Most of the companies in the S&P 500 have now delivered Q4 results (with the exception of retailers), and insiders are free to buy and sell shares in their companies. This is the time in the quarter when insider buying and selling tends to cluster, because in a matter of weeks, a Q1-related “quiet period” will compel these insiders to cease their trading activities.

#-ad_banner-#I tend to closely study the daily moves of insiders while it’s the active part of the quarter. First, I identify any massive clusters of coordinated selling. When a group of insiders head for the exits at the same time, so should you. Such a bearish move often signals either tougher times ahead, or at least a fully valued stock.

Second, I like to see which stocks hold buying appeal for insiders. Please note that I don’t consider a decision to exercise stock options and then retain shares as a form of insider buying, as some insider trackers do. Also, I often (but not always) ignore the move of major outside shareholders, even though their purchases can often portend a bullish move in a stock. I look at these investors, and their buying moves, in a separate context from company insiders.

Here’s a look at four companies that have recently seen solid buying. (All data supplied by insiderinsights.com.)

Beazer Homes USA, Inc. (NYSE: BZH)
The U.S. housing market may be on the cusp of a breakout this year, thanks to the alignment of several virtuous factors. Meanwhile, sector share prices, in many instances, remain closer to their 52-week low than their 52-week high.

In search of value plays in the group, I noted that Beazer Homes, sports both a low forward multiple, and appears poised for a sustained rebound in profits. Perhaps taking note of that outlook, five separate insiders have acquired a collective $650,000 in stock over the past three weeks.  That buying comes on the heels of an even larger wave of insider buying last summer, when insiders bought more than $1 million in stock.

Fifth Street Finance Corp. (Nasdaq: FSC)
This business development company (BDC) recently committed a cardinal sin: It cut its dividend. New management has decided to adjust this firm’s approach to loans and investments, which will reduce near-term income streams. The new monthly dividend, which equates to $0.72 a share on an annualized basis, led investors to push this stock down by double-digits last week, despite the fact that new yield equates to a still-respectable 10%.

More importantly, the sell-off means that shares now trade for roughly 80% of tangible book value. That value marker may explain why Len Tannenbaum, a company director, just acquired $7.8 million in stock on the open market (at an average price of $6.80 a share). While shares trade so far below book, management ought to follow Tannenbaum’s lead and earmark any excess cash flow beyond what is needed for the dividend to support a share buyback program.

PennantPark Investment Corp. (Nasdaq: PNNT)
This is another BDC that has seen significant recent insider buying. Three insiders have bought a combined $530 million in shares over the past two weeks. They might be attracted to the fact that shares trade at a 15% discount to net asset value of $10.43 a share. Or they may be enticed by the current 12% dividend yield.

It’s fair to ask: Since this BDC has a fair amount of exposure to the oil and gas industry, is the current dividend sustainable? Analysts at MLV Capital, who rate shares a buy, think that “the dividend is secure given (the BDC’s ability) to grow balance sheet assets due to its untapped debt leverage potential.”

Carbo Ceramics, Inc. (NYSE: CRR)
Short sellers have been actively targeting energy services firms, clearly expecting a deepening set of industry carnage as long as energy prices remain near multi-year lows. This company, which makes ceramic proppants, used in oil and gas fracking is likely seen as a potential industry casualty. (Ceramic proppants keep a well open after it has been fracked.) The short interest surged 10% in just the two weeks ended January 30, to around 8.5 million shares. That represents more than 40% of the trading float.

The surging short position comes as shares have fallen from the 52-week high of $156 to a recent $40. The selloff followed management’s guidance of a $0.25-to-$0.35 earnings per share loss in 2015, down from a $3 a share profit in 2014. But such losses seem manageable for a company with $30 million in cash and no debt. Management underscored the company’s financial strength by recently initiating a two million share buyback (which would cut the share count by roughly 8%).

Carbo’s Chairman, William Morris, is also showing support, with a recent purchase of around $750,000 in company stock. You could consider this stock to be dead money in the near-term, unless you think the outlook for Carbo and others is not nearly as dire as the stock price suggests. Any rebound would be accompanied by short covering, which could help trigger a rally in shares long before fracking levels are again at a peak.

Risks To Consider: Insiders tend to be bad market timers, and their purchases don’t mean that shares have found support at current levels. It’s best to look at these buying actions as a long-term symbol of value and not a short-term trade.

Action To Take –> These insiders are buying in after shares have slumped badly. The BDCs, trading below book value and sporting impressive dividend yields, can be seen as the value play. Beazer Homes and Carbo Ceramics are positioned as long-term growers that have been experiencing recent industry headwinds.  

There’s a lot more to say about the benefits of BDCs in today’s market. That’s why my colleague Nathan Slaughter has put together a special research report called “Everything You Need To Know About BDCs.” In this report, you’ll learn the seven rules that will tell you exactly which BDCs to invest in, and which ones to avoid. You’ll also get access to the names and ticker symbols of every BDC that’s traded on the public market. To learn how to get this report for free, watch this presentation.