You're Not the Only One Buying Here

Famed money manager Peter Lynch told us that executives can sell their stock for any reason, but typically buy only for one: They think the price is going to go up!

Today I've highlighted two insiders who have recently made big purchases of their own company's stock. These aren't option grants, but rather insiders putting their own money on the line, buying shares at market prices just like you and me.

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 see.

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.

Higher and higher?
Natural gas is plentiful, and with new technologies and drilling techniques permitting greater access to reserves previously unattainable, we are awash in it. Inventories continue to exceed five-year averages, even though driller Chesapeake Energy (NYSE: CHK) is scaling back its rigs in production, expecting its dry gas rig counts will fall 67% this year. The pricing of natural gas is also at some of its lowest levels in a decade.

With oil now over $100 a barrel again, it makes natural-gas vehicles much more of an economically viable alternative. Westport Innovations, a manufacturer of natural-gas engines, should be a natural beneficiary of these trends as vehicle makers line up to partner with it, though as the opportunity grows there may be some signs of frayed friendships. Cummins (NYSE: CMI) is heading off on its own with a new line of nat-gas engines for 2014, developing them outside the joint venture it has with Westport.

The natural-gas specialist continues posting higher sales and revenue, but it also keeps going deeper into the red. At some point the market will want to see a light at the end of the profit tunnel, and that could explain why it has fallen back 20% from its highs.

CAPS member crashnbrn5 says with its industry ties and trends at play, the highs Westport hit will seem quaint in the future.

we all see what's happening with natural gas, especially the bottom dwelling price it's at now. This company makes something very special for car/truck engines. Plus, they have contracts with Cummings. I think, excuse me, I know this stock will reach highs that were unheard of, we just have to be patient.

You can add Westport to your watchlist to see if its stock will remain lighter than air, and then let us know on the Westport Innovations CAPS page whether the opportunity is big enough for more than one winner.

Tuning out
Chinese online media search, gaming, community, and mobile service company Sohu.com has been doing well growing its business, and though it has many moving parts, video looks like it will be the real driving force for this mishmash of parts.

Last year when it acquired licenses for 400 movie titles from News Corp.'s 20th Century Fox, video revenue jumped 120%, with a 70% increase in unique visitors to its site, reaching nearly 200 million people. While it owns 13% of the market in China and saw ad revenues spike 120% last year, the recent $1.1 billion merger news from Youku.com (Nasdaq: YOKU) and Tudou will put it well behind its rivals.

But I think Youku may have hampered its ability by taking on too much -- and perhaps overpaying for Tudou -- which is why I rated it to underperform on CAPS, and why Sohu may have the opportunity to gain even more ground.

The CAPS community seems to agree that Youku could still be in for more trouble ahead, as more than half of them rate the Internet company to underperform the broad indexes. Add Sohu.com to the Fool's free portfolio tracker to see if it becomes the next video star.

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 multibagger returns. This special report is free for the asking, but it's available for only a limited time, so ask for your copy today!