Who's Buying Now?

It's a new week, which means it's time to check on 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

There's innovative, and then there's Innovative
I'm not normally the type to buy into companies whose revenue is falling rapidly. Nevertheless, Innovative Solutions & Support, which recently reported a 44% drop in fourth-quarter sales and a breathtaking 73% decline in full-year revenue, intrigues me.

You can blame the investors at Motley Fool CAPS for that. On the whole, they're bullish:

But that's not what strikes me most. More interesting is the loyal coverage of this stock on our discussion boards, which has since translated into some interesting pitches at CAPS. Take this one, from all-star TMFBreakerTAllan, who, as the name might suggest, is one of our top participants in the Motley Fool Rule Breakers community:

"This company is entering new markets in retrofitting aircraft data systems and extending [the] life of small aircraft. They are also poised to capitalize on future FAA requirement changes and have [a] proven track record within [this] industry [and] in [a] niche market."

In another words: our Fool suggests that Innovative Solutions could be a Rule Breaker. But is he right? It sure seems so at first glance. Once focused on providing digital gauges for tracking in-flight data, today Innovative is producing full-scale flat-panel displays that provide everything a pilot needs to fly an aircraft.

That's appealing for at least two reasons. First, older aircraft are rarely retired because replacing them costs millions. Second, the Federal Aviation Administration (FAA) is extremely demanding in certifying aircraft for flight. Retrofitting offers a relatively cheap way to satisfy the FAA while keeping instrumentation state-of-the-art.

Maybe that's why the State Teachers Retirement System (STRS) of Ohio has purchased more than $7 million in shares over the past 52 weeks, more than $700,000 of which was purchased last week?

Normally I wouldn't ask; institutional buying doesn't much thrill me. The difference here is that STRS is buying when none of the insiders are selling. Form 4 Oracle says that CEO Geoffrey S.M. Hedrick last sold shares in September of 2004 and has since held. Today, Capital IQ reports that he owns 23.8% of the company.

Why so much faith? How about that IS&S has succeeded in pitching its flat panels, even with their $170,000-plus price tag? Orders jumped 130% from 2005 to 2006. And as of today, the backlog stands at $18.3 million. That's impressive, and it's enough to get me to recommend to David Gardner that we include IS&S in the Rule Breakers Universe -- our watch list of prospective stock market rebels.

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

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Fool contributor Tim Beyers, ranked 1,371 out of more than 19,600 participants in Motley Fool CAPS, 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. Motley Fool's disclosure policy is a strong buy.