Who's Buying Now?

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

The week's buying

Company

Closing
price
11/21/05

Total value
of stock
purchased

52-week
change

Integrated Alarm
(Nasdaq: IASG  )

$2.55

$305,613

-42%

National Atlantic
Holdings
(Nasdaq: NAHC  )

$10.51

$490,103

-11%*

National Lampoon
(AMEX: NLN  )

$2.15

$163,240

-28%

PortalPlayer
(Nasdaq: PLAY  )

$23.96

$683,432

-17%

Trump Entertainment
(Nasdaq: TRMP  )

$17.45

$2,472,591

28%*

Sources: Fool.com, Yahoo! Finance, Form 4 Oracle
* Both stocks have traded for fewer than 52 weeks; returns figured from first day of trading


The Donald a -- gulp -- buy?
I can't believe I'm actually writing this. Last Halloween, I was so bearish on Trump Resorts that I recommended shorting it on its way to bankruptcy. What a difference a year makes.

Tuesday through Friday last week, Morgan Stanley (NYSE: MWD  ) -- one of the largest creditors in Trump's recapitalized casino operation -- has been buying up stock like a hyperactive 2-year-old chomping on a candy bar. All told, the financier purchased another 138,977 shares, bringing its total ownership interest in the company to 18.2%, according to data available in the proxy statement filed on Aug. 23. The buying also further cements Morgan's role as the second-largest owner of Trump shares, behind only the Donald himself. According to the proxy, Trump owns more than 30% of the shares outstanding.

Ironically, Morgan wasn't the only buyer last week. A much smaller purchase came from 53-year-old Edward D'Alelio, a recent addition to Trump Entertainment's board of directors. D'Alelio's commitment amounted to only 2,000 shares, but his total position before the buy was 10,000 shares. In other words, he upped his stake in Trump stock by 20%. That's interesting, because he's the recently retired managing director and chief investment officer of the fixed-income group at Putnam Investments. Think he knows a thing or two about leveraged firms? Me, too.

I combed through the recent earnings report to see whether I could find the inspiration for these investors' faith, and I think I've found something. When I recommended shorting Trump last year, its debt burden was so overwhelming that I thought bankruptcy was inevitable. It wasn't too hard to see. Last September, for example, interest expense was more than double operating income. But this year, income after interest expense was actually positive. Barely.

Of course, that's nothing more than an indicator, and a pretty weak one at that. We also still don't know what Trump's maintenance capital expenditures are, or what its well-documented Atlantic City growth plans will cost. It's a sure bet that cash flow won't fund everything. But in the past, operating income didn't even cover interest payments. And that -- gulp -- makes this at least an interesting turnaround to watch.

So goes the iPod...
Next up is iPod chip supplier PortalPlayer, which has endured some rocky times recently. First, it lost some business when Apple turned to rival SigmaTel (Nasdaq: SGTL  ) for the guts of the iPod Shuffle. PortalPlayer returned with the introduction of the iPod nano but then planned a follow-on offering that left investors dismayed. That has translated to poor stock performance over the past 52 weeks.

The company has since pulled the stock offering, increased fourth-quarter guidance, and made an appearance in the new video-enabled iPod. That may be what has led director Tom Spiegel, chief executive of investment advisor Brantrock Advisors, to pick up more shares. Or it could be that he wants a greater say in the management of the company. After all, he owned 8.1% of the total shares outstanding as of March 31, and he's been buying since late October.

Think that isn't plausible? You could be right, of course. But here's the thing: Spiegel is more than a director and investor. He was a consultant in 2001 and was subsequently paid $1.6 million for his services. Perhaps the expertise PortalPlayer sought had to do with his position as a senior manager for MP3.com? Or maybe it had something to do with bringing in anyone with a connection to Apple? Spiegel was, after all, responsible for sales and partner marketing in his prior gig.

If he did develop a critical "in" at Apple, it would be important right now. The Mac maker appears to be doing everything it can to reduce its dependency on PortalPlayer, including invitingBroadcom to create a video decoder chip for the new picturesque iPod. Heading off further incursions could prove critical to the long-term health of PortalPlayer's business. Of course we'd know if PortalPlayer signed a new deal with Apple, since that's material news, but only insiders know how such negotiations are going. Spiegel may be among the select few. Or I could be completely paranoid. You decide.

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.

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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 Foolprofile. The Motley Fool has an ironcladdisclosure policy.


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