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 11/7/06

Total value of stock purchased

52-week change

Bank of South Carolina (Nasdaq: BKSC  )

$15.99

$127,800

13%

Cash Systems (Nasdaq: CKNN  )

$6.45

$90,289

0%

Cenveo (NYSE: CVO  )

$20.25

$1,860,128

74%

Owens Corning (NYSE: OC  )

$28.10

$1,055,804

2%*

Red Robin Gourmet Burgers (Nasdaq: RRGB  )

$34.70

$638,368

33%

Sources: Fool.com, Yahoo! Finance, Form 4 Oracle, SEC filings
*Owens Corning began trading on Nov. 1, 2006.


Rockin' Red Robin
There are several criteria I seek when picking a stock. Insider buying, as readers of this column know well, is one of my favorites. So is rapid sales growth. On both counts, burger joint Red Robin does well. Perhaps that's why so many participants in our Motley Fool CAPS community-intelligence service like the stock:

Metric

Red Robin

Total ratings

49

Bullish ratings

43

Bull ratio

87.7%

Bearish ratings

6

Bear ratio

12.3%

Bullish pitches

13

Bearish pitches

0

Source: Motley Fool CAPS

Let's touch on growth first. In the most recent quarter, sales grew by more than 30%, significantly higher than the 22.2% average annual growth the firm has produced over the past three years. Profits, however, were like a bad pickle -- down 8%.

What's more, fellow Fool Dave Meier suggested in a recent write-up that reduced guidance and fleeing analysts were responsible for the shares' 26% drop on earnings day. But he wasn't entirely sure that drop was justified at the time.

Neither was management. Between Election Day and Monday, five different executives bought shares of Red Robin, including lead director Edward Harvey, who coughed up more than $350,000 to pad his position in the stock by 10,000 shares.

Does that make Red Robin a buy? Dave isn't so sure, thanks mostly to flat returns on invested capital, which suggest that the restaurant's rapid growth isn't delivering as much value as the sales numbers might suggest. Nevertheless, I find it mouthwatering that Red Robin is trading for just 11% more than its long-term growth rate in an industry where a 44% premium is the norm. Time to add this stock to my watch list. You may wish to do the same.

The other OC
The O.C. is one of my wife's favorite shows. Now, the other OC, as in the stock ticker for Owens Corning, may become one of my favorites.

Owens Corning came public again this month after a six-year journey through bankruptcy that was, at least in part, imposed by liabilities to asbestos litigation. But the legal woes' resolution could now lead to huge benefits for investors.

Indeed, according to a recent Wall Street Journal article, this more boring OC can expect several years of few or no taxes, thanks to its contributions to a $3.5 billion asbestos trust. That's especially intriguing when considering that the insulation specialist, which has substantially reduced its dependence on new home construction for sales, trades for just 10 times 2006 earnings, according to the Journal.

Perhaps that's why more than 10 insiders have spent more than $1 million to purchase shares since Election Day? It wouldn't surprise me a bit. Color my CAPS portfolio pink as I add the home of the Pink Panther to my list of selections.

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.

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Fool contributorTim Beyers, ranked 2,168 out of 12,984 in Motley Fool CAPS, 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. 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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