Who's Buying Now?

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

The week's buying

Company

Closing price 12/5/05

Total value of stock
purchased

52-week change

iPass
(Nasdaq: IPAS  )

$6.70

$1,140,260

-2%

Opsware
(Nasdaq: OPSW  )

$6.33

$2,187,050

-11%

Overstock.com (Nasdaq: OSTK  )

$40.06

$2,249,993

-44%

Restoration Hardware
(Nasdaq: RSTO  )

$6.60

$950,438

25%

Trump Entertainment (Nasdaq: TRMP  )

$19.00

$2,230,440

40%*

Sources: Fool.com, Yahoo! Finance, Form 4 Oracle.
*Shares began trading in June.

Shamrock makes a pass . an iPass
A close friend of mine many years ago worked for a California company called Shamrock. I never really thought much of it at the time, except that I thought it was really cool that my friend helped shuttle Disney (NYSE: DIS  ) heir Roy E. Disney to and fro. If only I had paid attention to what her employer actually did. Why, you ask? Because Shamrock is an investment company.

Indeed, Shamrock has several private equity funds that also make stock investments from time to time. One, the Shamrock Activist Value Fund, caught my eye this week after it purchased a large block of shares in mobile connectivity firm iPass. So I decided to look deeper. And what I found was intriguing. First, Shamrock's approach is somewhat signified by its name. The company seeks to buy up big stakes in cheaply valued companies and then use its influence to argue for improvements that should lead to better returns and more responsible corporate governance. It's a noble ideal, and it's one that was widely espoused by pioneering investor Benjamin Graham in his own writings.

It's also hardly surprising. Mr. Disney, you see, has long been an activist shareholder. For exmaple, six years after founding Shamrock, in 1984, he led a successful crusade to install Michael Eisner as CEO of Disney. All was well till 2003, when Mr. Disney resigned from the board of the company his father founded with uncle Walt to begin an assault on Eisner's reign. The attacks resulted first in a vote of no confidence in Eisner's role as a member of the board of directors, and then to Eisner's departure from the company just a few months ago.

Now it seems that Mr. Disney's team, with its 10%-plus stake in Shamrock, is set to go to work on iPass. I can see the appeal. More than one-third of the company's market value is cash in the bank. And it generated more free cash flow than earnings over the trailing 12 months, according to Yahoo! Finance. Both attributes suggest a company with more than enough resources to endure the kind of extreme makeover that accompanies the arrival of a big investor like Shamrock. And considering iPass' not-so-stellar history in the public markets, that's probably a good thing.

Stocking up on Overstock
Patrick Byrne is at it again. Last week, the rabble-rousing CEO of Motley Fool Rule Breakers pick Overstock.com put more of his personal fortune on the line when he bought up almost 60,000 shares of his company. There's just one problem: Byrne appears to own a lot less of Overstock now then he did just 10 months ago. Yet not all is what it seems

I can explain to you, but first you'll have to look at this filing from February. Now look here at the latest filing. See the difference? With no footnotes to go from, it appears as though Byrne has shed more than 4.7 million shares of stock since the beginning of 2005. But there's no mention of any sales of stock by Byrne in Overstock's filings with the Securities and Exchange Commission. What gives? Before you go blaming it on the naked shorts, it's important to remember that not all SEC filings are created equal. And that's what caused the problem here. Byrne, you see, owns Overstock shares both personally and through entities he controls. The February filing, according to an Overstock spokesperson, was comprehensive in that it included all of Byrne's holdings. The latest filing, however, includes only his personal stake.

Overstock also confirmed that Byrne hasn't sold any shares, which means that his stake through other entities equals at least 4.7 million stubs. We'll apparently get all the specifics in a new 13-D filing on Wednesday. (Bookmark this page if you want to be among the first to see it.) And, of course, if there's anything of interest to report, I'll comment on it in next week's column.

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 contributorTim Beyersusually 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 Foolprofile. The Motley Fool has an ironcladdisclosure policy.


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