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Insider buying is down markedly from the levels of this time in 2012. This is a natural consequence of the market being much higher after a significant rally. Insider selling has also picked up as officers take advantage of the rise in their vested shares and ring the cash register. This makes the few insider buys more relevant when they do occur in my opinion. I recently noticed insider buying in two $6 energy concerns, one of which is already in my portfolio.

Key Energy Services (NYSE:KEG) operates as an onshore rig-based well servicing contractor in the United States and internationally. The company offers rig-based services, including the maintenance, workover, and recompletion of existing oil and gas wells; completion of newly-drilled wells; and plugging and abandonment of wells at the end of their lives.

4 reasons KEG has upside from just over $6 a share:

  1. Several insiders have bought more than 100,000 new shares in the last few weeks. These were the first new purchases since November 2012.
  2. The stock is cheap at just 77% of book value and just over 3x current operating cash flow.
  3. The 15 analysts that cover the stock have a mean price target, ~$8.50 a share. FBR Capital upgraded the shares from "Market Perform" to "Outperform" in April.
  4. KEG is selling near the bottom of its five year valuation range based on P/S, P/CF and P/B.

ION Geophysical Corporation (NYSE:IO) is a small cap energy services firm that provides geophysical technology, services, and solutions for the oil and gas industry internationally.

4 reasons IO is a nice pick up at just over $6 a share:

  1. A director just bought 110,000 shares. It was the first insider buy since November.
  2. Given ION's ~$1B market capitalization and unique product line, I could easily see the company becoming a future acquisition target.
  3. Revenues are expected to grow at a 14% CAGR over the next two fiscal years. The stock sports a five year projected PEG of less than 1 (.79).
  4. The five analysts that cover the stock have a median price target of $9 a share on IO. The stock traded at $11 a share less than two years ago.

Disclosure: I am long IO. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Source: 2 $6 Energy Stocks Insiders Are Buying