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Insiders, naturally, work at the companies in question and have more knowledge about the firm than outsiders, which is why their buying activity is carefully monitored by the investing community.

When they put their own money on the line to purchase their company's shares it indicates they are bullish about the firm's future, and believe current share price is undervalued.

Likewise, if a pool of analysts have placed their most pessimistic target price well above current values, it is a sign stocks are trading below their fair value.

These considerations went into creating the list below. These stocks have seen significant insider buying activity in the past six months, and are currently trading below their most pessimistic target price.

Regarding target price: We only focused on companies that have more than 5 analyst target prices (to make sure we only focus on companies that have decent analyst coverage).

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six stocks mentioned below. Analyst ratings sourced from Zacks Investment Research. On average, analysts agree these stocks are a "buy."

Tool provided by Kapitall.

Do you think these stocks will meet their target prices? Use this list as a starting-off point for your own analysis. List Average 1-Year Return: 5%.

1. Amicus Therapeutics, Inc. (NASDAQ:FOLD): Focuses on the discovery, development, and commercialization of orally-administered, small molecule drugs for the treatment of various human genetic diseases. Market cap at $240.82M, most recent closing price at $4.87. Of the 5 analysts that have set a target price on the stock, the lowest price target stands at $6. This implies a potential upside of 23.20% from current levels around $4.87. Over the last six months, insiders were net buyers of 2,949,580 shares, which represents about 12.05% of the company's 24.48M share float.

2. Keynote Systems Inc. (NASDAQ:KEYN): Provides Internet and mobile cloud monitoring solutions worldwide. Market cap at $250.7M, most recent closing price at $14.14. Of the 5 analysts that have set a target price on the stock, the lowest price target stands at $17. This implies a potential upside of 20.22% from current levels around $14.14. Over the last six months, insiders were net buyers of 561,662 shares, which represents about 4.24% of the company's 13.24M share float.

3. PROLOR Biotech, Inc. (NYSEMKT:PBTH): Engages in the development of proprietary versions of already-approved therapeutic proteins. Market cap at $301.2M, most recent closing price at $4.75. Of the 5 analysts that have set a target price on the stock, the lowest price target stands at $6. This implies a potential upside of 26.31% from current levels around $4.75. Over the last six months, insiders were net buyers of 1,005,000 shares, which represents about 2.8% of the company's 35.86M share float.

4. STAAR Surgical Company (NASDAQ:STAA): Designs, develops, manufactures, and sells implantable lenses for the cataracts and refractive surgery. Market cap at $190.69M, most recent closing price at $5.21. Of the 5 analysts that have set a target price on the stock, the lowest price target stands at $7. This implies a potential upside of 34.35% from current levels around $5.21. Over the last six months, insiders were net buyers of 271,585 shares, which represents about 1.05% of the company's 25.88M share float.

5. Stewart Enterprises Inc. (NASDAQ:STEI): Provides funeral and cemetery products and services in the death care industry in the United States and Puerto Rico. Market cap at $609.61M, most recent closing price at $7.14. Of the 5 analysts that have set a target price on the stock, the lowest price target stands at $9. This implies a potential upside of 26.05% from current levels around $7.14. Over the last six months, insiders were net buyers of 1,314,895 shares, which represents about 2.1% of the company's 62.63M share float.

*Target price data sourced from Thomson/First Call (via Yahoo! Finance), insider data sourced from Yahoo! Finance. All other data sourced from Finviz.

Source: These 5 Insider Favorites Are Trading At Big Discounts To Target Price