Insider buying in the open market is generally considered a bullish indicator. Corporate insiders often have the inside track on the company's prospects. What's more, their income is typically closely tied to their company's stock. Often a big chunk of that income derives from stock options or restricted stock. What's more, diversification argues for minimizing exposure to any one company, rather than adding to it with insider buys.

While insider selling may indicate nothing more than a college tuition bill coming due, a home remodeling, or a high-end vacation, buying is typically a sign the insider expects the stock to rise. Buying in the open market could be considered more bullish than exercising stock options because the insider found some other way to fund the purchase.

With that in mind, I ran a screen to find companies that have had open market insider buys in the past 30 days. Here are seven utilities stocks that made the list:

Security

Net Number of Buys

No.  of Shares Bought

Total Value

Market Cap (in Millions)

Black Hills (NYSE: BKH) 12 11,671 $347,000 $1,190
Unitil (NYSE: UTL) 2 6,500 $169,000 $284
Empire District Electric (NYSE: EDE) 3 2,600 $49,000 $785
Great Plains Energy Incorporated (NYSE: GXP) 1 1,250 $26,000 $2,794
MGE Energy (Nasdaq: MGEE) 2 347 $14,000 $926
Consolidated Edison (NYSE: ED) 7 233 $12,000 $15,284
Middlesex Water (Nasdaq: MSEX) 8 50 $1,000 $286

Source: Capital IQ, a division of Standard & Poor's, as of 6/23/11.

When it comes to the number and total value of insider open market buys, more could be considered better. The table is sorted accordingly. For example, there were 12 open market purchases of Black Hills totaling almost $347,000, compared with open market purchases of Middlesex Water totaling a mere $1,000. The Black Hills sign more likely marks an on-ramp you want to take.

Foolish takeaway
Insider buying signals that someone who should be in the know bets that the stock will rise. You can use this list of open market insider purchases in the past 30 days to generate research ideas and/or reinforce a contrarian view.

Are these insiders right? To help you find out, the Motley Fool recently introduced a free My Watchlist feature. You can get up-to-date news and analysis by adding companies to your watchlist now:

Fool contributor Cindy Johnson does not currently own shares of any stock in this story. 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 Fool has a disclosure policy.