Who's Buying Now?

It's Tuesday, which means it's time to check the most interesting insider purchases from the last week. After sifting through numerous filings using insider tracking tool Form 4 Oracle, here are my top five from the past seven days:

Company

Closing price 10/24/05

52-week change

Acxiom
(Nasdaq: ACXM  ) *

$20.83

-13%

AtheroGenics
(Nasdaq: AGIX  )

$15.40

- 46%

ITT Educational Services (NYSE: ESI  )

$49.20

30%

Natus Medical
(Nasdaq: BABY  )

$14.80

104%

TesscoTechnologies (Nasdaq: TESS  )

$13.00

26%

Sources: Fool.com, Yahoo! Finance.
*Returns calculated inclusive of dividends

The ax falls at Acxiom?
We begin this week with Acxiom, a data management firm that last week reported lousy earnings, which prompted private equity firm ValueAct Capital -- already a 10% owner -- to, um, act. It spent more than $7 million to boost its share in the company. Then, on Monday, it upped its offer to buy out the firm for $25 per stub. The deal would cover the roughly 77 million shares ValueAct doesn't yet own, for a total cost of roughly $2 billion.

Ironically, this time last year ValueAct made an offer to buy out MSC.Software. The bid failed, but ValueAct struck a deal with the company that bought it two new seats on the board, presumably with the idea of helping the firm generate value for shareholders. So far, the plan has paid off. Maybe it has something similar in mind for Acxiom?

Time for an Atticus pinch
Before we move on, I have a brief aside: There a lot to like about The Intelligent Investor, Benjamin Graham's classic work about investing. Indeed, there are literally dozens of lessons to take away from the book. I mention this because the next deal reminds me of my favorite lesson: Investors ought to act like owners.

Enter Atticus Capital, which last Thursday and Friday spent more than $1.8 million to acquire 120,000 shares in AtheroGenics, a biotech firm specializing in drugs for treating coronary heart disease, arthritis, and asthma, among others. The technology has captured the imagination of some on our Fool discussion boards. But I'm more interested in where AtheroGenics has been and what Atticus has managed to do by being actively involved in its other holdings.

Take Phelps Dodge (NYSE: PD  ) , for example. Earlier this month Atticus filed a letter with the Securities and Exchange Commission (SEC) in which it asked company management to use its cash to increase shareholder value. It didn't take long to see results. Last Thursday, Phelps Dodge announced it would pay shareholders a $5.00 special per-stub dividend in December and buy back some $1 billion worth of its shares next year. I suspect Graham would be proud.

Does Atticus have similar plans for AtheroGenics? Not yet, but it's likely that something is cooking. Thanks to fellow Fool Charly Travers, we can speculate what that is. In this August article, Charly related how a similar firm called Esperion Therapeutics had been snatched up by Pfizer (NYSE: PFE  ) for $1.3 billion in November of 2003. Rumors surfaced that AtheroGenics would see a similar fate. But nothing materialized, and the stock has since fallen back to earth.

Now, however, AtheroGenics' AGI-1067 for coronary disease has entered phase 3 trials. And Atticus -- a firm well known for prodding management toward beneficial outcomes for shareholders -- is buying. Call me crazy, but I can't help wondering whether the long-rumored buyout isn't too far off.

Nierenberg at it again
Let's close with Natus Medical. A little more than two months ago I profiled the firm in the debut of this weekly column. That's because former director and fund manager David Nierenberg had increased his buying of the shares. Well, he's at it again.

One week ago today, Nierenberg spent more than $7 million to purchase 600,000 shares, upping his position to more than 20% of the company. That's a huge bet, but so far his investments in Natus have been very profitable. Indeed, records at Form4Oracle show several buys made in the past six months that have returned better than 50%. Combine that record with a clean balance sheet, little institutional interest, and a high degree of insider ownership, and the stock of this Motley Fool Hidden Gems Watch List company suddenly becomes very hard to resist.

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

Further Foolishness:

  • Who says you have to come up with your own stock ideas?
  • After toiling on the margins for years, dividends are finally in again.
  • Don't leave anything to chance. Get to know the six signs of a winner.

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. Your portfolio will thank you.

Fool contributorTim Beyersusually 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. You can find out what is in his portfolio by checking Tim's Fool profile, which ishere. Pfizer is a Motley Fool Inside Value pick. The Motley Fool has an ironcladdisclosure policy.


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

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.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 497846, ~/Articles/ArticleHandler.aspx, 8/27/2014 9:06:33 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