6 Major Insider Stock Buys In December

Insider buying can provide great insight into where a stock might be heading. Insiders usually know their companies better than the average investor or stock analyst, so when they use their own money to buy shares, it can be very meaningful. Some of these stocks are trading near the 52 week high and even appear overvalued. Others are trading near the lows for the past year, and look like great buying opportunities. I have provided links for each stock which verifies the insider buying filed with the SEC below. Here are some stocks with strong insider buying in December:

Energy Transfer Equity LP. (ETE) is trading around $40.58. Energy Transfer is an oil and natural gas pipeline company, and is based in Texas. These shares have traded in a range between $30.78 to $47.34 in the last 52 weeks. The 50-day moving average is $37.66 and the 200-day moving average is $39.27. ETE is estimated to earn about $1.44 per share in 2011, and $2.09 in 2012. ETE pays a dividend of $2.50 per share which is equivalent to a 6.1% yield. This stock has jumped higher in the past few days so I would wait for dips below $38 before buying. An insider recently purchased 1 million shares, see that here.

Fastenal Company (FAST), is trading around $43.61. Fastenal is a major supplier of industrial supplies and equipment offering everything from tools, paints, hardware goods and more. These shares have traded in a range between $28.81 to $44.40 in the last 52 weeks. The 50-day moving average is $40.36 and the 200-day moving average is $34.80. FAST is estimated to earn about $1.21 per share in 2011, and $1.41 in 2012. Fastenal pays a dividend of 56 cents per share which is equivalent to a 1.3% yield. This stock has been rising and now looks overvalued based on the PE ratio and moving average. I would sell into this rally. However, one director has purchased about 10,000 shares in the past couple of weeks. You can see the insider buying here.

Bankrate, Inc. (RATE) is trading around $21.50. This company offers financial and banking information to consumers on the Internet. The 50-day moving average is $19.03. These shares have traded in a range between $13.38 to $21.94 in the last 52 weeks. RATE is estimated to earn about 58 cents per share in 2011, and 79 cents in 2012. This stock is trading near the 52 week high and appears overvalued. I would use this rally as an opportunity to sell, especially since the PE ratio is about 30. One director recently bought over 600,000 shares. You can see the insider buying here.

Kronos Worldwide (KRO) shares are trading at $18.04. Kronos is a leading maker of specialty chemicals and is based in Texas. These shares have traded in a range between $14.16 to $34.50 in the last 52 weeks. The 50-day moving average is $19.60 and the 200-day moving average is $24. Earnings estimates indicate a profit of $2.65 per share for 2011 and $3.04 for 2012. Kronos recently announced a price increase for its titanium dioxide and this could boost profit margins. Kronos shares look cheap but this stock dropped to single digits during the financial crisis, so in a tough global economy there could be more downside here. I still think the shares are cheap enough to start buying now and the insider buying is a good sign. KRO pays a dividend of 60 cents per share which is equivalent to a 3.4% yield. Multiple insiders have been buying and recently added 15,000 shares, see that here.

GeoEye, Inc. (GEOY) is trading around $22.22. This company provides earth imaging services to businesses, governments, and other clients. The satellite based images are used to provide security, monitor agricultural and oil fields, etc. These shares have traded in a range between $17.98 to $44.68 in the last 52 weeks. The 50-day moving average is $24.27 and the 200-day moving average is $32.55. GEOY is estimated to earn about $2.02 per share in 2011 and $2.25 in 2012. This stock looks undervalued and poised for a rebound in 2012. The book value is $22.01. One insider has purchased over 550,000 share in December. You can see the repeated insider buying here.

NII Holdings Inc. (NIHD) is trading around $21.30. This company is a leading wireless communications provider under the Nextel brand name in countries like Mexico, Brazil, Argentina, Peru, and Chile. The 50-day moving average is $22.98 and the 200-day moving average is $34.69. These shares have traded in a range between $19.18 to $45.64 in the last 52 weeks. NIHD is estimated to earn about $1.64 per share in 2011, and $2.00 in 2012. The stock is trading close to book value which is $18.83, and looks like a solid buy. One insider purchased over 38,000 shares in December, see that here.

The data is sourced from Yahoo Finance and Insidercow.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 only.

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