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 vs. 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.

TransDigm

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One industrial goods player that insiders are active in here is TransDigm (TDG) - Get Report , which designs, produces, and supplies aircraft components in the U.S. Insiders are buying this stock into notable weakness, since shares have dropped by 9.8% over the last three months.

TransDigm has a market cap of $13.5 billion and an enterprise value of $22 billion. This stock trades at a fair valuation, with a trailing price-to-earnings ratio of 24 and a forward price-to-earnings ratio of 18.7. Its estimated growth rate for this year is 5.7%, and for next year it's pegged at 12.4%. This is not a cash-rich company; the total cash position on its balance sheet is $1.59 billion, and its total debt is $10.28 billion.

A director just bought 91,978 shares, or about $22.73 million worth of stock, at $246.14 to $247.89 per share.

From a technical perspective, TransDigm is currently trending above its 200-day moving average and just below its 50-day moving average, which is neutral trendwise. This stock has been trending upward a bit over the last few weeks, with shares moving higher off the low of $244.36 a share to the recent high of $256.49 a share. During that uptrend, shares of TransDigm have been making mostly higher lows and higher highs, which is bullish technical price action. That uptrend has now pushed this stock within range of triggering a big breakout trade above some key overhead resistance levels.

If you're bullish on TransDigm, then I would look for long-biased trades as long as this stock is trending above some near-term support levels at $250 to $240 a share, and then once it breaks out above some near-term overhead resistance levels at $257.50 to its 50-day moving average of $259.01 a share and then above $261.83 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 561,797 shares.

If that breakout triggers soon, then this stock will set up to retest or possibly take out its next major overhead resistance levels at $272 to $275, or even $277 a share.

Recro Pharma

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A specialty pharmaceutical player that insiders are active in here is Recro Pharma(REPH) - Get Report , which develops non-opioid products for the treatment of acute pain. Insiders are buying this stock into notable weakness, since shares have dropped sharply by 21% over the last six months.

Recro Pharma has a market cap of $79 million and an enterprise value of $82 million. This stock trades at a fair valuation, with a price-to-sales ratio of 1.22 and a price-to-book ratio of 2.01. Its estimated growth rate for the next quarter is 57.7%, and for next year it's pegged at 1.7%. This is barely a cash-rich company; the total cash position on its balance sheet is $24.75 million and its total debt is $24.24 million.

A beneficial owner just bought 650,000 shares, or about $3.9 million worth of stock, at $6 per share.

From a technical perspective, Recro Pharma is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been downtrending over the last month, with shares falling sharply lower off its high of $10.17 a share to its recent low of $5.89 a share. During that downtrend, shares of Recro Pharma have been making mostly lower highs and lower lows, which is bearish technical price action.

If you're bullish on Recro Pharma, then I would look for long-biased trades as long as this stock is trending above its recent low of $5.89 a share, and then once it breaks out above some near-term overhead resistance levels at $7.11 to $7.50 a share, and then above its 200-day moving average of $7.84 to $8 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 200,500 shares.

If that breakout develops soon, then this stock will set up to retest or possibly take out its next major overhead resistance levels at $8.75 to $9.50, or even $10.17 to $10.85 a share.

Intrexon

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One health care player that insiders are jumping into here is Intrexon(XON) - Get Report , which operates in the synthetic biology field in the U.S. Insiders are buying this stock into notable strength, since shares have risen by 10.2% over the last six months.

Intrexon has a market cap of $3.3 billion and an enterprise value of $3.1 billion. This stock trades at a premium valuation, with a price-to-sales ratio of 17.88 and a price-to-book ratio of 5.54. Its estimated growth rate for this year is -88.2%, and for next year it's pegged at 48.3%. This is a cash-rich company, since the total cash position on its balance sheet is $236.55 million and its total debt is $8.97 million.

The CEO just bought 34,606 shares, or about $1 million worth of stock, at $28.90 per share.

From a technical perspective, Intrexon is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been downtrending over the last month or so, with shares falling off its high of $32.90 a share to its recent low of $27.59 a share. During that downtrend, shares of Intrexon have been making mostly lower highs and lower lows, which is bearish technical price action.

If you're in the bull camp on Intrexon, then I would look for long-biased trades as long as this stock is trending above some near-term support levels at $27.60 to $26.50 a share, and then once it breaks out above its 200-day moving average of $28.67 a share to $29.50, and then above its 20-day moving average of $29.85 a share with volume that hits near or above its three-month average action of 1.18 million shares.

If that breakout hits soon, then this stock will set up to retest or possibly take out its next major overhead resistance levels at $31 to $31.68, or even $32.90 a share.

Medtronic

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Another health care player that insiders are jumping into here is Medtronic(MDT) - Get Report , which manufactures and sells device-based medical therapies worldwide. Insiders are buying this stock into notable weakness, since shares have dropped by 12.9% over the last six months.

Medtronic has a market cap of $100 billion and an enterprise value of $121 billion. This stock trades at a fair valuation, with a trailing price-to-earnings ratio of 24.4 and a forward price-to-earnings ratio of 14.5. Its estimated growth rate for this year is 4.6%, and for next year it's pegged at 10.3%. This is not a cash-rich company, since the total cash position on its balance sheet is $11.26 billion and its total debt is $32.44 billion. This stock currently has a divided yield of 2.3%.

A director just bought 13,660 shares, or about $999,000 worth of stock, at $73.21 per share.

From a technical perspective, Medtronic is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock recently gapped down sharply lower from around $82 a share to $72 a share with heavy downside volume flows. Following that move, shares of Medtronic have started to rebound a bit off the low of $71.04, and it's now quickly trending within range of triggering a big breakout trade above some key overhead resistance levels.

If you're bullish on Medtronic, then I would look for long-biased trades as long as this stock is trending above some near-term support levels at $72 to $71 a share, and then once it breaks out above some near-term overhead resistance levels at $74.31 to its 20-day moving average of $74.38 a share, and then above more key resistance at $76.44 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 5.92 million shares.

If that breakout takes hold soon, then this stock will set up to refill some of its previous gap-down-day zone from November that started near $82 a share.

Medicines

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My final stock with some large insider buying is health care player Medicines(MDCO) - Get Report , which provides medicines for patients in acute and intensive care hospitals worldwide. Insiders are buying this stock into modest weakness, since shares have fallen by 4.1% over the last three months.

Medicines has a market cap of $2.5 billion and an enterprise value of $2.6 billion. This stock trades at a premium valuation, with a price-to-sales ratio of 12.26 and a price-to-book ratio of 3.38. Its estimated growth rate for this year is 73.7%, and for next year it's pegged at -237.4%. This is not a cash-rich company, since the total cash position on its balance sheet is $600.36 million and its total debt is $670.54 million.

A vice president just bought 105,500 shares, or about $3.50 million worth of stock, at $32.52 per share.

From a technical perspective, Medicines is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending over the last few weeks, with shares moving higher off the low of $31.92 a share to its recent high of $36.94 a share. During that uptrend, shares of Medicines have been making mostly higher lows and higher highs, which is bullish technical price action.

If you're bullish on Medicines, then I would look for long-biased trades as long as this stock is trending above its 50-day moving average of $35.36 a share, or above more near-term support at $34 a share, and then once it breaks out, above some near-term overhead resistance levels at $36.94 to $38 a share with volume that registers near or above its three-month average action of 1.37 million shares.

If that breakout fires off soon, then this stock will set up to retest or possibly take out its next major overhead resistance levels at $41.07 to its 52-week high of $41.79, or even $43 to $44 a share.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.