5 Stocks Insiders Love Right Now - TheStreet

 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. Here's a look five stocks whose insiders have been doing some big buying per SEC filings.

Agco

One industrial goods player that insiders are loading up on here is Agco (AGCO) - Get Report , which manufactures and distributes agricultural equipment and related replacement parts worldwide. Insiders are buying this stock into major weakness, since shares are down by 24% so far in 2014.

Agco has a market cap of $4.1 billion and an enterprise value of $5.1 billion. This stock trades at a premium valuation, with a trailing price-to-earnings of 8.1 and a forward price-to-earnings of 12.7. Its estimated growth rate for this year is -30.8%, and for next year it's pegged at -15.9%. This is not a cash-rich company, since the total cash position on its balance sheet is $323.30 million and its total debt is $1.23 billion. This stock currently sports a dividend yield of 1%.

A director just bought 60,000 shares, or about $2.70 million worth of stock, at $45.05 per share. That same director also just bought 75,000 shares, or about $3.33 million worth of stock, at $44.40 to $45.19 per share.

From a technical perspective, AGCO is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock recently formed a double bottom chart pattern at $41.63 to $42.44 a share. Following that bottom, shares of AGCO have now started to uptrend a bit and are beginning to move within range of triggering a near-term breakout trade above some key overhead resistance levels.

If you're bullish on AGCO, then I would look for long-biased trades as long as this stock is trending above those double bottom support levels and then once it breaks out above its 50-day moving average of $46.04 a share to some more near-term overhead resistance levels at $46.13 to $47.37 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 1.58 million shares. If that breakout triggers soon, then AGCO will set up to re-test or possibly take out its next major overhead resistance levels $48 to $49.66 a share, or even its 200-day moving average of $51.52 a share.

Jones Energy

Another independent energy player that insiders are active in here is Jones Energy (JONE) , which is engaged in the acquisition, exploration, development, and production of oil and natural gas properties in the mid-continent region of the U.S. Insiders are buying this stock into major weakness, since shares have plunged 36% so far in 2014.

Jones Energy has a market cap of $152 million and an enterprise value of $868 million. This stock trades at a cheap valuation, with a forward price-to-earnings of 9. Its estimated growth rate for this year is 286.2%, and for next year it's pegged at 18.8%. This is not a cash-rich company, since the total cash position on its balance sheet is $31.79 million and its total debt is $750 million.

The CEO just bought 88,495 shares, or around $1.09 million worth of stock, at $12.24 per share. The CFO also just bought 36,578 shares, or around $456,000 worth of stock, at $12.47 per share.

From a technical perspective, JONE is currently trending well below both its 50-day and 200-day moving averages, which is bearish. This stock has been downtrending badly for the last two months, with shares dropping from its high of $19.14 to its new 52-week low of $10.55 a share. During that downtrend, shares of JONE have been making mostly lower highs and lower lows, which is bearish technical price action. That said, shares of JONE have now started to rebound off its 52-week low of $10.55 and it's beginning to move within range of triggering a near-term breakout trade.

If you're in the bull camp on JONE, then I would look for long-biased trades as long as this stock is trending above its new 52-week low of $10.55 a share and then once it breaks out above some key near-term overhead resistance levels at $13 to $13.50 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 154,805 shares. If that breakout hits soon, then JONE will set up to re-test or possibly take out its next major overhead resistance levels at $15 to its 50-day moving average of $16.53 a share.

Schlumberger

One oil and gas equipment and services player that insiders are active in here is Schlumberger (SLB) - Get Report , which supplies technology, integrated project management and information solutions to oil and gas exploration and production industries worldwide. Insiders are buying this stock into notable weakness, since shares have slid lower by 12% over the last three months.

Schlumberger has a market cap of $125.6 billion and an enterprise value of $131.4 billion. This stock trades at a reasonable valuation, with a trailing price-to-earnings of 18.8 and a forward price-to-earnings of 15.3. Its estimated growth rate for this year is 18.3%, and for next year it's pegged at 13.5%. This is not a cash-rich company, since the total cash position on its balance sheet is $6.76 billion and its total debt is $13.09 billion. This stock currently sports a dividend yield of 1.6%.

A director just bought 3,250 shares, or about $300,000 worth of stock, at $92.59 per share.

From a technical perspective, SLB is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has formed a V-shaped bottom over the last few weeks, with shares rebounding off its low of $86 to its intraday high of $98.65 a share. That bounce is now pushing shares of SLB within range of triggering a near-term breakout trade above some key overhead resistance levels.

If you're bullish on SLB, then I would look for long-biased trades as long as this stock is trending above some near-term support at $92.45 a share and then once it breaks out above some key overhead resistance levels at $100.18 a share and then above its 2000-day at $100.51 and its 50-day at $101.28 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 volume of 7.54 million shares. If that breakout materializes soon, then SLB will set up to re-test or possibly take out its next major overhead resistance levels at $104.38 to $105.85, or even $107 to $110 a share.

Opko Health

One biopharmaceutical player that insiders are jumping into here is Opko Health (OPK) - Get Report , which is engaged in the discovery, development and commercialization of novel and proprietary technologies. Insiders are buying this stock into modest weakness, since shares have fallen by 7% over the last three months.

Opko Health has a market cap of $3.6 billion and an enterprise value of $3.6 billion. This stock trades at a premium valuation, with a price-to-sales of 41.66 and a price-to-book of 3.93. Its estimated growth rate for this year is 3.1%, and for next year it's pegged at 9.7%. This is just barely a cash-rich company, since the total cash position on its balance sheet is $134.01 million and its total debt is $133.71 million.

The CEO just bought 40,000 shares, or about $336,000 worth of stock, at $8.37 to $8.43 per share. That same CEO also just bough 64,000 shares, or about $532,000 worth of stock, at $8.20 to $8.25 per share.

From a technical perspective, OPK is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has found buying interest over the last six months, each time it has pulled back to right around $8 a share. Shares of OPK are now starting to trend higher off its recent test of $8 and it's beginning to move within range of triggering a near-term breakout trade.

If you're bullish on OPK, then I would look for long-biased trades as long as this stock is trending above major support at around $8 a share and then once it breaks out above some key near-term overhead resistance levels at $8.57 to $8.69 a share and then above its 200-day moving average of $8.73 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 2.22 million shares. If that breakout begins soon, then OPK will set up to re-test or possibly take out its next major overhead resistance levels at $9.20 to $9.62 a share, or even $9.83 to $10.25 a share.

Sears Holdings

One final stock with some large insider buying is Sears Holdings (SHLD) , which operates as a retailer in the U.S. and Canada. Insiders are buying this stock into major weakness, since shares traded down big so far in 2014 by 24%.

Sears Holdings has a market cap of $3.9 billion and an enterprise value of $7.6 billion. This stock trades at a reasonable valuation, with a price-to-sales of 0.11 and a price-to-book of 7.75. Its estimated growth rate for this year is -63.9%, and for next year it's pegged at 6.1%. This is not a cash-rich company, since the total cash position on its balance sheet is $829 million and its total debt is a whopping $4.30 billion.

A beneficial owner just bought 259,100 shares, or about $9.08 million worth of stock, at $34.74 to $36 per share.

From a technical perspective, SHLD 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 few weeks, with shares moving higher from its low of $24.62 to its recent high of $40.78 a share. During that uptrend, shares of SHLD have been making mostly higher lows and higher highs, which is bullish technical price action. That move now has SHLD trending within range of triggering a big breakout trade.

If you're bullish on SHLD, then I would look for long-biased trades as long as this stock is trending above its 200-day moving average of $35.08 or above more near-term support at $34 and then once it breaks out above some key overhead resistance levels at $40.78 to $42.48 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 volume of 1.40 million shares. If that breakout develops soon, then SHLD will set up to re-test or possibly take out its next major overhead resistance levels at $45.81 to around $52 a share.

To see more stocks with notable insider buying, check out the Stocks With Big Insider Buying portfolio on Stockpickr.

-- 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.