Insiders at Legato Systems Inc. (Nasdaq: LGTO) are paying little heed to financial analysts. The bearishness of brokerage houses has not dissuaded Legato executives from a recent binge of buying their companys stock.
In August and September, two top executives and one board member bought 263,000 shares in their company. The move is paying off -- so far. Since their late September purchases, which are the most recent they've reported to the Securities and Exchange Commission, Legatos share price has doubled to 10.85.
The Legato insider moves come at a time when many analysts who follow technology stocks are trying to salvage their reputations, following a year in which their predictions were 180 degrees off the mark. While they were bullish, stocks headed south. And now that its trendy to be bearish, prices are moving upward [ed.note: who knew?].
Nine of the 12 analysts who follow Legato have rated the stock a Hold (read: Sell) for the last three months. Three analysts currently rate it a Weak Buy.
During the last week of September, CEO David Wright picked up 18,000 shares in the 5.40 to 5.50 range, increasing his holdings to 22,428 shares. I thought storage management software was a good investment, he says. And obviously Im not going to buy a competitor, so I bet on myself.