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DELAFIELD, Wis. (Stockpickr) -- Corporate insiders sell their own companies' stock for a number of reasons.

They might need the cash for a big personal purchase such as a new house or yacht, or they might need the cash to fund a charity. Sometimes they sell as part of a planned selling program that they have put in place for diversification purposes, which allows them to sell stock in stages instead of selling all at one price.

Other times they sell because they think their stock is overvalued and the risk/reward is no longer attractive. Some even dump their own stock because they have inside knowledge that a competitor is eating their lunch and stealing market share.

But insiders usually buy their own shares for one reason: They think the stock is a bargain and has tremendous upside.

The key word in that last statement is "think." Just because a corporate insider thinks his or her stock is going to trade higher, that doesn't mean it will play out that way. Insiders can have all the conviction in the world that their stock is a buy, but if the market doesn't agree with them, the stock could end up going nowhere. Also, I say "usually" because sometimes insiders are loaned money by the company to buy their own stock. Those loans are often sweetheart deals and shouldn't be viewed as organic insider buying.

At the end of the day, it's institutional money managers running big mutual funds and hedge funds that drive stock prices, not insiders. That said, many of these savvy stock operators will follow insider buying activity when they agree with the insider that the stock is undervalued and has upside potential. This is why it's so important to always be monitoring insider activity but twice as important to make sure the trend of the stock coincides with the insider buying.

Recently, a number of companies' corporate insiders have bought large amounts of stock. These insiders are finding some value in the market, which warrants a closer look at these stocks.

Seattle Genetics

One biotechnology player that insiders are loading up on a huge amount of stock here is Seattle Genetics (SGEN) - Get Seagen, Inc. Report , which develops and commercializes antibody-based therapies for the treatment of cancer. Insiders are buying this stock into notable weakness, since shares have fallen by 21% in 2014.

Seattle Genetics has a market cap of $3.8 billion and an enterprise value of $3.8 billion. This stock trades at a fair valuation, with a price-to-sales of 14.45 and a price-to-book of 17.96. Its estimated growth rate for this year is -29.4%, and for next year it's pegged at 15.2%. This is a cash-rich company, since the total cash position on its balance sheet is $339.56 million and its total debt is zero.

A director just bought 2,883,378 shares, or about $91.85 million worth of stock, at $30.80 to $31.97 per share.

From a technical perspective, SGEN is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been downtrending over the last few weeks, with shares falling from its high of $40.35 to its recent low of $30.50 a share. During that downtrend, shares of SGEN have been making mostly lower highs and lower lows, which is bearish technical price action.

If you're bullish on SGEN, then I would look for long-biased trades as long as this stock is trending above its 52-week low at $30.50 a share and then once it breaks out above some near-term overhead resistance levels at $33.94 a share to its 50-day moving average of $35.26 a share with high volume. Look for a sustained move or close above those levels with volume that registers near or above its three-month average action of 1.36 million shares. If that breakout gets set off soon, then SGEN will set up to re-test or possibly take out its next major overhead resistance levels $38 to its 200-day moving average at $38.30 a share, or even $40 to $41 a share.

Platform Specialty Products

Another basic materials player that insiders are loading up on here is Platform Specialty Products (PAH) - Get Element Solutions, Inc. Report , which develops, produces, and markets a range of specialty chemical and printing products in the Americas, Asia, and Europe. Insiders are buying this stock into major strength, since shares have traded up 54% in 2014.

Platform Specialty Products has a market cap of $3.8 billion and an enterprise value of $4.2 billion. This stock trades at a reasonable valuation, with a forward price-to-earnings of 17.8. Its estimated growth rate for this year is 5.9%, and for next year it's pegged at 79.2%. This is not a cash-rich company, since the total cash position on its balance sheet is $281.68 million and its total debt is $746.38 million.

TheStreet Recommends

A director just bought 250,000 shares, or $5.30 million worth of stock, at $21.07 per share.

From a technical perspective, PAH is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been uptrending a bit over the last few weeks, with shares moving higher from its low of $20.76 to its intraday high on Tuesday of $23.71 a share. During that uptrend, shares of PAH have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of PAH within range of triggering a near-term breakout trade above some key overhead resistance levels.

If you're in the bull camp on PAH, then I would look for long-biased trades as long as this stock is trending above some near-term support levels at $22 or at $20.76 a share and then once it breaks out above both its 200-day moving average at $24.48 and its 50-day moving average at $24.66 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 800,116 shares. If that breakout develops soon, then PAH will set up to re-test or possibly take out its next major overhead resistance levels at $26.67 to $26.85 a share, or even its 52-week high at $28.95 a share.

HD Supply

On industrial products player that insiders are active in here is HD Supply (HDS) - Get HD Supply Holdings, Inc. Report , which operates as an industrial distribution company in North America. Insiders are buying this stock into strength, since shares have trended higher by 23% in 2014.

HD Supply has a market cap of $5.7 billion and an enterprise value of $10.7 billion. This stock trades at a fair valuation, with a trailing price-to-earnings of 191 and a forward price-to-earnings of 14.42. Its estimated growth rate for this year is 175.6%, and for next year it's pegged at 66.1%. This is not a cash-rich company, since the total cash position on its balance sheet is $107 million and its total debt is $5.51 billion.

A director just bought 35,350, or about $997,000 worth of stock, at $28.23 per share.

From a technical perspective, HDS is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending strong for the last three months, with shares moving higher from its low of $22.18 to its recent high of $30.46 a share. During that uptrend, shares of HDS have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of HDS within range of triggering a near-term breakout trade.

If you're bullish on HDS, then I would look for long-biased trades as long as this stock is trending above its 50-day moving average of $28.16 or above its 200-day moving average of $27.04 a share and then once it breaks out above its all-time high of $30.46 a share with high volume. Look for a sustained move or close above that level with volume that hits near or above its three-month average action of 1.79 million shares. If that breakout materializes soon, then HDS will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $40 to $50 a share.

Global Partners

One energy player that insiders are in love with here is Global Partners (GLP) - Get Global Partners LP Report , which distributes gasoline, distillates, residual oil, renewable fuels, crude oil, natural gas, and propane to wholesalers, retailers, and commercial customers in the New England states and New York. Insiders are buying this stock into notable weakness, since shares have dropped by 16.6% over the last three months.

Global Partners has a market cap of $952 million and an enterprise value of $1.7 billion. This stock trades at a fair valuation, with a trailing price-to-earnings of 8.3 and a forward price-to-earnings of 13.6. Its estimated growth rate for this year is 144.4%, and for next year it's pegged at -25.7%. This is not a cash-rich company, since the total cash position on its balance sheet is $5.55 million and its total debt is $853.24 million. This stock currently sports a dividend yield of 7.8%.

A beneficial owner just bought 160,000 shares, or about $5.57 million worth of stock, at $34.84 per share.

From a technical perspective, GLP is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been uptrending over the last few weeks, with shares moving higher from its low of $30.45 to its recent high of $36.59 a share. During that uptrend, shares of GLP have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of GLP within range of triggering a near-term breakout trade above some key overhead resistance levels.

If you're bullish on GLP, then I would look for long-biased trades as long as this stock is trending above some near-term support at $32 a share and then once it breaks out above some near-term overhead resistance at $36.59 a share with high volume. Look for a sustained move or close above that level with volume that hits near or above its three-month average action of 119,072 shares. If that breakout develops soon, then GLP will set up to re-test or possibly take out its next major overhead resistance levels at its 50-day moving average of $39.18 to its 200-day moving average at $39.23 a share. Any high-volume move above those levels will then give GLP a chance to tag $42 to $43 a share.

SJW

One final stock with some decent insider buying is SJW (SJW) - Get SJW Group Report , which operates as a water utility company. Insiders are buying this stock into notable strength, since shares have traded higher by 21% in over the last three months.

SJW has a market cap of $650 million and an enterprise value of $997 million. This stock trades at a reasonable valuation, with a trailing price-to-earnings of 12.8 and a forward price-to-earnings of 16.5. Its estimated growth rate for this year is 125%, and for next year it's pegged at -23%. This is not a cash-rich company, since the total cash position on its balance sheet is $5.60 million and its total debt is $393.34 million. This stock currently sports a dividend yield of 2.5%.

A director just bought 15,450 shares, or about $496,000 worth of stock, at $31.97 to $32.16 per share. From a technical perspective, SJW is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending strong over the last six months, with shares moving higher from its low of $25.24 to its recent high of $32.98 a share. During that uptrend, shares of SJW have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of SJW within range of triggering a near-term breakout trade above some key overhead resistance levels.

If you're bullish on SJW, then I would look for long-biased trades as long as this stock is trending above its 50-day at $30.23 or above more key near-term support levels at $29.61 to $29 a share and then once it breaks out above its 52-week high at $32.98 a share with high volume. Look for a sustained move or close above that level with volume that registers near or above its three-month average volume of 55,327 shares. If that breakout kicks off soon, then SJW will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $40 to $45 a share.

-- Written by Roberto Pedone in Delafield, Wis.

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At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Delafield, Wis., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.

Roberto Pedone, based out of Delafield, Wis., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including

CNBC.com

and

Forbes.com

. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.