LET'S BE CLEAR: Dennis Kozlowki is a bad man. Forget for a moment about the crimes the deposed chief executive of Tyco International (TYC) is accused of, among them stealing $600 million from the company in hidden bonuses and now-you-see-them, now-you-don't loans. Look past the fact that he violated shareholders' trust and brought about an 80% decline in Tyco's market value between December 2001 and the following June. Overlook these, and there's still the matter of taste.

Kozlowski in June 2001 used company funds to throw a $2.1 million birthday party for his wife on the Italian island of Sardinia. In addition to Speedo-clad bodybuilders and a laser-light show, recently released video evidence revealed an ice sculpture of Michelangelo's Statue of David with vodka streaming out of a certain body part. (Had a painting of dogs playing poker been present, the hounds surely would have held paws to eyes in artistic dismay.)

Tyco is a name that's typically mentioned along with WorldCom, ImClone (IMCL) and Enron as a symbol of corporate wrongdoing. Which is why we're a bit surprised to find several Tyco executives guilty of some corporate right-doing in recent months. Their purchases of Tyco shares have earned the company a spot on our Insider Buying screen.

Insider buying, of course, refers to purchases of a company's stock by its executives or "beneficial holders" — those with more than a 10% stake. The government requires that such transactions be publicly reported within two business days. Savvy investors pay attention when a company's insiders suddenly begin buying. They know that these people have a better understanding of their company and its prospects than those on the outside do.

Note that insider buying isn't always a big deal. For example, as The Wall Street Journal reported on Nov. 19, recent insider purchases of $600,000 in Phoenix Cos. (PNX) stock and $200,000 in Maytag (MYG) stock appear on the surface to be endorsements by each company's top executives. But it turns out they're required to buy shares when the prices drop to keep their holdings at certain multiples to their pay. So view our Insider Buying screen as a good starting point for further research.

Insider purchases on the whole have been light of late; corporate execs bought just $52 million worth of their own stock in October, a third of their average, according to Thomson Financial. That makes the buying at the companies our stock-screening tool recently turned up all the more interesting.

We searched our 8,300-company database for those in the top 25% in terms of the dollar amount of insider buys in the past six weeks. Beyond this, our requirements were minimal. We demanded forward price/earnings multiples below their respective industry's average, and that each company has at least $200 million in annual sales and more than 100,000 shares in average daily trading volume. Our search turned up 33 names, including Tyco.

We realize that the stigma still attached to Tyco makes it an odd choice to consider for investment. And we're not suggesting that you sing its praises to friends at your next cocktail party (gladiatorial-themed or otherwise). But the company's new management is making some progress in righting the wrongs of years past — and a near doubling of the stock's price since March shows that the efforts aren't going unnoticed.

The Bermuda-based conglomerate posted a whopping $35.6 billion in fiscal 2003 sales (ended Sept. 30) from its five diversified business lines. The fire and security division (31% of sales) includes home alarm brand ADT. The electronics unit (28%) makes components, and the health-care unit (23%), medical devices. The engineered-products segment (13%) makes water valves and cabling products. And the plastics and adhesives division (5%) makes bags, duct tape and such.

Tyco's fourth-quarter results, reported Nov. 4, showed earnings before a 49-cent per-share restructuring charge of 34 cents, beating analysts' expectations by a penny. Ignoring charges, the company earned a total of $1.25 a share in 2003. And management guided analysts to expect 2004 earnings of $1.42 to $1.52.

Tyco announced that, as part of its divestiture and restructuring program, it would sell its undersea fiber-optic-cable network and exit more than 50 businesses with combined revenues of $2.1 billion in 2003, about 6% of total sales. The move should improve overall margins, since the combined businesses generated operating losses of $67 million in 2003.

Shareholders likely haven't seen the last of the charge-offs — there's still the matter of investor lawsuits to be settled. But the company seems to have generated some momentum. And viewed against today's earnings expectations, Tyco looks fairly cheap.

Shares trade at 14.7 times Reuter's Research's 14-analysts consensus of $1.49 a share in 2004 earnings, well less than the 19.4 average P/E for conglomerates. And Tyco is projected to increase earnings by 13% annually over the next five years, a bit faster than the group's 11%. That makes for a price/earnings-growth ratio of 1.4, lower than both peers and the S&P 500, both with PEGs of 1.8.

A pretty story, Tyco is not. But 10 different execs have spent a total of $1.3 million of their own money on shares since August. If they continue to pare down bad businesses, pay off debt and boost margins, their investment choice may in coming years give them cause to celebrate. Just not too garishly, we hope.

For the rest of our Insider Buying survivors, click here.