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Insider buying can be a great sign that a stock is a real value or that it is going higher in the near future. Insiders tend to know their companies better than outsiders or analysts, so when they put their own money in share purchases, it can be meaningful. The fact that insiders are buying these names could be a sign that there is significant upside potential in them.

While these companies can be considered cheap in terms of PE ratio and other valuation metrics, some of these companies have moved up recently, so I would wait for pullbacks in those and buy in stages only. I have provided links for each stock which verifies the insider buying filed with the SEC below. Here are the stocks:

Hot Topic, Inc., (NASDAQ:HOTT) is trading around $6.52. Hot Topic is a specialty retailer and is based in California.These shares have traded in a range between $4.58 to $8.64 in the last 52 weeks. The 50 day moving average is $5.53 and the 200 day moving average is $5.52. Earnings estimates are 9 cents for 2011 and 19 cents for 2012. The book value is stated at $4.87. You can see the insider buying here.

What Hot Topic insiders and other investors might be seeing: There has been repeated and substantial buying by two directors at this company. The company recently reported that sales fell in March about 5%, you can read about that here. This company pays a dividend of 28 cents per share which is equivalent to a 4.3% dividend yield.

Sun Bancorp, Inc. (NASDAQ:SNBC) shares are trading at $3.96. Sun Bancorp is a regional bank, based in New Jersey. The 50 day moving average is $3.96 and the 200 day moving average is $4.56. Earnings estimates for SNBC are for a loss of 73 cents per share in 2011 and a profit of 4 cents for 2012. The 52 week range is $3 to $5.80. Book value is stated at $5.33. You can see the insider buying here.

What Sun insiders and other investors might be seeing: There has been repeated and substantial buying from multiple insiders. One of the insiders is famed investor Wilbur Ross. If he is investing, I have to think this bank is likely to be on a clear path upward. The stock also looks cheap in terms of book value.

Culp, Inc., (NYSE:CFI) is trading around $52.79. Culp manufactures fabrics and is based in North Carolina. These shares have traded in a range between $6.56 to $14.10 in the last 52 weeks. The 50 day moving average is $9.62 and the 200 day moving average is $10.18. Earnings estimates for CFI are 92 cents per share in 2011 and 92 cents for 2012. The book value is stated at $5.61 per share. You can see the repeated insider buying here.

What Culp insiders and other investors might be seeing: This stock recently dropped from about $10, so insiders might be doing some bargain hunting. Also, this company does a lot of fabrics for mattresses and the mattress-maker industry appears to be picking up for some.

Insmed, Inc., (NASDAQ:INSM) shares are trading at $8.75. Insmed is a biotechnology company, and is based in New Jersey. These shares have traded in a range between $4.69 to $12.10 in the last 52 weeks. The 50 day moving average is $6.04 and the 200 day moving average is $6.56. Earnings estimates are expected be negative for 2011. You can see the repeated insider buying here.

What Insmed insiders and other investors might be seeing: The book value is currently at $12.26. This company has lots of cash and a strong balance sheet. This company recently received approval for a phase 3 study which you can read about here.

Zep, Inc., (NYSE:ZEP) is trading around $18.08. Zep produces and markets cleaning products and is based in Georgia. These shares have traded in a 52 week range between $15.43 to $20.95. The 50 day moving average is $16.90 and the 200 day moving average is $17.86. Earnings estimates for ZEP are at $1.13 per share for 2011 and $1.36 for 2012. You can see the insider buying here.

What Zep insiders and other investors might be seeing: The book value is reported to be $6.27. This company pays a dividend of 16 cents per share which is equivalent to a .9% dividend yield. The estimates for earnings growth is significant next year.

Compass Diversified Holdings (NYSE:CODI) shares are trading at $15.12. CODI makes investments in other companies and is based in Connecticut. These shares have traded in a 52 week range between $11 to $18.58. The 50 day moving average is $15.52 and the 200 day moving average is $15.40. Earnings estimates for CODI are at $1.77 per share for 2011 and $1.95 for 2012. You can see the insider buying here.

What Compass insiders and other investors might be seeing: This company pays a significant dividend of $1.44 per share which is equivalent to a 9.8% dividend yield. This company has investments in a number of companies that show promise in terms of growth and investment gains.

Schnitzer Steel Industries, Inc., (NASDAQ:SCHN) is trading around $60.04. Schnitzer is a leading steel and iron company and is based in Oregon. These shares have traded in a range between $37 to $69.43 in the last 52 weeks. The 50 day moving average is $62.98 and the 200 day moving average is $55.35. Earnings estimates are at $4.17 for 2011 and $5.02 for 2012. The book value is stated at $37.34. You can see the insider buying here.

What Schnitzer insiders and other investors might be seeing: Steel demand has been rising and there could be additional demand from the rebuilding efforts in Japan. This company pays a dividend of 7 cents per share which is equivalent to a .1% dividend yield.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Disclaimer: The data is sourced from Yahoo Finance and Stockcharts.com. The information and data is believed to be accurate, but no guarantees or representations are made. Rougemont is not a registered investment advisor and does not provide specific investment advice. The information contained herein is for informational purposes.

Source: 7 Cheap Stocks With Fresh Insider Buying