Editors' pick: Originally published Dec. 28.

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.

Six Flags Entertainment

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One general entertainment player that insiders are in love with here is Six Flags Entertainment (SIX) - Get Report , which owns and operates regional theme and water parks under the Six Flags brand name. Insiders are buying this stock into modest strength, since shares have risen by 6.1% over the last six months.

Six Flags Entertainment has a market cap of $5.5 billion and an enterprise value of $6.9 billion. This stock trades at a premium valuation, with a trailing price-to-earnings of 48.9 and a forward price-to-earnings of 31.8. Its estimated growth rate for this year is -20.9%, and for next year it's pegged at 51.2%. This is not a cash-rich company, since the total cash position on its balance sheet is $238.76 million and its total debt is $1.65 billion. This stock currently sports a dividend yield of 4.2%.

The CEO just bought 25,000 shares, or about $1.49 million worth of stock, at $59.93 per share.

From a technical perspective, Six Flags Entertainment 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 four months, with shares moving higher off its low of $47.08 a share to its intraday high on Wednesday of $60.58 a share. During that uptrend, shares of Six Flags Entertainment have been making mostly higher lows and higher highs, which is bullish technical price action.

If you're bullish on Six Flags Entertainment then I would look for long-biased trades as long as this stock is trending above its 20-day moving average of $59.03 a share or above its 50-day moving average of $56.28 a share and then once it breaks out above some key overhead resistance levels at $60.58 to $60.65 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 953,946 shares. If that breakout triggers soon, then this stock set up to re-test or possibly take out its next major overhead resistance level at $62.69 a share. Any high-volume move above $62.69 will then give this stock a chance to tag $65 to $70 a share.

DDR Corp.

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Another financial player that insiders are jumping into here is DDR (DDR) , which is an equity real estate investment trust. It invests in the real estate markets of the U.S. and Puerto Rico. Insiders are buying this stock into notable weakness, since shares have dropped by 17.4% over the last six months.

DDR Corp. has a market cap of $5.3 billion and an enterprise value of $10.9 billion. This stock trades at a premium valuation, with a trailing price-to-earnings of 57.3 and a forward price-to-earnings of 105. Its estimated growth rate for this year is 140.7%, and for next year it's pegged at 27.3%. This is barely a cash-rich company, since the total cash position on its balance sheet is $20.66 million and its total debt is $4.97 billion. This stock currently sports a dividend yield of 5.1%.

A director just bought 84,000 shares, or about $1.24 million worth of stock, at $14.83 to $14.89 per share.

From a technical perspective, DDR Corp. is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been consolidating and trending sideways over the last two months, with shares moving between $14.50 a share on the downside and $15.65 a share on the upside. Any high-volume move above the upper-end of its recent sideways trending chart pattern could trigger a big breakout trade for shares of DDR Corp.

If you're bullish on DDR Corp. then I would look for long-biased trades as long as this stock is trending above some near-term support levels at $14.52 to $14.50 a share and then once it breaks out above some near-term overhead resistance levels at its 50-day moving average of $15.15 a share and then above $15.38 to $15.65 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 3.15 million shares. If that breakout materializes soon, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at $16 to $16.50, or even its 200-day moving average of $16.89 a share to $17.75 a share.

Occidental Petroleum

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One energy player that insiders are active in here is Occidental Petroleum (OXY) - Get Report , which engages in the acquisition, exploration, and development of oil and gas properties in the U.S. and internationally. Insiders are buying this stock into modest weakness, since shares have fallen by 2.5% over the last six months.

Occidental Petroleum has a market cap of $55 billion and an enterprise value of $60 billion. This stock trades at a far valuation, with a forward price-to-earnings of 56. Its estimated growth rate for the next quarter is 142.9%, and for next year it's pegged at 248.3%. This is not a cash-rich company, since the total cash position on its balance sheet is $3.18 billion and its total debt is $8.33 billion. This stock currently sports a dividend yield of 4.2%.

A director just bought 10,000 shares, or about $721,000 worth of stock, at $72.15 per share.

From a technical perspective, Occidental Petroleum is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending over the last two months, with shares moving higher off its low of $63.68 a share to its recent high of $73.51 a share. During that uptrend, shares of Occidental Petroleum 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 near-term breakout trade.

If you're in the bull camp on Occidental Petroleum, then I would look for long-biased trades as long as this stock is trending above either its 20-day moving average of $71.24 a share or its 50-day moving average of $69.96 a share and then once it breaks out above some near-term overhead resistance levels at $72.50 to $73 a share and then above more resistance levels at $73.51 to $74.78 a share with volume that hits near or above its three-month average action of 5.31 million shares. If that breakout develops soon, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at $77.06 to its 52-week high of $78.48, or even $80 to $85 a share.

Amicus Therapeutics

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One biopharmaceutical player that insiders are jumping into 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 notable weakness, since shares have dropped by 10.5% over the last six months.

Amicus Therapeutics has a market cap of $690 million and an enterprise value of $553 million. This stock trades at a premium valuation, with a price-to-sales of 329.22 and a price-to-book of 2.08. Its estimated growth rate for this year is -18.5%, and for next year it's pegged at 21.3%. This is a cash-rich company, since the total cash position on its balance sheet is $212.40 million and its total debt is $66.02 million.

A beneficial owner just bought 85,275 shares, or about $410,000 worth of stock, at $4.72 to $4.92 per share.

From a technical perspective, Amicus Therapeutics is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been downtrending badly over the last two months, with shares falling sharply off its high of $9.61 a share to its recent low of $4.41 a share. During that downtrend, shares of Amicus Therapeutics have been consistently making lower highs and lower lows, which is bearish technical price action.

If you're bullish on Amicus Therapeutics, then I would look for long-biased trades as long as this stock is trending above its recent low of $4.41 a share and then once it breaks out above some near-term overhead resistance levels at $5.20 to its 20-day moving average of $5.42 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 2.97 million shares. If that breakout takes hold soon, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at $6 to $6.43, or even $6.75 a share. Any high-volume move above $6.75 will then give this stock a chance to re-fill its previous gap-down-day zone from November that started near $9 a share.

JAKKS Pacific

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My final stock with some decent insider buying is consumer goods player JAKKS Pacific (JAKK) - Get Report , which designs, develops, produces, and markets consumer products in the U.S., Canada, Hong Kong, Europe, and internationally. Insiders are buying this stock into big weakness, since shares have dropped sharply by 33.5% over the last six months.

JAKKS Pacific a market cap of $81 million and an enterprise value of $242 million. This stock trades at a fair valuation, with a forward price-to-earnings of 11.28. Its estimated growth rate for this year is -81.4%, and for next year it's pegged at 246.20%. This is not a cash-rich company, since the total cash position on its balance sheet is $45.47 million and its total debt is $207.93 million.

A beneficial owner just bought 161,667 shares, or about $796,000 worth of stock, at $4.89 to $5 per share.

From a technical perspective, JAKKS Pacific is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock recently gapped-down sharply from around $7 a share to under $4.75 a share with heavy downside volume flows. Following that move, shares of JAKKS Pacific have now started to rebound off its recent low of $4.63 a share and it's quickly trending within range of triggering a near-term breakout trade.

If you're bullish on JAKKS Pacific, then I would look for long-biased trades as long as this stock is trending above some near-term support levels at $4.75 to $4.63 a share and then once it breaks out above some near-term overhead resistance levels at $5.20 to $5.75 a share with volume that registers near or above its three-month average action of 267,164 shares. If that breakout fires off soon, then this stock will set up to re-fill some of its previous gap-down-day zone from earlier this month that started near $7 a share.

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