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Thursday, October 05, 2006

Insider Buying At Xanser (XNR) & Selling At HouseValues (SOLD)

By Yaser Anwar, CSC of Equity Investment Ideas

Insider BUYING

Xanser (XNR) Date of Trade: Between third & fourth week of September Avg. Price: $5.396

In the summer, when corrosion was found in a rusting BP pipeline in Prudhoe Bay, Alaska BP was forced to shut down the pipeline until the problem could be fixed, thereby depriving America of 8% of its domestic production.

BP could have avoided this calamity, which followed a massive pipeline rupture in March that led to the biggest spill ever on land in Alaska, by utilizing the services of Xanser (XNR).

XNR's Furmanite business is recognized as the worlds leader in on-site and on-line plant and pipeline maintenance, sealing leaks in not only oil and gas pipelines but also in the power generation, chemical, pharmaceutical and marine businesses, amongst others, operating from 50 offices on five continents.

Future oil and gas development around the world demands new pipelines. This is at last being reflected in Furmanites revenue, which for 2nd Q increased to $61.4 million from $34.9 million a year earlier helped by gains in several countries in Europe and Asia Pacific.

That offset a decline at XNRs IT subsidiary Xtria, which saw a revenue short-fall to $3.2 million from $8.6 million in the same period last year. XNR's total 2nd Q net income was $756K, or 2 cents a share compared with a net loss of $1.7 million, or 5 cents a share in the 2nd Q of 05.

Is XNR's profitability sustainable? Director Charles Cox thinks so. Ahead of the 3rd Q ending in September he has bought 134,310 XNR shares at an average $5.396 each, for $717,334.

Analysts are expecting earnings of around 13 cents this year rising to 32 cents in 07, putting the shares at $6.00 on a Forward PE of 19. If Furmanite keeps up the pace and XNR fixes the problems at its IT subsidiary, Xtria, they have a potential to surpass expectations.


HouseValues (SOLD) Date of Trade: September 27th, 06 Avg Price: $6.27

Nationally, new home sales at the last count were down 17% from a year earlier with existing home sales falling by 12%. Ian Morris, CEO of HouseValues recently sold 35K of his companys shares at an average of $6.27 each for $219,460.

SOLD offers a range of services to real estate agents and to buyers and sellers. Its targets home sellers, suggesting a listing price and connecting real estate agents with both buyers and sellers.

SOLD's site targets home buyers by emailing listings to them based on personalized requests while agents also get an online prospect management system called Market Leader.

Like all other companies in this sector, SOLDs profits have been falling. For the 2nQ it made $1.9 million or 7 cents a share against $3.7 million or 14 cents a share a year earlier. To make matters worse, when announcing these figures last July SOLD announced that its CFO had left the company and that it would no longer provide guidance as to future profits, presumably because it hasnt a clue what is going to happen.

Selling by the CEO just during such a crucial time when the CFO has left & profits are in steady downfall should suggest the lack of faith in SOLD. A possible short.

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