All across the country, many companies held board meetings to review the plans and expectations for the year ahead. More than a few board discussions likely revolved around the disconnect between a brightening outlook and an undervalued share price. Some of those board attendees then picked up the phone to call their broker, making insider purchases that should pay off in the year ahead.

#-ad_banner-#To be sure, insiders have been especially active in the energy sector, seeking to take advantage of deep share price pullbacks. Of course these insiders don’t have a crystal ball, and can’t be sure that oil prices won’t fall yet further. So it’s best to hold off following the lead of insiders in this group right now.

Any area that is always a fertile source of insider action is value stocks. Here are three companies that are either trading below book value, or sporting great dividend yields, that recently caught my eye. (All data supplied by insiderinsights.com)

Endurance Specialty Holdings Ltd. (NYSE: ENH)  
In mid-December, I noted that this re-insurer was unsuccessful in its efforts to acquire rival Aspen Insurance Holdings (NYSE: AHL). On November 3, when the company held its Q3 conference call, management said that Endurance spent $20 million in that ill-fated pursuit. Outside of that outsized expense, management made no other comments about Aspen or any other firm it may seek to acquire as the industry consolidates.

A few days later, Chairman and CEO John Charman gave a hint of his new favorite target: His own company’s stock.  That’s when he acquired roughly $400,000 in shares of ENH on the open market. In December, his insider buying action really heated up. This past month, he spent more than $10 million acquiring additional company stock, making him the single-largest purchaser by any officer or director in recent months.

Charman is likely to reap significant long-term income streams. That’s because Endurance has been steadily boosting its dividend, which recently stood at $1.34 a share. Though the current dividend yield stands at just 2.3%, Endurance routinely earns $5-to-$6 a year. In effect, the company appears poised to boost that dividend at a solid pace and still retain a low payout ratio. Endurance is also in the midst of a five million share buyback program, which is quite logical when you consider that shares trade for less than tangible book value.

Compass Diversified Holdings (NYSE: CODI)
This company operates a very unusual business model: It buys small and mid-sized businesses (at presumably attractive prices), fixes them up and then either turns them into cash cows, or eventually sells them (at a presumably tidy profit). Profits from asset sales go on to underpin the company’s dividend, which currently yields 8.5%. Consider this stat: Since CODI went public in 2006, it has returned more than $11 per share to investors.

When CODI decides to retain an acquired business, rather than flip it back at a profit, it is usually because the acquisition bolsters an existing area of focus, what the company calls “platforms.” Those platforms include printed circuit boards, upholstered furniture, environmental remediation services and six others. They all share little in common except that each platform tends to throw off solid cash flow. That should help the current juicy stock yield stay in place.

That yield is actually up a few ticks, thanks to a roughly 10% drop in the stock over the past few months. In response to the pullback, a pair of insiders acquired a combined $1.35 million stock over the past three weeks. In fact, insiders have been buying since May 2014, and in that time, haven’t sold a single share.

Prospect Capital Corp. (Nasdaq: PSEC)
In August 2014, my colleague Andy Obermueller took a fresh look at business development companies (BDCs) and this company was at the top of his list, in terms of dividend yields. Back then, PSEC was yielding 12.4%.

Since then, the BDC has issued stock (at below market prices) and announced plans in early November to spin off some assets into a new firm that will not be structured as a BDC. Prior to any spin-off, the trailing yield stands at 12.8%. In response, some BDC-focused shareholders have sold their positions and shares trade near the 52-week low.

Notably, insiders were heavy buyers of company stock well before those plans were announced, and since the November announcement, four separate insiders have bought a combined $6 million in stock. In fact, insiders haven’t sold a single share in the past 18 months. Clearly, these insiders see a lot more value in these shares than investors do. The proof will be in the pudding when spin-off details are spelled out this winter, but the aggressive insider buying is clearly a bullish signal.

If you are seeking out other stocks with recent heavy insider buying, candidates include:

—    Encore Wire (WIRE)
—    Fox Factory Holdings (FOXF)
—    Solar Capital (SLRC)
—    Freeport-McMoran (FCX)
—    Millennial Media (MM)
—    Medley Capital (MCC)
—    Crocs (CROX)
—    Nuverra Environmental Solutions (NES)
—    Crown Castle (CCI)
—    Valeant Pharma (VRX)
—    MRC Global (MRC)
—    Avid Technology (AVID)
—    H&E Equipment (HEES)
—    Titan Int’l (TWI)

Risks To Consider: Insiders are notoriously lousy market timers, so it’s best to follow their moves with a time horizon of at least six-to-nine months.

Action To Take –> Insiders are quick to spot unwarranted sell-offs, even faster than the analysts that typically cover their companies. At these three firms, they are actually taking little risk, as their companies possess a robust set of assets that underpin solid dividends and buybacks. They’ve collectively concluded that their own firms represent the best use for their spare cash for the year ahead.

These companies are experiencing some trouble, thus their poor share price, but how about some companies on a strong path toward lucrative gains? Look no further than Total Yield. Since 1982, these dividend payers returned an average of 15% per year. Last year, this group of stocks more than doubled the S&P 500’s return. To learn more about the Total Yield strategy, click here.