Studies suggest that multiple insider purchases within a three-month period often signal big gains to come. The biggest returns were found after insiders purchased shares of stock at historically low valuations. This isn't surprising considering insiders sell for a variety of reasons, but buy for only one: to make money.

GuruFocus has insider tracking tools that let you follow CEO and CFO purchases, as well as clustered and repeat purchases. This month, two companies caught my eye, with their respective CEOs buying shares worth as much as $10 million. One of the companies is controversial, while the other looks downright cheap.

General Electric Co. (NYSE:GE)

GE stock has been a dog for more than 15 years. Despite several brief turnarounds, investors have lost 74% of their investment since 2005. As if more than a decade of value destruction couldn't get any worse, the company's stock nosedived in 2017 and 2018 as it struggled with losses in its Power segment as well as troubling exposure in its Capital segment.

Now trading at 1995-level prices, opinions on the company's future are staunchly split. On Aug. 15, Harry Markopolos -- the man who uncovered the Bernie Madoff ponzi scheme -- took aim at GE. He claimed that the company's cash situation is far worse than the public knows, and it will need to boost insurance reserves to compensate. In total, the accounting problems could cost up to $38 billion to fix -- that's more than half of GE's current value.

Unsurprisingly, Markopolos is working with an undisclosed hedge fund to profit from his prognostication. This pushed CEO Larry Culp to call Markopolos' report "market manipulation." Culp bought roughly 250,000 shares for of $2 million to demonstrate his confidence.

The sell-side also came to the company's defense. William Blair called the Markopolos report "at best disingenuous and at worst highly inaccurate." Citigroup (NYSE:C) cited "sufficient shortcomings" in the report. Even Citron's Andrew Left said the "sheriff mentality is disingenuous and does not pass the smell test."

It's a tough call, but there's a lot of money betting on both sides of the equation.

Capri Holdings Ltd. (NYSE:CPRI)

With a diminutive $4.2 billion market cap, Capri isn't a well-known company. That didn't stop CEO John Idol from buying $10 million worth of shares at market prices on Aug. 15. He purchased 363,000 shares, pushing his total stake to around 3 million shares worth roughly $84 million.

Capri is a multi-national fashion holding company with offices in London and New York. You've likely heard of some of its brands, including Michael Kors, Versace and Jimmy Choo. Top-line results look fine. Over the last five years, revenues have grown by roughly 8% annually. The problem has been profitability. The company earned an $881 million profit in 2015. By 2018, it earned just $543 million.

Keep in mind, however, that the company still does remain highly profitable. The trouble has been out-of-control operating expenses. Still, even with depressed profitability, the company trades at just six times 2020 earnings and a rock-bottom five times 2021 earnings. That's probably what pushed Idol to purchase $10 million in shares. If management hits their guidance, shares could double within three years. That's a bet that Idol seems willing to make.

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