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 5/30/06

Total Value
of Stock Purchased

52-Week Change

Dell
(Nasdaq: DELL  )

$25.02

$70,038,804

(37%)

Gannett (NYSE: GCI  )

$54.20

$107,435

(27%)

LoJack (Nasdaq: LOJN  )

$16.67

$259,861

13%

Sirius Satellite Radio (Nasdaq: SIRI  )

$4.39

$4,467,999

(27%)

Vonage (NYSE: VG  )

$12.50

$132,600

(26%)

Sources: Fool.com, Yahoo! Finance, Form 4 Oracle, SEC filings

Investor in the Dell
It was a busy week for insider buying, so let's get right to the big news: Dell (Nasdaq: DELL  ) founder Michael Dell spent more than $70 million last Wednesday to acquire 2.9 million more shares of his company.

That's certainly impressive -- $70 million and all. But it's worth keeping this in context, too. Michael Dell owned roughly 213 million shares before the purchase, according to an SEC filing. So with this buy, he increased his stake by slightly more than 1%. At the same time, I'm not going to sneeze at anyone dropping $70 million into an investment.

Also, a bargain is a bargain, and Dell appears to think he has found one. I'm not so sure. Foolish friend Seth Jayson's bearish arguments have been persuasive. But what if he's wrong? Dell may be able to recover from some of its margin woes, thanks to its new deal with Advanced Micro Devices (NYSE: AMD  ) . Specifically, Dell will be using AMD's Opteron chip to power new servers featuring four or more processors. Of course, the PC maker will have plenty of competition from Hewlett-Packard, IBM, and Sun Microsystems in that arena, but it needn't sell many boxes to earn a meaningful amount of high-margin revenue.

But there has to be more to justify spending $70 million on this sucker, right? I sure think so. That's why I wonder whether Michael Dell is buying not only because the stock is cheap compared with historical multiples -- Dell stock hasn't traded for less than 20 times average earnings since 1996, according to Capital IQ -- but because there are meaningful business changes about to take place . say, perhaps, a broader partnership with AMD.

Of satellites and symbolism
Some insider buys are inspiring. Others are annoying. Each end of the spectrum is represented in this week's report.

Let's begin with the bad news. Vonage had a miserable debut this week on the New York Stock Exchange. For some, like Foolish colleague Bill Mann, that's to be expected. But even Bill may have gone easy on these clowns. Here's why: Four Vonage executives made purchases of the stock the day of the offering, all at $17 per share. That sounds great, but none of these buyers risked anything big. Instead, it all appears to be a cheap piece of theater.

Take chairman and chief strategist Jeffrey Citron, for example. He spent a whopping $1,700 on shares. Well, whoop-de-doo. He was already a 10% owner of the company before the offering. And that's in no small part due to a generous compensation package that granted him more than 40% of the options allocated to employees last year.

Oh, and he's also due to make at least $600,000 annually. That's $100K more than CEO Michael Snyder, who also picked up 100 shares for his portfolio.

Now compare this stunt with what Mel Karmazin is doing at Sirius. For the second time this year, he purchased 1 million shares of the stock on the open market. Bear in mind that Karmazin doesn't have to do this. Though Sirius has an executive stock ownership requirement, he passed the minimum long ago. That means there's only one credible explanation for his buying: He believes he'll receive market-crushing returns on his investment. I, for one, hope he's right.

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.

Get the inside scoop on stocks of all sizes with this 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. 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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