Famed money manager Peter Lynch told us 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'm highlighting mobile-game maker Glu Mobile (NASDAQ:GLUU), which saw one of its directors buy more than $9.9 million worth of stock last week. These aren't option grants, either, but purchases made on the open market just like you and me.

Glu Mobile snapshot

Market Cap

$234 million

Revenue (TTM)

$77 million

1-Year Stock Return

15.4%

Return on Investment

(59.3%)

Estimated 5-Year EPS Growth

33.8%

Dividend and Yield

N/A

Recent Price

$3.59

CAPS Rating

**

Source: FinViz.com. N/A = not applicable; Glu Mobile does not pay a dividend

Although following the lead of insiders can be profitable, I still recommend you do further due diligence to determine whether this stock would make a good addition to your own portfolio. So this isn't a call to buy, but just the inside track on a company you might want to check out further.

It's all fun and games
Maybe it's time I revisit my belief that mobile gaming companies like Glu and Zynga (NASDAQ:ZNGA) have futures that get timed out. Social networking sites continue to invest in the apps and Wall Street sees exponential growth over the next few years. Maybe now is the time to play ball!

Not only is Facebook (NASDAQ:FB) continuing its reliance upon Zynga for a substantial portion of its revenue, but Renren (NYSE:RENN), China's real-name social networking site, is looking to expand its offerings even more. Moreover, with mobile devices proliferating, market researchers at NPD Group contend more than half of all game playing is conducted on smartphones and tablet computers, a phenomenon they don't see abating any time soon.

That could be why the analysts at Stifel Nicholas forecast mobile gaming will be growing at a 30% compounded annual rate for the next few years. In particular, they see Glu benefiting from its substantial original content portfolio, more production capacity, sequels to current hits, and making its games more social.

...till someone loses an eye
Where we probably disagree is on the value of its "freemium" model -- the "free to play, pay to play more" business strategy. Stifel sees Glu as the leader, something I don't dispute, but I'm not sure players enjoy being nickel-and-dimed. Because it generates 80% of its revenue from that model, should it read the market wrong about consumers' willingness to pay up, the stock could experience a meltdown.

Admittedly the parabolic growth curves analysts and researchers love to extrapolate are intriguing. If it does come to pass, I believe we'll see the lion's share of the growth going to already established game makers, like console makers Electronic Arts (NASDAQ: EA) and Sony (NYSE: SNE). They already have the infrastructure in place to make the move to mobile devices, and largely they are already doing so. If nothing else, EA is backing up the contention that the freemium model is the future, even if the company hasn't been successful at it so far.

Playing for keeps
At 21 times earnings estimates, Glu still seems rather expensive considering EA, Activision (NASDAQ: ATVI), and Take-Two Interactive (NASDAQ: TTWO) trade at half that rate, though admittedly analysts don't see their earnings growth prospects being nearly as strong as Glu Mobile's.

I've rated Glu Mobile to underperform the market indexes on Motley Fool CAPS, the 180,000-member investor community that transforms informed opinion into stock ratings of one to five stars. The stock has fallen 36% since I weighed in on it back in March, compared to a 4% gain giving me a winning score thus far. Given Glu's low two-star rating, it seems more than a few investors concur.

But tell me in the comments box below whether you disagree with my assessment of the gaming market and believe the insider buying suggests Glu Mobile is about to score some major hit points.

Rich Duprey has no positions in the stocks mentioned above. The Motley Fool owns shares of Activision Blizzard and Facebook and is short Sony and has the following options: long JAN 2014 $20.00 calls on Facebook and long JAN 2013 $22.00 calls on Sony (ADR). Motley Fool newsletter services recommend Activision Blizzard, Facebook, and Take-Two Interactive . Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.