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

Company

Closing Price 9/11/08

Total Value Purchased

52-Week Price Change

Continental Resources (NYSE: CLR  )

$36.28

$3,658,300

135.7%

Dell (Nasdaq: DELL  )

$19.18

$99,958,848

(28.8%)

Hercules Offshore (Nasdaq: HERO  )

$16.72

$148,007

(35.9%)

Interactive Intelligence (Nasdaq: ININ  )

$10.09

$385,015

(47.6%)

Rockwood Holdings (NYSE: ROC  )

$33.08

$504,900

6.8%

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

An intelligent play for your portfolio
It's tough to love the bear. He bites, claws, and chews on your portfolio until it bleeds red, as my personal portfolio has. (Down 12% year to date as of this writing.) But here's why you should embrace the big, hairy lug: Bear markets create bargains.

Consider contact center software provider and Motley Fool Rule Breakers recommendation Interactive Intelligence. The numbers are striking:

Metric

Interactive Intelligence

Trailing-12-month revenue growth

21.9%

Projected 5-year earnings growth

28.3%

PEG ratio

0.62

Gross margin

67.6%

Sources: Capital IQ, Yahoo! Finance.

And I'm not the only one who thinks so. Our 115,000-strong Motley Fool CAPS community also likes what it sees:

Metric

Interactive Intelligence

CAPS stars (5 max)

*****

Total ratings

386

Bullish ratings

370

Percent Bulls

95.9%

Bearish ratings

16

Percent Bears

4.1%

Bullish pitches

55

Bearish pitches

1

Data current as of Sept. 12, 2008.

What's more, stock pickers that I respect are bullish on the company. Thomas Allen of the five-star ING FMR Diversified Mid-Cap (IFDSX) fund had added 122,000 shares of Interactive Intelligence through June 30, Morningstar reports.

CAPS investor 21popsontop explained the optimism in May by pointing to Interactive's niche. It helps small- to mid-sized firms more efficiently deploy capital:

First quarter 2008 bear roaring, but he don't care cause he's wanting to eat that bear. Revenues were a record 29.5 million, up 21% from same quarter last year, driven by the need of this quiet company's help and solutions in these uncertain times. 39% increase in orders from same period last year and continued to close large transactions during this quarter, with 15 contracts exeeding 250,000 and 9 of those representing new customers, with several upcoming new products squarely focused (to further on helping organizations further reduce costs and improve customer service.

Executives would likely agree; they've been buying in spurts since February. CEO Donald Brown, already a 10% owner of the company and a serial entrepreneur, added 40,000 shares to his stake exactly one week ago.

That's a good sign. Selling contact center gear can be tricky. Interactive Intelligence has an edge because of its platform. Software replaces hardware, making it easier to scale customer needs while also saving money.

To me, Interactive Intelligence is a trifecta: a well-defined, disruptive idea combined with a low price and highly engaged insiders. The stock joins my CAPS portfolio today.

Mr. Market needs a hero
Should you be investing in energy? Foolish colleague Joe Magyer thinks so. So do a large number of CAPS investors. They give high ratings to drillers such as Transocean (NYSE: RIG  ) and Noble Corp. (NYSE: NE  ) .

They also like Hercules Offshore, a Motley Fool Hidden Gems pick that's been adrift since July. Should you be taking advantage of the lower prices? Executives are. Don Rodney, president of the company's international operations, was buying last week and Terrell Carr, vice president of worldwide operations, joined him on Monday.

The trouble with this HERO is that, on a price-to-earnings basis, it's more expensive than the industry average. And while Noble technically has a higher P/E -- 17.9 versus 15.4, according to Yahoo! Finance -- it earns the premium via higher expected growth.

The good news? Some excellent fund managers were buying shares of Hercules as of June. Motley Fool Champion Funds pick Brandywine (BRWIX), for example. Still, with a less-than-spectacular scorecard in recent quarters, I'd wait to see who else on the management team buys before adding to or opening a position in this stock.

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.

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

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Fool contributor Tim Beyers, who is ranked 21,121 out of more than 115,000 participants in CAPS, also writes for Rule Breakers, which counts Interactive Intelligence among its holdings. Get access to all of Tim's Foolish writings here.

Tim didn't own shares in any of the companies mentioned in this article at the time of publication. Dell is an Inside Value pick. Hercules Offshore is a Hidden Gems recommendation. Brandywine is a Champion Funds selection. The Motley Fool has a disclosure policy.


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