Stocks the Rich Executives Are Buying

Put five Fools in a room, ask them how they invest, and you'll likely get five different answers. Some like growth, others value, or small caps, or dividends, or, well -- you get the picture.

Yet, while our styles differ, we all want excellent, engaged managers running the companies we own. We like it even more when these managers are also owners -- investors like you and me who, in trying times like these, are willing to buy as others sell. That's why I write this column weekly.

The week's buying
So which rich executives are buying now? Have a look, courtesy of our friends at Form 4 Oracle:

Company

Closing Price 12/24/08

Total Value Purchased

52-Week Change

GeoEye (Nasdaq: GEOY  )

$17.20

$222,612

(51.3%)

Hornbeck Offshore Services (NYSE: HOS  )

$14.31

$697,662

(68.7%)

Oxford Industries (NYSE: OXM  )

$7.77

$372,487

(70.8%)

Constellation Energy (NYSE: CEG  )

$24.92

$509,015

(74.6%)

Hercules Offshore (Nasdaq: HERO  )

$4.45

$25,000

(81.8%)

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

Keep your eye on this rebel
When it comes to stocks, two words make me shudder: capital-intensive and government-funded. That's how we might best describe GeoEye, an Earth mapper that depends on celestial success and is a recommendation from my Rule Breakers teammate, Karl Thiel.

Yet when it comes to liking GeoEye's prospects, I just can't help myself. GeoEye is one of many rebel fliers whose executives have been buying. Insiders at content delivery specialist Akamai (Nasdaq: AKAM  ) bought last week and the week before. CEO George Scangos and two others at would-be biotech baron Exelixis (Nasdaq: EXEL  ) padded their portfolios in November.

Not that GeoEye needs insider buying to offer Fools a compelling investment thesis. "Whether you're updating maps, reporting on traffic, locating oil reserves, tracking weather systems, aiding disaster relief, or just looking for the nearest ATM, geographic data is big business," Karl wrote in the February issue of Rule Breakers.

How big? GeoEye produced $183.8 million in revenue for 2007 and $150.9 million over the trailing 12 months. But now, with the successful launch of its GeoEye-1 satellite, the company could monetize up to 255 million square kilometers in new imagery each year, selling principally to government agencies such as the U.S. Geological Survey. Helllooooo, growth. Nice to see you again.

Those who have rated GeoEye in our Motley Fool CAPS community of 125,000 investors are mostly bullish, even if the company has lost some star power since November -- from a five- to a four-star rating:

Metric

GeoEye

CAPS stars (5 max)

****

Total ratings

388

Bullish ratings

374

Percent Bulls

96.4%

Bearish ratings

14

Percent Bears

3.6%

Bullish pitches

80

Bearish pitches

0

Note: Data current as of Dec. 26, 2008.

Interestingly, about 21% of those who've rated GeoEye have also pitched it. Yet every one of those pitches is bullish. CAPS All-Star PeakStocks was a believer in August, shortly before GeoEye-1 was off the launching pad.

"Although risky, I believe that GeoEye represents an amazing risk/reward scenario, especially in light of the fact that the success rate for launches of the type that GeoEye will use for GeoEye-1's launch is over 98.5%. Once that bird flies, GeoEye's earnings and revenue will rocket and the stock will never look back," our Fool wrote at the time. Karl would agree. So would I.

And so would GeoEye's executives. Three insiders were buying shares last week, including Chief Executive Matthew O'Connell. Records show this is the second time he has bought on a dip. (The last came in May.) He'll profit right alongside common investors if (when?) the stock recovers.

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.

Read about stocks of all sizes with related Foolishness:

Fool contributor Tim Beyers is slowly improving his CAPS score. Thankfully, he's doing better as an analyst for Rule Breakers, which counts Akamai, Exelixis, and GeoEye among its list of recommendations. The Fool also owns shares of Exelixis. Hercules Offshore is a Motley Fool Hidden Gems pick.

Tim owned shares of Akamai at the time of publication. Check out his portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. This article was composed on Tim's kids' Mac -- please pardon the My Little Pony wallpaper. The Motley Fool is also on Twitter as @TheMotleyFool. Its disclosure policy knew a rich executive once. She never bought anything.


Read/Post Comments (1) | Recommend This Article (15)

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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.

  • Report this Comment On December 29, 2008, at 9:49 AM, cabatsto wrote:

    There are a few things to keep in mind with GeoEye.

    IKONOS, their current satellite, is at the end of its design life. They will still receive revenue from the archive imagery but the new collect imagery revenue from IKONOS stop as soon as the satellite does.

    GeoEye1 certification is two months behind schedule and none of the contracts going forward kick in until they achive certification.

    The recently announced NGA contract is for minutes on the satellite not imagery, which means that NGA will be using up a lot of the available tasking minutes. How much, is uncertain at this point but this may hinder the commercial side of the business if they are unable to get enough tasking minutes due to the NGA commitment.

    The Google deal is exclusive to Google, which means that they cannot sign a similar deal with any other free portals.

    I suspect the business growth will be capped due to the NGA commitments and their competitor DigitalGlobe will be in a better position to capitalize on the commercial opportunities. They have 2 active satellites and will launch a 3rd in 2009 which will be completely private.

    I own GeoEye but I am watching all of this closely.

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