Watching insiders is like participating in a weeks-long stakeout. You expect something to happen, but you don't know what. So you settle in, sip your coffee, and wait for clues to solving the big case.

Here, the "case" is direction: Which way is your stock headed? The "clues" come in the form of insider buying and selling action. Have a look at Chesapeake Energy (NYSE:CHK) over the past year.

Insider Rating

Bearish
Stock trading either at or above levels at which many insiders have sold shares. Last year's buying now a distant memory.

Business Description

An oil and natural gas explorer and producer that has been hurt by the recent downturn in prices.

Recent Price

$27.53

CAPS Stars (out of 5)

*****

Percentage of Shares Owned by Insiders

1.06%

Net Buying (Selling)*

($577.7 mil)

Last Buyer (% Increase)

Burns Hargis, Director
1,000 shares at $24.00 apiece on Nov. 6, 2008.
(Purchase bolstered direct holdings by 10%.)

Last Seller (% Decrease)

Jennifer Grigsby, SVP, Treasurer, and Secretary
5,000 shares at $27.70 apiece on Sept. 15.
(Sale represented 2% of direct holdings.)

Competitors

Anadarko Petroleum (NYSE:APC)
BP (NYSE:BP)
ConocoPhillips (NYSE:COP)

CAPS Members Bullish on CHK Also Bullish on

Johnson & Johnson (NYSE:JNJ)

CAPS Members Bearish on CHK Also Bearish on

Starbucks (NASDAQ:SBUX)
Bank of America (NYSE:BAC)

Recent Foolish Coverage of CHK

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Sources Form 4 Oracle, Capital IQ, and Motley Fool CAPS; data current as of Sept. 26.
*Open market sales and purchases only.

What we're tracking here, and why
Insider buying data can be confusing. Here, I'm concentrating only on buying and selling conducted in the open market. With most of these transactions, insiders control the timing. Other times they're buying or selling under the purview of a 10b5-1 plan. Either way, personal holdings are being bought and sold.

Those personal holdings matter the most -- they're the shares executives hold for investment, rather than compensation. Employee stock options are different; they're compensatory in the purest sense. I've stripped out options-related buying and selling from the calculations you see above.

The Foolish view: bearish
Chesapeake Energy chief executive Aubrey McClendon was, at one time, the poster boy for successful insider buying. I sung his praises here in Fooldom over and over and over again. What I missed -- and this was a huge miss -- was the strategy behind McClendon's big-box stock buying. He was using margin.

McClendon hasn't bought shares recently. Margin calls have made him more of a seller. His company, too: Chesapeake last week sold a 50% stake in some natural gas gathering and processing assets for $588 million to a private equity partner, Reuters reports.

"Chesapeake isn't exactly my go-to example for good corporate governance," Foolish colleague and Motley Fool Inside Value analyst Joe Magyer says. "Still, I'm still bullish on them because I expect natural gas prices to take a solid post-recessionary bounce, with the shares of most natural gas producers in tow."

Fair enough. Yet even if the shares look cheap today, Chesapeake's last buyers were shopping between $13 and $24 per share. The biggest buys were made below $14 a share last October, by board member Richard Davidson and Executive Vice President Mark Lester. Knowing that, I find it difficult to like the stock at north of $27.

Do you agree? Disagree? Log into CAPS today and tell us how you would rate Chesapeake Energy.

And if you want me to take a Foolish peek at the insider action of your favorite stock, email me here or use the comments box below. I'll write this column as often as you, our readers, demand.

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Starbucks is a Stock Advisor selection. Chesapeake Energy and Starbucks are Inside Value picks. Johnson & Johnson is an Income Investor recommendation. The Fool owns shares of Starbucks and Chesapeake. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team. He didn't own shares in any of the companies mentioned at the time of publication. Check out his portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. The Motley Fool is also on Twitter as @TheMotleyFool. The Fool's disclosure policy has its eye on you.