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 buy for only one: They think the price is going to go up!

Below, we highlight a handful of insiders who have made big purchases of their own company's stock in the past week. 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. We'll pair this information with insights from the members of Motley Fool CAPS to see whether they think the stock has the same prospects the insiders do.


Insider, Position

Market Value of Transactions

CAPS Rating (out of 5)

Cirrus Logic (Nasdaq: CRUS)

Robert Smith, director

$3.0 million


General Electric (NYSE: GE)

Alan Lafley, director

$0.5 million


CA (Nasdaq: CA)

William McCracken, CEO

$0.4 million


Sources: The Wall Street Journal, Motley Fool CAPS.

Although following the lead of insiders can be profitable, we still recommend that you do further due diligence to determine whether these stocks make a good addition to your own portfolio. This isn't a list of stocks to buy, but just the inside track on companies you might want to check out.

An investment in the future
Thanks to Apple's (Nasdaq: AAPL) iPad, growth in the tablet-computer segment is far outstripping that of PCs. Analysts have revised their estimates and expect PCs and notebooks to grow at far slower rates in 2011 than previously anticipated.

Manufacturers are planning a mass introduction of tablets this year, and Motorola Mobility (NYSE: MMI) is generating a lot of buzz about its Xoom offering as it tweaks Apple's nose, but the key to the tablet market remains the iPad until competing products actually hit the market. So look for TriQuint Semiconductor (Nasdaq: TQNT) and Cirrus Logic, both of which have special relationships with Apple across its product lineup, to enjoy the ride up.

Although there's risk in having such dependency on one customer -- Apple was responsible for 54% of Cirrus' revenues in its most recent quarter -- CAPS member doctorsynthesis expects the proliferation of tablet computers to make this year a particularly remarkable one in the company's history: "[T]heir chips are found in everything Apple from macbooks, ipads, ipods and iphones. No wonder [Cirrus] has been rising as of late as people take note of its stable revenue stream and tremendous growth potential (a number of other tablet makers are also utilizing their chips....with 2011 poised to be the year of the tablet....I'd say [Cirrus] is set for a remarkable run)."

Enterprising growth
Mega-conglomerate General Electric has found itself in the happy spot of having all of its business units performing smoothly. From financial services to medical devices to energy, revenues and profits have been on the rise, with earnings enjoying their third straight quarter of double-digit growth. In particular, its industrial segment saw revenues jump by 6% to $29.5 billion after adjusting for acquisitions, dispositions, and currency fluctuations.

Along with industry peer United Technologies (NYSE: UTX), the General is also looking to make a bigger mark in emerging economies, especially China and India. With a company as large as GE, it's hard to get the needle to move, so its achievements are particularly noteworthy. But with GE's fingers in so many pies, DowDogDan is looking for the payoff to finally come.

It's GE. It has interests [in] so many things that something should pop now that the finance arm of the business has achieved some normalcy. GE has been involved in businesses in China and other Asian countries for a long time. These should start to pay off sometime as these areas come into their own.

You can follow along by adding the conglomerate to your watchlist and having all the Foolish news and analysis aggregated for you.

Put up or shut up
Although it was CA's CEO that bought the lion's share of company stock after the price fell by 10% after its disappointing earnings report, another high-level executive also bought a nice slug of stock worth some $60,000. That's obviously not the biggest stock purchase ever made, but it's a worthy vote of confidence that the market misread the quarterly report. After all, the company actually beat estimates and raised guidance, yet it seems everyone focused on the drop in bookings. Back in December, CAPS member chrisacard explained why he believes CA is a solid financial bet.

Solid financials with a trend of growth from 2008. EBIT growing and Cash outpacing A/R growth. A reduction in R&D seems [strange; however,] they seem to be slightly more focused on selling the products they offer now. Also seem to be focusing on investing and buying back stock.

Add CA to the Fool's free portfolio tracker, and then head over to the CA CAPS page and give us your view on its growth prospects.

On the inside track
Following the insiders can be a path to profits, but it pays to start your own research on these stocks on Motley Fool CAPS. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made, all from a stock's CAPS page. Sign up today for the completely free service, and tell us whether it's worth trading on this inside information.

The Motley Fool has written puts on Apple, which is a Motley Fool Stock Advisor recommendation. The Fool owns shares of Apple, Cirrus Logic, and TriQuint Semiconductor. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Fool contributor Rich Duprey owns shares of Motorola Mobility but does not have a financial position in any of the other stocks mentioned in this article. You can see his holdings here. The Motley Fool has a disclosure policy.