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 now:

The week's buying

Company

Closing Price 3/14/07

Total Value of Stock Purchased

52-Week Change

Credit Acceptance (Nasdaq: CACC  )

$26.69

$1,049,120

13%

Dean Foods (NYSE: DF  )

$45.67

$1,813,468

22%

SBA Communications (Nasdaq: SBAC  )

$27.13

$619,100

24%

Thornburg Mortgage (NYSE: TMA  )

$24.52

$5,228,058

(8%)

Time Warner Cable (NYSE: TWC  )

$36.50

$479,289

(10%*)

Sources: Fool.com, Yahoo! Finance, Form 4 Oracle, SEC filings
*Time Warner Cable began trading on Jan. 10.

Slimed by subprime lenders
How awful has it been for subprime lenders? Let's put it this way: When Impac Mortgage Holdings (NYSE: IMH  ) feels the need to hyperventilate on paper, you know it's bad.

But it's actually even worse than that. Standard & Poor's recently executed New Century by downgrading its debt rating. It's hard to imagine finding a bargain in any stock that uses the word "mortgage" in its name.

Yet that may be what we have with Thornburg Mortgage, which services adjustable loans that tend to be in excess of $800,000. Like its distant cousins from the subprime world -- including Novastar Financial (NYSE: NFI  ) and Fremont General -- Thornburg saw its shares get pummeled on Monday and Tuesday.

They've since recovered, but subprime scariness appears to have spooked the stock pickers following Thornburg in our Motley Fool CAPS investor-intelligence database:

Metric

TMA

CAPS stars (out of five)

*

Total ratings

163

Bullish ratings

117

Bull ratio

71.8%

Bearish ratings

46

Bear ratio

28.2%

Bullish pitches

33

Bearish pitches

10

Data current as of March 15.

For its part, management disagrees. Three different insiders, including CEO Garrett Thornburg, have purchased stock since last Monday. Notably, Thornburg's purchase of 210,000 stubs upped his direct holdings by more than 21%.

Perhaps that's because little, if anything, has changed since the firm reported strong earnings and better-than-expected guidance in January. Or maybe it's that Thornburg's meaty dividend -- currently yielding 11.6% -- has been paid continuously since 1993. Or maybe it's because, trading for 9.9 times earnings, this stock is still one of the cheapest in the mortgage investment business.

Or maybe it's all three. Whatever the reason, insiders are buying, and I'm willing to join them. I added shares of Thornburg to my CAPS portfolio at yesterday's close.

Time for Time Warner?
Time Warner Cable is equally tempting, thanks to an overwhelming endorsement of the stock in CAPS.

And I do mean endorsement. Of the 16 stock pickers who have rated the shares in CAPS, 15 believe it will outperform. Of those, seven are All-Stars, or investors whose picks have outperformed at least 80% of the community. All seven are bullish.

What do they see? Few offered pitches, but those who did say that Time Warner Cable is a better bet because it's cheaper. That's not entirely true; Time Warner and Comcast sell for similar multiples to 2007 earnings.

But Time Warner may be free of some of the problems facing its rivals. For example, if the FCC approves a move to prevent any single cable operator from gobbling up 30% or more of the market, Comcast, already at 27%, would have little room to grow. Time Warner, on the other hand, has just 13.5 million subscribers, or roughly half of Comcast's total.

That's a lot of runway. And management, for its part, seems intrigued by the possibilities. Two board members spent more than $480,000 on new shares last week to bolster their positions.

I'll not yet join them; Time Warner Cable is still too new as a public entity. Better for me to watch and wait, I think, which I'll do by adding this stock to my CAPS watch list.

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.

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

Get all the inside information you need in our collection of investing newsletters. From wallflowerish small caps to swashbuckling Rule Breakers, we've got something for every investor. Get in on the action today; all of our newsletters offer a 30-day risk-free trial. All you have to lose is the prospect of better returns.

Fool contributor Tim Beyers, who is ranked 1,449 out of more than 24,300 in CAPS, usually favors two scoops of ice cream over the inside scoop. Tim didn't own stock in any of the companies mentioned in this story at the time of publication. All of his portfolio holdings can be found at Tim's Fool profile. His thoughts on insider buying, Foolishness, and investing in general may be found in his blog. The Motley Fool's disclosure policy is a strong buy.


Read/Post Comments (0) | Recommend This Article (44)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

DocumentId: 523962, ~/Articles/ArticleHandler.aspx, 7/24/2014 6:50:03 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement