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 this week.

The week's buying

Company

Closing Price 6/28/07

Total Value Purchased

52-Week Change

Cost Plus
(NASDAQ:CPWM)

$8.94

$89,880

(34%)

EarthLink
(NASDAQ:ELNK)

$7.56

$725,000

5%

General Growth Properties
(NYSE:GGP)

$53.00

$1,087,593

16%

NorthStar Realty
(NYSE:NRF)

$12.23

$64,754

1%

Primus Guaranty
(NYSE:PRS)

$11.03

$277,502

(7%)

Sources: Fool.com, Yahoo! Finance, Form 4 Oracle, SEC filings

Is the price right for Cost Plus?
Ask any of my Foolish colleagues and they'll tell you: I loathe turnaround stories.

So do most of the professional and amateur stock pickers in our Motley Fool CAPS investor intelligence database. Look at how they rate ailing retailer Cost Plus:

Metric

Cost Plus

CAPS stars (5 max)

*

Total ratings

62

Bullish ratings

29

Bull ratio

46.8%

Bearish ratings

33

Bear ratio

53.2%

Bullish pitches

9

Bearish pitches

4

Note: Data current as of June 27, 2007

But that's the group. Some see a turnaround in the works, including Morgan Keegan, a CAPS All-Star that, today, upgraded its rating for Cost Plus. Why? Valuation. Cost Plus trades for just 68% of its tangible net worth.

Insiders are equally optimistic. Three of them have spent more than $89,000 on stock since last Tuesday. Board member Fredric Roberts, a retired investment banker who has been a director since 1999, led the buying when he acquired 5,000 shares on Friday.

Color me intrigued, but is there any actual evidence of a turnaround taking place? CAPS investor teasdale100 seems to think so, citing improved inventory management. He may be right. According to Capital IQ, Cost Plus turned over its inventory 2.9 times last year, up from 2.6 the year prior and the best performance investors have seen since 2003.

That, in turn, may have impressed creditors. On Monday, a group of financiers led by Bank of America (NYSE: BAC  ) agreed to provide Cost Plus with a $200 million credit facility secured by inventory and receivables.

Or, in simpler terms: Cost Plus may not be out of the woods, but at least someone is willing to lend the retailer a compass.

EarthLink to Rolla
Fools haven't been too kind when it comes to Internet service providers, either. EarthLink especially. Here's why.

Mix in the tragic death of former CEO Garry Betty in January and a still-bleeding subscriber base, and, frankly, there just isn't much to like about this one-star stock.

But don't tell that to new CEO Rolla Huff. On Monday, he spent $725,000 of his own cash to build a stake in his employer. His reasoning? He didn't give one to my Foolish colleague, Anders Bylund, saying only that he doesn't "put down three quarters of a million dollars trivially."

Huff's swagger makes me curious, but with less than 3% of EarthLink still in the hands of insiders, they've nowhere near enough ownership interest to make me a buyer.

Actually, it's worse than that. Save for Huff, insiders are cashing in. Donald Berryman, the company's executive vice president of municipal networks, is only the latest. He sold his entire direct stake a month before Huff bought his shares.

For me, All-Star CAPS investor cobradon best sums up EarthLink. Quoting: "Falling margins, falling market share, increasing debt. There's not much to like." I'll say.

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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Bank of America is an Income Investor recommendation. Fool contributor Tim Beyers, who is ranked 2,228 out of more than 31,000 rated investors 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. Tim's portfolio holdings can be found at his Fool profile. His thoughts on insider buying, Foolishness, and investing in general may be found in his blog. The Motley Fool's disclosure policy only stays inside when it has to.


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