Four Picks That Energize Insiders

Reasonable minds may differ about where oil and gas prices are headed from here.

The selloff from recent highs has been severe, silencing (for now) the heads that talked of oil at $100, and emboldening others to claim that $35 may be a better price target. The $35-a-barrel crowd is counting on a warm winter and an inverted yield curve that foreshadows a global slowdown. Anyone predicting new highs this winter is praying for an extended cold snap in the short term but ultimately relying on a robust world economy to keep the U.S. and China, among others, competing for resources.

Energy bears likely view the cascading charts of oil-related stocks as falling knives not worth catching. But anyone who thinks that $50 -- or even $45 -- will be the near-term nadir should start working up a short list of energy plays to get into when they are ready. For those in the latter camp, insiders are making the task easier.

Executives and directors at Goodrich Petroleum (GDP - commentary - Cramer's Take) and PetroQuest Energy (PQUE - commentary - Cramer's Take) have been indicating via recent purchases that the selloff in their securities may be nearing an end. And shares of Chesapeake Energy (CHK - commentary - Cramer's Take) and Nabors Industries (NBR - commentary - Cramer's Take) have come down to where insiders last purchased a few months ago.

What I find most interesting about the recent purchases (and those of Chesapeake and Nabors months ago), is that they generally represented an averaging up of holdings by insiders. At Goodrich, for instance, director Josiah Austin has been steadily accumulating shares since they traded below $5. His latest purchases were for just shy of $20 a share -- not too far below where it trades now. Three other insiders have also purchased shares since last May, at prices ranging from $16.70 to $20.05, even though the stock had nearly doubled over the 12 months leading up to their buys.

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At the time of publication, Moreland was long Goodrich Petroleum and PetroQuest, although holdings can change at any time.

Jonathan Moreland is director of research and publisher of the weekly publication InsiderInsights, founder of the Web site InsiderInsights.com and the director of research at Insider Asset Management LLC. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. While he cannot provide investment advice or recommendations, Moreland appreciates your feedback; click here to send him an email.