Limited Brands Inc. (NYSE: LTD), which operates Victoria's Secret and Bath & Body Works, has seen a surge in insider buying. With over 400,000 shares having been purchased by insiders over the last week or so, clearly they believe the stock is trading cheap. For investors looking for a cheap retail stock, Limited may be the play. Chairman and Chief Executive Leslie Wexner bought 280,000 shares between the previous Friday and last Tuesday, his first open-market purchases in over 13 years.

With a PE of 10.25 and a PEG of 1.01, the stock looks cheap, even with lower guidance. I think that international expansion is the key. Not only international sales but outsourcing the production to places like India are sure to keep costs low. With an expected economic slowdown in Q1 and Q2 2008, this may be a play for second half '08, as the economy will rebound and bring the consumer along with it. This is the kind of stock I would rather be a bit early in than late, because once the market starts to move Limited shares will surge.

Finally, it's one thing when a company announces and/or completes a stock buyback. They could do it for a host of reasons. But when insiders dip into their own pockets to buy shares, it usually is a pretty good sign the bottom is near.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. Disclosure: Writer has no position in any stock mentioned as of 12/03/07.

Large insider purchases at the Limited originally appeared on BloggingStocks on Mon, 03 Dec 2007 15:37:00 EST. Please see our terms for use of feeds.