-term perspective of stock-based compensation and emphasize the relationship between stockholders and senior management, Wachovia's board implemented stock-ownership and share-retention guidelines for senior management and directors in 2002. This policy requires our executive officers to own shares of common stock having a value equal to five times base salary in the case of our CEO and Chairman. [Emphasis added.]
Steel's annual salary is $1.1 million, which means he's required to hold at least $5.5 million worth of stock. This week's purchase more than satisfies that requirement.
Still, given history and this week's rotten report, I can't join Steel in buying. There's still too much we don't know.
The value in ValueClick
Ever since Microsoft
What we have instead is a lower outlook. ValueClick recently lowered its full-year earnings guidance from $0.81 to $0.83 a share to $0.69 to $0.71 a share. Weak consumer spending is to blame, the Associated Press reports.
Yet insiders appear focused on the long term -- or, perhaps, the possibility of a buyout. Either way, they're buying: Four separate board members put better than $1 million in wealth on the line. Director James Zarley tripled his position with 100,000 shares at $10.24 apiece. Now that's commitment.
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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