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 11/21/06

Total value of stock purchased

52-week change

Energy Conversion Devices (Nasdaq: ENER  )

$36.45

$93,500

22%

Enterprise Products Partners (NYSE: EPD  )

$28.30

$391,792

11%

Gray Television (NYSE: GTN  )

$6.00

$197,862

(34%)

MSC Software (Nasdaq: MSCS  )

$13.80

$201,450

N/A*

Technical Olympic USA (NYSE: TOA  )

$8.75

$90,000

(57%)

Sources: Fool.com, Yahoo! Finance, Form 4 Oracle, SEC filings
*Historical prices not available for MSC Software.

New energy for Energy Conversion Devices
As bumpy a year as it's been for Energy Conversion Devices, which has a virtual monopoly on the essential parts that power hybrid car engines, investors remain undaunted.

How do I know? Just look at the overwhelming bullish sentiment expressed by those participating in the Motley Fool CAPS community-intelligence stock database:

Metric

ECD

Total ratings

130

Bullish ratings

110

Bull ratio

84.6%

Bearish ratings

20

Bear ratio

15.4%

Bullish pitches

26

Bearish pitches

4

Source: Motley Fool CAPS

Improving results could be to blame. Energy Conversion produced one of its best quarters in years, trimming its net loss by more than two-thirds. Meanwhile, sales rose 17% year over year, and cash from operations improved from a $6 million loss in the year-ago period to nearly breakeven this time around.

Is ECD about to become a self-sustaining business? Investors seem to think so. Foolish CAPS player toddwprice explains in his pitch to the community:

[Co-founder] Stan Ovshinsky is the genius behind this company. And he's great at selling the technology. He even apparently sold George W. Bush that hydrogen-cells and thin-film [photovoltaics] are the technology of the future. He's a visionary, and I believe in the technology as well as the cause.

Todd is referring to the president's earlier pledge to move the country closer to cleaner energy sources. Since then, the Feds have begun offering tax credits for installing solar panels -- as much as $2,000 per home.

That, too, is good news for Energy Conversion, which sells photovoltaic products that capture sunlight and transform it into usable electric power under its United Solar Ovonic unit. United Solar accounted for 88% of revenue in the latest quarter.

Fools appear to believe that this confluence of events, coupled with a strong quarter, has placed ECD firmly on the path to permanent profitability. There's simply no other reasonable explanation for the stock zooming by 8% on the day of the report, like Diet Coke after a taste of Mentos.

Management is also bullish. Director Robert Frey was the first to purchase shares, adding 1,200 to his portfolio on the day of the earnings news. Then, on Monday, executive vice president and chief operating officer James Metzger acquired 3,500 shares for himself and his wife in two separate transactions.

If only I were feeling as bold. Much as the rebel investor in me enjoys the story that's unfolding at this company, I'd like to see far more diversity in ECD's revenue before betting on the shares either in CAPS or my own portfolio. For now, the stock remains a closely watched favorite.

An Olympic effort for investors
Color me equally dubious about the homebuilding sector. But recent buying by financial services president Michael Glass and a swell of bullishness in CAPS has me intrigued by Technical Olympic, which builds dwellings in Florida, Texas, the mid-Atlantic, and the western United States.

CAPS all-star JTShideler, who has outperformed more than 80% of the more than 14,000 community participants, helps to explain the appeal of the stock:

... With a PE of 2.6 and a price of book value of .63 when the rest of this depressed sector is trading at 1.5 I think this might be the value of the value. Sure it might get beat up more, yes its inventory of homes may get devalued a little, but this stock will recover one day and make a decent profit once the market wakes up and realizes that its not as bad as it sounds.

To that, I'll add that the Street says the shares are trading for just 43% of the firm's 2006 estimated growth rate, and 59% of next year's projection.

Such extreme pessimism leaves little pressure on management to effect an immediate turnaround. Consequently, any gain above the anemic 2.8% rate at which sales grew over the trailing 12 months should lead to profits for investors who buy at these levels.

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:

Get all the inside information you need in our collection ofinvesting newsletters. From wallflowerish small caps to swashbuckling Rule Breakers, we've got something for every investor.Get in on the actiontoday; all of our newsletters offer a 30-day risk-free trial. All you have to lose is the prospect of better returns.

Fool contributorTim Beyers, ranked 1,138 out of 14,325 inMotley 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. Enterprise Products Partners is a Motley Fool Income Investor pick. The Motley Fool'sdisclosure policyis a strong buy.


Read/Post Comments (0) | Recommend This Article (4)

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.

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: 511784, ~/Articles/ArticleHandler.aspx, 11/25/2014 10:08:35 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...


Advertisement