5 Stocks With Big Insider Buying: Hertz Global and More - TheStreet

DELAFIELD, Wis. (Stockpickr) -- Corporate insiders sell their own stocks 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.

Hertz Global

One rental and leasing services player that insiders are jumping into here is Hertz Global (HTZ) - Get Report , which is engaged in the car and equipment rental businesses worldwide. Insiders are buying this stock into notable weakness, since shares are off by 11% so far in 2014.

Hertz Global has a market cap of $11.3 billion and an enterprise value of $26.64 billion. This stock trades at a reasonable valuation, with a trailing price-to-earnings of 33 and a forward price-to-earnings of 18.4. Its estimated growth rate for this year is -35.6%, and for next year it's pegged at 30.5%. This is not a cash-rich company, since the total cash position on its balance sheet is $583.30 million and its total debt is $16.32 billion.

The CEO just bought 84,200 shares, or about $2.03 million worth of stock, at $6.53 to $24.11 per share.

From a technical perspective, HTZ 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 two months, with shares moving higher from its low of $18.50 to its intraday high of $25.30 a share. During that uptrend, shares of HTZ have been making mostly higher lows and higher highs, which is bullish technical price action.

If you're bullish on HTZ, then I would look for long-biased trades as long as this stock is trending above its 50-day at $22.98 a share and then once it breaks out above its 200-day moving average at $26.80 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 11.31 million shares. If that breakout hits soon, then HTZ will set up to re-test or possibly take out its next major overhead resistance levels $29.87 to its 52-week high at $31.61 a share.

J.C. Penney

Another department store player that insiders are active in here is J.C. Penney (JCP) - Get Report , which sells merchandise through department stores in the U.S. Insiders are buying this stock into big weakness, since shares have dropped sharply over the last three months by 26%.

J.C. Penney has a market cap of $2.4 billion and an enterprise value of $7.1 billion. This stock trades at a reasonable valuation, with a price-to-sales of 0.20 and a price-to-book of 0.98. Its estimated growth rate for this year is 57.9%, and for next year it's pegged at 44%. This is a cash-rich company, since the total cash position on its balance sheet is $684 million and its total debt is $5.43 billion.

A director just bought 100,000 shares, or $728,000 worth of stock, at $7.28 per share.

From a technical perspective, JCP is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock recently flirted with a breakout trade, after shares tested some near-term overhead resistance levels at $7.84 to $7.87 a share. Shares of JCP are now starting to move within range of triggering another big breakout trade.

If you're in the bull camp on JCP, then I would look for long-biased trades as long as this stock is trending above some near-term support at $7.50 or above more support at $7.18 a share and then once it breaks out above its 50-day at $8.22 and its 200-day at $8.66 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 19.23 million shares. If that breakout begins soon, then JCP will set up to re-test or possibly take out its next major overhead resistance levels at $9.50 to $10.20 a share.

C&J Energy Services

One energy equipment and services player that insiders are loading up on here is C&J Energy Services (CJES) , which provides hydraulic fracturing, coiled tubing, wireline, and other complementary services to oil and gas exploration and production companies in the U.S. Insiders are buying this stock into major weakness, since shares have plunged by 32% over the last three months.

C&J Energy Services has a market cap of $1 billion and an enterprise value of $1.3 billion. This stock trades at a reasonable valuation, with a trailing price-to-earnings of 20 and a forward price-to-earnings of 10.6. Its estimated growth rate for this year is 13.1%, and for next year it's pegged at 31.2%. This is not a cash-rich company, since the total cash position on its balance sheet is $20.30 million and its total debt is $345.85 million.

A director just bought 576,997 shares, or about $10.42 million worth of stock, at $17.82 per share.

From a technical perspective, CJES is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been attempting to carve out a bottom over the last month, with shares finding buying interest each time it's pulled back to around $17.60 to $16.60 a share. Shares of CJES have now started to bounce off those support levels and it's quickly approaching a near-term breakout trade.

If you're bullish on CJES, then I would look for long-biased trades as long as this stock is trending above some key near-term support levels at $17.68 or at $16.66 a share and then once it breaks out above some near-term overhead resistance levels at $20.49 to $21.66 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 1.66 million shares. If that breakout materializes soon, then CJES will set up to re-test or possibly take out its next major overhead resistance levels at its 50-day moving average of $22.20 to $25 a share.

Amicus Therapeutics

One biotechnology player that insiders are snapping up a huge amount of stock in here is Amicus Therapeutics (FOLD) - Get Report , which focuses on the discovery, development, and commercialization of medicines for various rare and orphan diseases. Insiders are buying this stock into massive strength, since shares have soared by 238% so far in 2014.

Amicus Therapeutics has a market cap of 630 million and an enterprise value of $538 million. This stock trades at a premium valuation, with a price-to-sales of 393.53 and a price-to-book of 14.07. Its estimated growth rate for this year is 25%, and for next year it's pegged at 1.10%. This is a cash-rich company, since the total cash position on its balance sheet is $85.18 million and its total debt is $14.30 million.

A beneficial owner just bought 2,100,000 shares, or about $13.65 million worth of stock, at $6.50 per share.

From a technical perspective, FOLD 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 two months, with shares moving higher from its low of $5.13 to its intraday high of $8 a share. During that uptrend, shares of FOLD have been making mostly higher lows and higher highs, which is bullish technical price action. Shares of FOLD recently broke out to a new 52-week high at $8 a share.

If you're bullish on FOLD, then I would look for long-biased trades as long as this stock is trending above some key near-term support levels at $7 a share or at its 50-day of $6.18 a share and then once it breaks out above its new 52-week high at $8 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 2.01 million shares. If that breakout develops soon, then FPOLD will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $9 to $10 a share.

STAAR Surgical

One final stock with some large insider buying is STAAR Surgical (STAA) - Get Report , which designs, develops, manufactures, and sells implantable lenses for the eye, and delivery systems to deliver lenses into the eye. Insiders are buying this stock into massive weakness, since shares have traded sharply lower by 41% so far in 2014.

STAAR Surgical has a market cap of $364 million and an enterprise value of $360 million. This stock trades at a premium valuation, with a forward price-to-earnings of 78.50. Its estimated growth rate for this year is -1,600%, and for next year it's pegged at 180%. This is a cash-rich company, since the total cash position on its balance sheet is $18.36 million and its total debt is $5.56 million.

A beneficial owner just bought 189,646 shares, or about $1.63 million worth of stock, at $8.63 to $8.67 per share. From a technical perspective, STAA is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been uptrending a bit for the last few weeks, with shares moving higher from its new 52-week low of $8.52 to its intraday high of $9.95 a share. During that uptrend, shares of STAA have been making mostly higher lows and higher highs, which is bullish technical price action.

If you're bullish on STAA, then I would look for long-biased trades as long as this stock is trending above its new 52-week low of $8.52 a share and then once it breaks out above Tuesday's intraday high of $9.95 to its 50-day at $10.25 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 236,575 shares. If that breakout gets underway soon, then STAA will set up to re-test or possibly take out its next major overhead resistance levels at $11.19 to $11.60 a share, or even $11.85 to $12 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.

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.