Who's Buying Now?

It's Tuesday, and that means it's time to check the most interesting insider purchases from the past week. After checking through numerous filings using insider tracking tool Form 4 Oracle, here are my top five from the past seven days:

Company

Closing price 10/17/05

52-week change

3Com (Nasdaq: COMS  )

$3.74

-11%

Lodgian (AMEX: LGN  )

$9.99

2%

Titanium Metals (NYSE: TIE  )

$42.82

274%

VistaCare (Nasdaq: VSTA  )

$13.75

2%

WebMD (Nasdaq: WBMD  )

$27.90

20%*

Sources: Fool.com, Yahoo! Finance

* WebMD began trading on Oct. 4, 2005.

A stock of steel
We begin this week with Titanium Metals, which makes titanium products for the aerospace and industrial markets and is based close to me, in Denver. The stock has shot up like a bottle rocket this year, especially over the past three months.

There's a good reason, of course. In the second quarter, sales rose more than 48% and earnings per diluted share increased more than sevenfold after excluding one-time items. Two days after it reported those results, or Aug. 3, the company announced a five-year deal with Boeing to supply titanium for its commercial aircraft. And less than a week after that, TIMET, as the company is sometimes known, unveiled a 2-for-1 stock split. Suddenly and remarkably, Titanium Metals had caught the big mo, and there was no looking back.

Fast-forward to last week. On Tuesday, the company updated the midpoint of its 2005 guidance for operating income by $30 million, a 23% increase. What's more, Titanium Metals reported that its order backlog had spiked 22% since June and 78% since last year. Interestingly, though, two business days before the big news -- on Oct. 7 -- Dallas billionaire Harold Simmons purchased 7,300 more shares of the company, completing a recent buying spree that cost more than $9 million.

You could just chalk up the deal to fortunate timing. But I wouldn't. Simmons is No. 306 on Forbes' list of the world's 400 richest people, with a net worth estimated at $2.1 billion. He got there through a series of savvy investments, not the least of which was another firm with -- wait for it -- huge titanium interests. Which one, you ask? Dallas-based Valhi (NYSE: VHI  ) .

Another left in Katrina's wake?
Next up is Lodgian, which owns and operates hotels in the U.S. and Canada. In September, the company announced that Hurricane Katrina damaged two of its New Orleans properties: the Radisson New Orleans Airport in Kenner, La., and the Quality Hotel in Metairie, La. Total damage at the two properties is estimated to exceed $5 million. Insurance deductibles could create $1.2 million in out-of-pocket expenses.

Yet even that discounted sum could prove significant. Lodgian has only $18 million in cash on hand and more than $400 million in debt on the books. But that hasn't stopped Alex Lieblong, a Little Rock, Ark., investor and horse owner whose hedge fund, the Key Colony Fund, ranked ninth in performance last year with a total return of 52%, according to Barron's.

He began buying shares in Lodgian last year and has been accumulating them continuously since at least June, according to this filing with the Securities and Exchange Commission. Key Colony is now a 10% owner of the company. Katrina or no, it seems Lieblong's investment thesis hasn't changed.

To catch a falling router
We'll close with one of the worst stocks of the past three years: 3Com. Some executives seem to believe the stock has hit rock bottom. For example, Chief Financial Officer Donald Halsted last Thursday boosted his stake in the company by purchasing 5,000 more shares at $3.60 per stub.

It's impossible to know exactly what Halsted's investment thesis is, but I'll bet it has something to do with the balance sheet. The company trades for fewer than two times tangible book value. And more than half of its market value is in cash and short-term investments. (3Com still carries no debt.) Does that make the stock cheap? Only if the company finds a way to end its perpetual string of losses. With tough competition from Juniper and Cisco (Nasdaq: CSCO  ) , among others, I've my doubts that will be possible.

That's all for this week. See you back here next Tuesday, when we dig through more insider deals in search of the next home run stock.

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Fool contributor Tim Beyers usually favors two scoops of ice cream over the inside scoop. Tim didn't own shares in any of the companies mentioned in this story at the time of publication. You can find out what is in his portfolio by checking Tim's Fool profile, which is here. The Motley Fool has an ironclad disclosure policy.


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