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 from the past seven days:

The week's buying


Closing Price 10/11/06

Total Value of Stock Purchased

52-Week Change

ConAgra Foods (NYSE: CAG  )




Goodrich Petroleum (NYSE: GDP  )




Hallmark Financial Services (Nasdaq: HALL  )




NeoPharm (Nasdaq: NEOL  )




Prospect Energy (Nasdaq: PSEC  )




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

Prospect an interesting prospect
Falling commodity prices have left some investors wondering whether the go-go-growth days of easy profits in oil and gas are over. Witness the falling stock prices at ExxonMobil (NYSE: XOM  ) and Chevron (NYSE: CVX  ) .

That's short-term thinking, of course. So long as alternative energy sources remain more expensive than fossil alternatives, there will always be demand for oil and gas stocks. The problem is that there's no crystal ball capable of perfectly separating the winners from the losers.

Enter Prospect Energy, a private equity financier that specializes in investments in the energy sector. Not unlike Motley Fool Rule Breakers pick Harris & Harris (Nasdaq: TINY  ) for nanotech, Prospect manages a diversified portfolio that's designed to deliver upside when the market turns favorable. Plus, it pays a rich dividend that is projected to yield 9.5% over the next year.

No wonder some of our Motley Fool CAPS players love this stock. Listen to this pitch from player philosifool, who rates the stock an outperform:

Demand in China and India will likely keep the pressure on to develop or enhance sources of energy in world. This is a good tracking stock for that underlying demand -- not the hype.

Perhaps more interesting is this bearish pitch from CAPS player buschmanj:

Technical indicators suggest the stock may be in for a near-term correction, most likely following any weakness in the oil and gas sectors. Of particular note though is that [Yahoo! Finance] estimates book value at [$15.31 a share], presenting both income and value investors with an opportunity to buy-in with a greater margin of safety should its share price continue to drop [over the short term].

How about that? The bear is nearly as bullish as the bull. I, too, am tempted, but not by technical indicators or rising demand in China and India. My interest stems from insider buying. CEO John Barry has been particularly acquisitive. His most recent purchase came last Thursday, for 14,158 shares, upping his total spent on the stock to more than $500,000 during 2006. That's quite a vote of confidence for an investment strategy that's anything but certain given the current economic climate. Color me intrigued.

Still gagging over ConAgra?
Food producer ConAgra may have the most appropriate ticker in all of the stock market. CAG, after all, sounds like "gag," which is what investors in the stock have done over the past year. (Check out how badly the stock has underperformed the S&P 500.)

But now, bullish sentiment seems to be warming, with 23 of 31 CAPS players rating the stock to outperform the S&P. Yet our all-stars disagree; two of three have put the thumbs-down on the stock.

I've yet to rate the stock; I can't decide whether the beating the shares have taken is justified. But I'll confess to leaning bearish. Stocks that chop their dividends as ConAgra has (from $0.27 to $0.18 in the June quarter) are, to me, as appealing as rotting Brussels sprouts are for breakfast.

And that's not the only bugaboo, says CAPS player onparole:

A recent share repurchase for $180 million was countered by a gifting of $180 million option package to employees, meaning that this amount of free cash flow enriched [executives] and not shareholders.

Ouch. That may all be correct. But if it is, then why has there been three times as much insider buying as selling over the past 52 weeks, led by CEO Gary Rodkin? I wish I knew; it's hard for me to see value in a stock that trades for more than three times its long-term growth rate. But the buying suggests that there is more to this stock story than meets the eye. Stay tuned.

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

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

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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. Get the skinny on all of the stocks in his portfolio by checking Tim's Foolprofile. The Motley Fool'sdisclosure policyis a strong buy.

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Related Tickers

10/27/2016 2:41 PM
CAG $47.61 Down -0.19 -0.40%
ConAgra Foods CAPS Rating: ****
CVX $100.73 Down -0.46 -0.45%
Chevron CAPS Rating: ****
GDPM $0.00 Down +0.00 +0.00%
Goodrich Petroleum… CAPS Rating: **
NEOL.DL22 $0.07 Down +0.00 +0.00%
NEOPHARM, INC. CAPS Rating: No stars
TINY $1.33 Up +0.04 +3.10%
Harris and Harris CAPS Rating: **
XOM $87.20 Up +0.11 +0.12%
ExxonMobil CAPS Rating: ****