Our insider buying stock pick for this week doesn’t meet all of our criteria. It only passed our initial quantitative screen and the fact that insiders are buying the stock. After that, the fundamentals just make us wince. However, when we dug a little deeper, it was hard to ignore the insane level of insider buying of Tier Technologies Inc. ( ).

Tier Technologies, Inc. primarily provides federal, state and local government and other public sector clients, including the I.R.S., with electronic payment solutions. Headquartered in Reston, Virginia, Tier Technologies serves over 3,300 electronic payment clients throughout the United States, including federal, state, and local governments, educational institutions, utilities and commercial clients. Through its subsidiary, Official Payments Corporation, Tier delivers electronic payment solutions for a wide range of markets.

Since the beginning of the year, insiders mentioned by name have bought nearly 53,000 shares of Tier stock. That’s a total of $1.5 million of their own dollars invested into a company they know thoroughly. Add in Discovery Group, LLC and you can tack on another 2.6 million shares totaling a cool $16.5 million. That’s some serious cheese.

You might be wondering what Discovery Group, LLC has to do with insider buying. After doing a little Google ( ) investigating, we discovered that 2 Tier Tech board members, Michael R. Murphy and Daniel J. Donoghue, are Discovery Group.

Eighteen million dollars invested into 1 stock within 6 months is a major statement regardless of TIERs current fundamental picture. Insiders must like what they see when they peer into TIER’s future. We don’t profess to have a crystal ball, but one thing is for sure, people with insider knowledge don’t lie with their wallets.

The Correct Call expects that the reason for the $18 million dollar investment will be known within the next 6 months (a buyout maybe?). Whatever it is, we hope the answer will turn the wince into a big fat smile.