Stocks the Rich Executives Are Buying

Put five Fools in a room, ask them how they invest, and you'll likely get five different answers. Some like growth, others value, or small caps, or dividends, or, well, you get the picture.

Yet while our styles differ, we all want excellent, engaged managers running the companies we own. We like it even more when these managers are also owners -- investors like you and me who, in trying times like these, are willing to buy as others sell. That's why I write this column every week.

The week's buying
So which rich executives are buying now? Have a look, courtesy of our friends at Form 4 Oracle:

Company

Closing Price 5/12/09

Total Value Purchased

52-Week Change

Dollar Thrifty Automotive (NYSE: DTG  )

$4.70

$20,000

(63.5%)

Immersion (Nasdaq: IMMR  )

$3.73

$40,934

(63.7%)

Spectrum Pharmaceuticals (Nasdaq: SPPI  )

$4.01

$1,012,500

126.6%

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

A touch of Immersion
If "cloud computing" is the new buzzphrase for business computing, "touchscreen" is the new thing for consumer computing, thanks to the iPhone.

The list of touchy-feely tech seems to grow daily. Hewlett-Packard (NYSE: HPQ  ) sells the TouchSmart touchscreen PC. Palm's (Nasdaq: PALM  ) Pre smartphone uses a touchscreen to handle most functions, as does Research In Motion's (Nasdaq: RIMM  ) BlackBerry Storm. With more vendors choosing touchscreens, Immersion -- a producer of touchscreen, or "haptics," technology -- should be profiting.

"With a high concentration on mobile (55%), Immersion is positioned very well to get a large share of the touch-screen revolution that is very obviously the next big wave in phones," wrote CAPS investor elmedico27 in February. Continuing:

Not just the iPhone, but... Samsung, T-Mobile, Palm ... if [Immersion] can capitalize big on this growth, this stock should perform well for several years to come.

Yet Immersion has a mixed record. Year-over-year annual revenue ballooned 24.6% in 2007, only to slow to a 3.9% clip over the trailing 12 months. From a 2007 operating loss of negative $9 million, operating profit has slipped further, to a loss of $27 million in the last four quarters. Ouch.

Immersion has since discontinued a line of 3-D products, a move that added a minimal $235,000 gain on sale in the latest quarter, according to the latest 10-Q report. Immersion also suffered $646,000 in restructuring costs due to various workforce reductions.

Clearly, the company needs more and higher-margin sales, and it seems to be making progress in that regard. For example, Immersion's haptics devices are scheduled to appear in Nokia's (NYSE: NOK  ) newest smartphones, and in robotic surgery products from MAKO Surgical. Our 130,000-strong Motley Fool CAPS community finds that encouraging:

Metric

Immersion

CAPS stars (out of 5)

*****

Total ratings

1,027

Percent bulls

97.7%

Percent bears

2.3%

Bullish pitches

150 out of 150

Data current as of May 12, 2009.

Insiders also like their company's positioning. CEO Clent Richardson and board member Jack Saltich each bought shares last week. Saltich, in particular, made a big bet by adding 10,000 shares to a previously absent direct stake.

There's your update. See you back here next week when we dig through more insider filings in search of the next home run stock.

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Fool contributor Tim Beyers is slowly improving his CAPS score. Thankfully, he's doing better as an analyst for Motley Fool Rule Breakers. Tim owned shares of Nokia at the time of publication. Check out his portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. The Motley Fool is also on Twitter as @TheMotleyFool. Its disclosure policy knew a rich executive once. She never bought anything.


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