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 today.

The week's buying

Company

Closing Price 8/13/08

Total Value Purchased

52-Week Change

General Growth Properties (NYSE: GGP  )

$24.63

($1,059,800)

(49.1%)

Hologic (Nasdaq: HOLX  )

$20.36

$1,744,074

(19.3%)

Kinder Morgan Management (NYSE: KMR  )

$54.58

$569,654

19.8%

Sequenom (Nasdaq: SQNM  )

$21.41

$11,799,589

350.7%

Stratasys (Nasdaq: SSYS  )

$18.59

$165,500

(23.7%)

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

Tangible returns from Hologic?
I imagine the place where company insiders and Motley Fool CAPS investors meet as one of vast green fields where money grows on trees.

I've no evidence that's actually the case, of course; it just seems like a logical outcome. Hence today's top choice: Hologic, a maker of imaging equipment for diagnosing serious diseases such as breast cancer. Company executives are buying and the stock earns a big rating in CAPS.

Let's review the buying first. Three of Hologic's top four executives -- CEO John Cumming, president Robert Cascella, and CFO Glenn Muir -- bought shares last week. Combined, they put more than $1.7 million in personal wealth on the line. That's an outstanding indicator. When it comes to insiders, bargains are often bought in bulk.

And when it comes to CAPS, the best stocks earn five stars. Here's how our 115,000-strong CAPS community sees Hologic:

Metric

Hologic

CAPS stars (5 max)

*****

Total ratings

649

Bullish ratings

633

Percent Bulls

97.5%

Bearish ratings

16

Percent Bears

2.5%

Bullish pitches

95

Bearish pitches

2

Note: data current as of Aug. 13, 2008.

In May, CAPS investor LEGMAKER wrote this pitch for Hologic:

Since 2005, this stock has been off like a rocket. Over that time frame, revenue has increased almost threefold and income is up over fourfold. With that, their costs have only a little more than doubled. These records have been helped with current acquisitions. The purchase of Cytyc placed HOLX as the premier provider of pap tests for cervical cancer. They also acquired an early stage treatment for breast cancer. The last technology is the treatment of uterine bleeding that usually ends in hysterectomy. This acquisition makes them more of a one stop shop. As OBGYN offices need use particular tests and services, they know they can go to HOLX for all of their needs. They operate in over 20 countries and distribute to over 150 countries and it makes them one of the largest providers of women's health products in the world.

And the diagnostics business as a whole is still booming. Johnson & Johnson (NYSE: JNJ  ) reported in July that sales of medical devices and diagnostic equipment rose 12.1% to more than $6 billion. Hologic, meanwhile, has doubled revenue over the trailing 12 months. Sales growth has mostly accelerated since 2003. Gross margin has widened dramatically over the same period, resulting in a multibagger.

But are shares of Hologic still cheap enough to buy? Capital IQ shows the company's average multiple to normalized earnings for 2008 -- 30.8 -- to be at its lowest point in a decade, not what you'd expect for a fast mover whose business is improving. Hologic joins my CAPS portfolio today.

Stumped by Stratasys
I'll admit, some of the stocks we recommend at Motley Fool Rule Breakers have a Star Trek feel to them. Stratasys, which specializes in the act of printing plastic objects as you might print this article, is like that.

As Fool co-founder David Gardner told subscribers in his March recommendation, "3-D printing has been around in some form for decades, but better quality and lower prices have taken it from prototyping rough models to actually making components for end use. If you're designing a critical part, you don't want to go into mass production without an accurate prototype in hand -- something you can test, tweak, and improve through several iterations."

Logical, David. Flawlessly logical -- except for one thing: Mr. Market is too busy selling the future to buy stocks like this. Shares of Stratasys, which recently announced surging demand for its new digital direct manufacturing systems, are down 15% from our buy price.

But like the insiders at fellow Rule Breakers recommendation Sigma Designs (Nasdaq: SIGM  ) , Stratasys CEO Scott Crump sees the weakness as a buying opportunity. He and his spouse have purchased 40,000 shares since the beginning of August.

There's your update. See you back here next week when we dig through more insider filings in search of the next home run stock.

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

Stratasys and Sigma Designs are Rule Breakers recommendations. Sigma is also a Motley Fool Hidden Gems Pay Dirt pick. Johnson & Johnson is an Income Investor recommendation. Try any of these market-beating services free for 30 days. There's no obligation to subscribe.

Fool.com contributor Tim Beyers, who is ranked 18,617 out of more than 115,000 participants in CAPS, also writes for Rule Breakers. Tim didn't own shares in any of the companies mentioned in this article at the time of publication. The Motley Fool has a disclosure policy.


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