From Our No Guts, No Glory File

First Call/Thomson Financial Insiders' Chronicle, June 21, 1999

There were those who had high hopes for upscale fitness club operator, The Sports Club (SCY). Things change. Earnings have repeatedly disappointed, causing analysts to sour. Now, as expectations flag, and the stock's following dwindles to nearly nothing, it seems only one pocket of support remains. You guessed it: the company insiders. Make no mistake, little money was made following SCY insiders last year. Throughout the year, insiders bought the stock down to its recent lows. There's no denying their persistence, though--a trait we are reluctant to fault under any circumstances. The faithful might be encouraged to hear that from April 12 through May 26, three insiders picked up 179,917 additional shares at prices ranging from $4.09 to $4.50 per share. Notably, CEO David Talla purchased nearly 160,000 shares. SCY is hardly a sure thing, but at some point the downside must surely be limited. Insiders are (very often at least) value players. If they continue to buy, The Sports Club may yet be one to keep an eye on.

Changing gears, insiders have also been aggressive buyers of Diversified Senior Services Inc. (DISS). Here, from April 18 through May 27, four insiders purchased a combined 298,720 shares at prices ranging from $3.63 to $4.25 per share. There is no denying the "graying" of America. Independent assisted living will undoubtedly become increasingly in demand. DISS, which develops and manages apartments with assisted living services for low and moderate-income seniors, might clearly benefit. Trading on average fewer than 5,000 shares daily, this issue carries all the risks associated with micro-cap stocks. For what it's worth, Management appears optimistic. More importantly, they are backing up their public statements--investing more than $1.2 M of their own money in their company's stock.

Precision Response Corp. (PRRC) management is also excited. The reason--most recently, an acquired 15% stake in California-based Internet travel product and service provider Global Reservation Systems, Inc. (GRS). Precision Response, which provides telephone-based customer service and marketing to corporate clients, has struggled to add new business and thus improve falling margins. They have made some headway. Even so, the company has established a pattern of disappointing analysts, and most have opted to wait and see. That may be best; however, while we're waiting, it maybe worth considering that company insiders (hardly compulsive buyers in the past) have been buying shares. From May 11 through May 25, four insiders acquired a total of 79,200 shares at $4.82 to $6 per share. With a roughly $ 120M market cap, PRCC may be on the hefty side of the stocks featured here. This would especially be the case should the issue revisit the $20 highs enjoyed just two years ago.