Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Who's Buying Now?

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


Closing price 3/28/06

Total value of stock purchased

52-week change

AutoByTel (Nasdaq: ABTL  )




ConAgra (NYSE: CAG  )




Hawk (NYSE: HWK  )




Oakley (NYSE: OO  )




WebMD (Nasdaq: WBMD  )




Sources:, Yahoo! Finance, Form 4 Oracle, SEC filings

That's no con job
We begin this week with food producer ConAgra, which has struggled recently. Indeed, expectations have disappointed. Earnings have come in light. And a restructuring plan that includes cutting the dividend and selling businesses that, during 2005, accounted for 20% of ConAgra's sales has only just begun.

While the prologue of this so-called turnaround story has barely been written, last week brought a plot twist. CEO Gary Rodkin, architect of the restructuring plan, opened an ownership stake in the company the same day as Robert Sharpe, ConAgra's top PR guy. Together the pair bought 109,000 shares for close to $2.3 million.

At first, my inner skeptic wondered whether the buying amounted to little more than a very expensive PR stunt. Let me explain. Sharpe and Rodkin were together at PepsiCo (NYSE: PEP  ) in years past, and Sharpe's post at ConAgra is a new position. He joined the company from an investor relations firm in December, two months after Rodkin assumed the top job.

What's more, Rodkin's employment agreement says that his 2006 salary could be at least $3 million after bonuses. Put in that context, his $1.5 million stock purchase, while substantial, isn't nearly as huge as it might sound at first blush.

But all of this assumes there is no case to be made for ConAgra's shares. That's simply not true. Indeed, a thumbnail valuation shows that the stock trades for roughly 15.8 times this year's earnings and 18.4 times 2007 income. Both are substantially lower than the firm's 19.2 average annual P/E, according to researcher Value Line. For those willing to study the dozens of chapters still being written in this sordid tale, value may be tucked away in the margins.

Hawk performs a flyby
Next up is Hawk, a maker of industrial parts, including brakes and clutches for cars, airplanes, and farm equipment. The stock has had a great run over the last year, but the company has seen better days. For example, earnings were lower in the most recent quarter because of a pending move of manufacturing facilities to Oklahoma.

Management says growth should recover when the move is completed and the company is yielding the benefits of a better production facility. That's a roll of the dice, to be sure. (Manufacturing is never easy to master.) But management isn't hedging its bets. Both CEO Ronald Weinberg and Chief Financial Officer Joseph Levanduski bought shares last week.

Should you follow in their footsteps? It's too early to tell. For example, Hawk had negative owner earnings through the trailing 12 months leading up to its fourth-quarter earnings report, and it reported negative net income for Q4. Plus, the company's $230 million enterprise value makes it a micro-cap stock, which opens the door to stomach-churning volatility.

If there's anything to like about Hawk, it's that, at 10 times next year's projected earnings, the stock is priced as though the investment in Oklahoma won't work out as planned. And if it does work out, management, which owns roughly 39% of the shares, stands to profit handsomely right alongside common investors. Such alignment has worked wonders for Tom Gardner and Bill Mann in constructing portfolios for Motley Fool Hidden Gems subscribers. Maybe Hawk deserves a spot on the watch list, fellas?

That's all for now. See you back here next week, when we dig through more insider deals in search of great stock ideas.

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

  • Who was buying last time?
  • It's time you had a breakup strategy. And, no, I'm not talking about your girlfriend.
  • What can the George Mason Patriots teach you about investing?
  • Stock Madness is down to the Final Four. Don't miss it!

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; all of our newsletters offer a 30-day risk-free trial. All you have to lose is the prospect of better returns.

Fool contributor Tim Beyers usually 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. The Motley Fool has an ironclad disclosure 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.

Compare Brokers

Fool Disclosure

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: 502743, ~/Articles/ArticleHandler.aspx, 10/28/2016 6:11:29 PM

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...

Today's Market

updated Moments ago Sponsored by:
DOW 18,161.19 -8.49 -0.05%
S&P 500 2,126.41 -6.63 -0.31%
NASD 5,190.10 -25.87 -0.50%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/28/2016 4:00 PM
ABTL $16.11 Down -0.23 -1.41%
Autobytel CAPS Rating: **
CAG $48.09 Up +0.63 +1.33%
ConAgra Foods CAPS Rating: ****
PEP $107.07 Up +0.44 +0.41%
PepsiCo CAPS Rating: ****
WBMD $50.39 Down -0.95 -1.85%
WebMD Health CAPS Rating: **