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 this week's top five:
The week's buying
|
Company |
Closing Price 2/20/07 |
Total Value of Stock Purchased |
52-Week Change |
|---|---|---|---|
|
Carriage Services |
$6.74 |
$512,000 |
35% |
|
Encore Acquisition |
$24.99 |
$1,135,011 |
(23%) |
|
First Marblehead |
$47.79 |
$243,717 |
103% |
|
L-1 Identity Solutions |
$16.02 |
$3,004,309 |
(15%) |
|
Service Corporation International |
$11.80 |
$651,000 |
46% |
Are we all about to die?
That's really the question on my mind today, because of the extraordinary amount of insider buying at death-care providers Carriage Services and Service Corporation International.
Six different Carriage executives have bought stock since last Tuesday. CEO Melvin Payne was the big spender of the bunch, shelling out $258,000 for 40,000 new shares.
Meanwhile, SCI had big purchases from CEO Thomas Ryan, CFO Eric Tanzberger, and COO Michael Webb. Chairman, founder, and former CEO R.L. Waltrip sold 60,000 shares over the same period, but that was for a trust for which he's an administrator. The sale accounted for just 3% of his holdings, according to Form 4 Oracle.
Why so bullish? Higher guidance could be playing a role. SCI, for example, said that it is earning more per interment; as a result, it should produce $0.46 to $0.52 in 2007 per-share income, easily besting the Street's $0.42 per-share projection.
What's more, SCI announced that it would boost its share repurchase program from $36 million to $200 million. With roughly $200 million in free cash flow over the trailing 12 months alone, SCI should be able to fund the buybacks organically.
But, again, SCI isn't the only one with good news. Carriage Services also beat estimates, thanks to big gains in profit margins. If both Carriage and SCI are making more per funeral, as seems to be the case, maybe this once-lagging $11 billion industry is due for a revival?
Perhaps, but the Fools participating in our Motley Fool CAPS investor intelligence database have their doubts:
|
Metric |
||
|---|---|---|
|
CAPS Stars (5 max) |
*** |
No rating |
|
Total Ratings |
35 |
4 |
|
Bullish Ratings |
30 |
3 |
|
Bull Ratio |
85.7% |
75.0% |
|
Bearish Ratings |
5 |
1 |
|
Bear Ratio |
14.3% |
25.0% |
|
Bullish Pitches |
5 |
0 |
|
Bearish Pitches |
2 |
0 |
This time, I think the prevailing wisdom in CAPS is wrong. SCI, in particular, strikes me as an interesting stock because of the buying, and because there's literally no end to the need for its services -- at least until cryogenic freezing proves to be something more than the circus act it's been lately. (Rest easy, Ted Williams.)
That's all for now. See you back here next week, when we dig through more insider deals in search of the next home run stock.
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Fool contributor Tim Beyers, ranked 1,093 out of more than 23,000 in Motley Fool CAPS, usually favors two scoops of ice cream over the inside scoop. Tim didn't own stock in any of the companies mentioned in this story at the time of publication. Find Tim's portfolio holdings in his Fool profile. His thoughts on insider buying, Foolishness, and investing in general may be found in his blog. First Marblehead is a Hidden Gems recommendation. The Motley Fool's disclosure policy is a strong buy.
