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 from the past seven days:
The week's buying
|
Company |
Closing price 9/12/06 |
Total value of stock purchased |
52-week change |
|---|---|---|---|
|
Human Genome Sciences |
$11.45 |
$334,200 |
(11%) |
|
Martek Biosciences |
$21.48 |
$188,563 |
(50%) |
|
MasterCard |
$62.10 |
$199,080 |
35%* |
|
Pinnacle Entertainment |
$27.51 |
$759,679 |
42% |
|
U-Store-It Trust |
$20.50 |
$3,900,929 |
(2%) |
* MasterCard went public in June 2006.
When an earnings miss might be good
I've long been fascinated by the Street's brutal reactions to missed earnings. Our fragile egos don't like to be disappointed. Yet over the long term, the panicky sell-off created by an earnings miss usually offers the exact buying opportunity a superior investor should crave.
Consider Martek Biosciences, which produces nutritional supplements most commonly found in infant formula and foods. Last week, the stock was hammered when guidance came in lighter than expected. But as fellow Fool Brian Lawler explained, Martek is growing fast, even with the reduced expectations. How, then, is a 25% haircut in the stock price justified?
It may not be -- at least in its insiders' opinion. On Monday, CEO Steve Dubin padded his direct holdings by more than 40%. Meanwhile, board member Robert Flanagan doubled his position in the stock. Such faith is reassuring, especially when the market is casting deep doubt on the firm's long-term prospects.
Should U store it?
I'm not at my best when evaluating real estate investment trusts, so why should I take any time to talk about U-Store-It? Thankfully, I can rely on the research of Foolish friend and REIT expert Nate Parmelee here. Better yet, insiders are spending millions on the shares of this self-storage operator.
CEO Dean Jernigan tops the list. Last Wednesday and Thursday, he purchased 195,000 shares for more than $3.8 million. That's doubly impressive when you consider that he held just 39,500 direct shares before his buying spree.
Jernigan wasn't alone; board member William Diefenderfer III added 1,200 stubs on Friday, one of a handful of purchases he's made since last summer. That's significant because, according to research, insider buying means little unless it's consistent and involves multiple members of the executive team, which is what we have here.
Finally, I can't help but be impressed by management's desire to cut costs and improve disclosure. Couple that with U-Store-It's 5.7% dividend yield, and I'm convinced that this stock could be a long-term market-beater.
That's all for this week. See you back here next Wednesday, 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. Get the skinny on all of the stocks in his portfolio by checking Tim's Fool profile . XM Satellite Radio is a Motley Fool Rule Breakers selection, while MasterCard is a Motley Fool Inside Value pick. The Motley Fool's disclosure policy is a strong buy.
