You're Not the Only One Buying, Here

Famed money manager Peter Lynch gave us the inside scoop on how to look at insider transactions. Executives can sell their stock for any reason, he said, but they only buy for one: They think the price is going to go up!

Today, I've highlighted two insiders who've recently made big purchases of their own company's stock. These aren't executives getting big chunks of shares from option grants. Rather, they're insiders putting their own money on the line, buying shares at market prices. I then paired that information with insights from the members of Motley Fool CAPS to see if they think the stock has the same prospects the insiders do.

Source: FinViz.com.

Although following the lead of insiders can be profitable, we still recommend you do further due diligence to determine whether these stocks ought to be sold from your own portfolio -- or would make a good addition! So this isn't a list of stocks to sell or buy, but just the inside track on companies you might want to check out further.

Solid like a foam ball
It always worries me when a company gets all squishy in its mission and the declaration by Dell's enterprise group president that it's "no longer a PC company" but rather it's all about "IT solutions" sort of fits that bill.

Yes, Dell's gone a long way from the "shiny boxes" it used to produce, and it hasn't abandoned its computer division as Hewlett-Packard did -- then undid -- last year, but being an amorphous "solutions" company pretty much cedes the field to Apple (Nasdaq: AAPL), Lenovo, and Acer. Yet Apple is certainly not giving up any ground to Dell.

While the rechristened solutions provider is focusing on the enterprise market, Apple is also making strides there, seeing Mac business sales jump 51% last year with an additional 58% increase expected this year. The resulting sales estimate of $19 billion would put Apple in the same league as Dell in the large enterprise area.

While the Fool's Anders Bylund (who goes by TMFZahrim on CAPS) finds Dell headed in the right direction, and using the drop in its stock as an opportunity to buy in, I've marked the PC maker-cum-solutions specialist to underperform the market. You can add Dell to your watchlist to see if being vague is a valid growth stock attribute, then let us know on the Dell CAPS page which side you stand on.

Steel yourself for this
Metallurgical coal producer Walter Energy finds its stock trading almost 60% below the year's highs, and last quarter was symptomatic of the problems it's faced.

With an economy climbing out of a very deep hole, weak pricing sabotaged sales that were fairly strong, rising 60% year over year to 2.4 million tons. Worse, however, were the disruptions suffered at Walter's Alabama mine, which reduced output and raised its costs. Indeed, profits fell in the fourth quarter as overall costs more than doubled.

But Walter wasn't alone in its troubles. Analysts at Nomura basically took down the entire sector, finding coking coal prices a hindrance to advancement by Arch Coal and Patriot Coal (NYSE: PCX), with Alpha Natural Resources (NYSE: ANR) facing a "cyclical metallurgical coal market."

With almost 1,600 CAPS members weighing in on Walter, 95% come down on the side of it being able to beat the Street going forward. Add Walter Energy to the Fool's free portfolio tracker so you'll be able to receive news as it happens and be warned, like the canary in the coal mine, if there's new danger ahead.

On the inside track
These two companies still have big hurdles before them. Discover two other small-cap stocks the Motley Fool found with solid state contracts that have the potential to deliver multi-bagger returns. This special report is free for the asking, but it's available for only a limited time, so ask for your copy today!