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

Company

Closing price 3/7/06

Total value of stock purchased

52-week change

CBS (NYSE: CBS  )

$24.36

$1,087,044

(7%)*

Cenveo (NYSE: CVO  )

$15.15

$1,863,521

311%

First American (NYSE: FAF  )

$38.72

$201,288

(7%)*

Intuit (Nasdaq: INTU  )

$48.88

$96,940

10%

WebMD (Nasdaq: WBMD  )

$37.05

$1,107,658

60%

Sources: Fool.com, Yahoo! Finance, Form 4 Oracle, SEC filings.
*Returns adjusted to reflect the impact of dividends.

Dr. Nejat Seyhun agrees to an interview
Let's begin with good news. Dr. Nejat Seyhun, a professor at the Ross School of Business at the University of Michigan, and author of Investment Intelligence from Insider Trading, has agreed to an interview. I'm thrilled. Please look for it at Fool.com in the coming weeks. In the meantime, if you'd like some insight into what he says in his book, click here to read Tom Gardner's summer 2004 interview with Dr. Seyhun. (Typically, you'd have to be a Motley Fool Hidden Gems subscriber to access the interview. But this time, a 30-day all-access pass will do. Give it a try.)

WebMD fit for insiders
We've been none too bullish on WebMD since its IPO in October. There's a good reason: The purveyor of online health information has been a consistent money-loser. But last week, our resident Foolish cop, Rich Duprey, did a startling about-face, admitting that his initial diagnosis of WebMD was, um, dead wrong. Instead of cautioning investors to stay away from a puppet firm -- WebMD was spun off from Emdeon (Nasdaq: HLTH  ) , which remains the majority shareholder -- Rich now says he should have recognized that the owners had a considerable stake in seeing the stock rise.

Well, it has -- more than 60% as of this writing, in fact. And now the owners are adding to their already considerable stake. Last week, two directors, including chairman Martin Wygod, invested more than $1.1 million in shares of the stock. It's at this point that I usually venture a guess as to why the shares are so appealing. But this time I'm at a loss. I simply have no idea. (But if you do, please, send a note my way. I'd love to hear from you.)

The curious case of Cenveo
Next up is Cenveo, a print services company that last year was the source of a hostile takeover by Burton Capital Management. I'm not going to go into all the details of the bid; it's enough to say that the strategy worked and Burton chief Robert G. Burton is now chairman and CEO of Cenveo. (If you must have details, click here for Foolish colleague Tom Taulli's incisive reporting.)

Here's why any of this matters: Last week, three different directors, including Burton and Cenveo's general counsel, bought shares in the company. The total price tag was more than $1.8 million. Nice. There's just one thing that rubs me kinda strange: Cenveo announced the purchases, and Burton is listed as the press contact.

That seems remarkably weird to me. The release explains that trading has been restricted since November. So, what, the announcement is to assuage fears among those who were looking for more purchases from Burton? OK, but, as a former PR guy, I'm inherently suspicious of releases like this. And even if Burton's motives were pure, it just seems a bit weird to announce purchases this way. But it probably doesn't amount to much in the swing of things.

A good week for value?
Finally, I find it interesting that two of Philip Durell's picks for Motley Fool Inside Value made the list this week. Perhaps that's because both First American and Intuit have been subject to bad news of sorts. (Value investors buy when stocks take a beating on news that should have little impact on long-term returns on capital.)

First, in February, Intuit reported good results but gave guidance that left white-shoe Wall Streeters wondering when they'd be able to get a polish. Not that there wasn't some room for concern. As Foolish colleague Seth Jayson reported here, free cash flow was down, and Fools need to be assured that the hiccup is temporary. Chief Marketing Officer Mark Schar seems to think so. He bought shares in January, before the hysteria, and then doubled down on Monday.

Second, First American and other title insurers are under investigation for allegedly participating in a scam whereby insurers offered big rebates to those that brought them business. New York Attorney General and gubernatorial candidate Eliot Spitzer is on the case, and most investors have run for the hills at the news. But not CEO Parker Kennedy. on Tuesday, he spent a little more than $200,000 to buy shares in his company's stock. The move jibes with assurances he gave to Philip in a conversation that was then relayed to Inside Value members in this post. (Take a 30-day test drive of Inside Value to get immediate access.)

Frankly, I think both cases represent situations where insiders are buying because they have good reasons to believe their stocks are being unfairly discounted. But, of course, you'll have to judge for yourself.

That's all for now. See you back here next Wednesday, 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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