Hasbro

Toymaker Hasbro (HAS, news) started its summer swoon in July, when it announced a second-quarter earnings miss. Insiders, including CEO Brian Goldner, bought more than $550 million worth of stock in a pullback that month, at around $39. Then, as the stock slipped to near $37 in the August weakness, one insider bought even more. Despite the stock weakness, insiders are betting the stock will morph into a powerhouse, just like one of the Transformers action figures the company sells.

A big problem last quarter was higher costs. But Hasbro says it has been spending a lot on The Hub, a new TV network, and that the investment should begin to pay off as viewership builds. The company predicts continued robust international sales growth, and domestic gains as more movies based on Transformers action figures roll out over the next few years. It's also launching two new lines: toys based on Sesame Street and a line of construction-related Transformers toys called Kre-O.

"We see these purchases as indicative of management's confidence level in its future earnings capacity," says Goldman Sachs analyst Michael Kelter. With Hasbro, you collect a 3.2% dividend yield while you wait.

Ruby Tuesday

The casual-dining restaurant chain Ruby Tuesday (RT, news) has been hit by a triple whammy. Disappointing results for the first two quarters of this year already had shareholders asking for the check. Then, naturally, the stock got caught up in the panic selling in August.

The upshot: Ruby Tuesday stock has fallen more than 48% from highs of $15.57 around the start of the year, to trade recently for about $8. Insiders are saying enough is enough. They've purchased almost $3 million worth of stock between $7.75 and $8.96.

CEO Sandy Beall blames recent earnings weakness on heavy advertising and competitive pricing by rivals like Red Lobster and Olive Garden, divisions of Darden Restaurants (DRI, news) and privately-owned Applebee's, challenges he predicts won't be letting up soon. To fight back, Ruby Tuesday is rolling out new restaurant concepts like Marlin & Ray's, Wok Hay, Truffles Grill and Lime Fresh Mexican Grill. Many of these are going in at smaller locations that require less investment.

Ruby Tuesday, which has more than 830 restaurants in 46 states and 14 foreign countries, also says it will continue cutting costs to support cash flow, which it will use to buy back shares. Credit Suisse analyst Keith Siegner thinks this could reduce the share count by 40% over the next three years, one reason he has a $14 price target on the stock. David Coleman, an insider expert at Argus Research, says it's very bullish that Ruby Tuesday's CEO was recently a buyer -- given that he was such a heavy seller last year and earlier this year.

Kraft Foods

Despite the overall market bearishness in early August, Kraft Foods (KFT, news) shares rallied valiantly for a moment on Aug. 4, on news that the company plans to split itself up. Kraft shares jumped to over $36 from under $34 that day. Split-ups are often seen as a big positive, because they help unlock the value of disparate product lines and divisions embedded inside a larger company.

Alas, the August market depression soon overwhelmed Kraft bulls. The stock fell below $33 after the brief rally. Now, any strength due the stock related to the split-up is only temporarily being stifled by overall market conditions. At least that's what one director seems to think -- buying $1 million worth of stock on Aug. 9 at about $33.50.

Kraft wants to split itself into two parts within a year. One would be a higher-growth global snacks company with good exposure to emerging markets, containing Kraft brands like Oreo, Lu biscuits, Cadbury and Milka chocolates, Trident gum, and Tang powdered drinks. The other would contain North American grocery brands inside a lower-growth but more-stable company paying a decent dividend. Brands in this company would include Kraft macaroni and cheese, Oscar Mayer meats, Philadelphia cream cheese, Maxwell House coffee, Jell-O desserts and Miracle Whip. "We believe that the company's split up into two companies will improve management's focus," says Credit Suisse analyst Robert Moskow who has an "outperform" rating and $41 price target on the stock.

Emerson Electric

As a company that sells test equipment, motors, switches, valves and process-automation tools to industry, Emerson Electric (EMR, news) was a natural to get hit hard by worries that the U.S. economy is slipping back into recession. All told, Emerson stock has fallen to about $46 recently from above $60 earlier this year. In the pullback in early August, insiders bought more than $2.1 million worth of stock in the $43 to $47 range.

The buying makes sense. Emerson has bet heavily on emerging markets, where growth should remain fairly strong, whatever happens in the U.S. About 19% of revenue came from Asia last year. Morningstar analyst Daniel Holland cites Emerson's "established presence in emerging markets" as one reason it should do better than other companies just trying to move in there.

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Plus the company has a management team that's "adept at weathering various financial climates," says Holland. And it has done a solid job of returning cash to shareholders. Over the past three years, the company has given shareholders nearly $5 billion through dividends and share repurchases, a practice that's likely to continue. Goldman Sachs analyst Terry Darling cites continued share buybacks, strong cash flow and a 3% dividend yield as reasons justifying a "buy" rating and $56 price target on the stock.

At the time of publication, Michael Brush did not own or control shares of any fund or company mentioned in this column. Brush is the editor of Brush Up on Stocks, an investment newsletter.

Michael Brush is the editor of Brush Up on Stocks, an investment newsletter. Click here to find Brush's most recent articles and blog posts.