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If insider behavior is any guide, investors might be well-advised to take a cautious approach to stocks now.

In the past month or so, corporate chiefs have pretty much had a hands-off approach to equities, waiting to see what will happen before making any drastic moves. Although the proportion of selling to buying has increased, insider trading activity as a whole has been reduced to a trickle on both sides. Analysts say this shows executives are unsure about where stocks are going.

But not all is gloom. A few bright spots can still be found in the market, with buying interest among insiders indicating a handful of stocks are still cheap and have upside potential.

The defense and railroad industries are among the sectors that have seen more positive insider activity lately. "Rather than buying Treasury bills, insiders are buying their own stock, and this is giving me hope," said Painchaud. He also noted prices in the sector have had a tendency to fall recently, which could lead to more buying interest in the near future. A few names in the industry include Northrop Grumman (NOC:NYSE) and Raytheon (RTN:NYSE), according to Painchaud.
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