DELAFIELD, Wis. (Stockpickr) -- Corporate insiders may 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 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.

Radius Health

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One biopharmaceutical player that insiders are snapping up a large amount of stock in is Radius Health (RDUS) - Get Report, which focuses on developing therapeutics for patients with osteoporosis and other serious endocrine-mediated diseases. Insiders are buying this stock into massive strength, since shares have exploded to the upside by 98.7%.

Radius Health has a market cap of $3 billion and an enterprise value of $2.6 billion. This stock trades at a premium valuation, with a price-to-book of 13.50. Its estimated growth rate for this year is 47.5%, and for next year it's pegged at 34%. This is a cash-rich company, since the total cash position on its balance sheet is $234.17 million and its total debt is $24.46 million.

A beneficial owner just bought 250,000 shares, or about $18.50 million worth of stock, at $74.00 per share.

From a technical perspective, Radius Health is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been downtrending a bit over the last few weeks, with shares falling from its high of $84.64 to its recent low of around $70 a share. During that move, shares of Radius Health have been making mostly lower highs and lower lows, which is bearish technical price action. This stock has also started to trend back below its 20-day moving average of $73.55 a share.

If you're bullish on Radius Health, I would look for long-biased trades as long as this stock is trending above its 20-day moving average of $73.55 a share and then once it breaks out above some near-term overhead resistance levels at $75 to $78.90 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 820,390 shares. If that breakout hits soon, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at its 52-week high of $84.64 a share. Any high-volume move above that level will then give this stock a chance to tag $90 to $95, or even $100 a share.

Biogen

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Another biotechnology player that insiders are loading up on is Biogen (BIIB) - Get Report, which discovers, develops, manufactures and markets therapies for the treatment of neurological, autoimmune and hematologic disorders in the U.S. and internationally. Insiders are buying this stock into notable weakness, since shares have dropped by 14.6% over the last three months.

Biogen has a market cap of $75.2 billion and an enterprise value of $68.8 billion. This stock trades at a fair valuation, with a trailing price-to-earnings of 21.6 and a forward price-to-earnings of 18. Its estimated growth rate for this year is 15.3%, and for next year it's pegged at 11.3%. This is a cash-rich company, since the total cash position on its balance sheet is $2.37 billion and its total debt is $579.47 million.

A director just bought 10,000 shares, or about $3.04 million worth of stock, at $304.78 to $304.98 per share.

From a technical perspective, Biogen 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 $392 a share to its low of $299.76 a share with heavy downside volume. Following that move, shares of Biogen have started to rebound to the upside off that $299.76 low and it's now quickly moving within range of triggering a breakout trade.

If you're in the bull camp on Biogen, then I would look for long-biased trades as long as this stock is trending above Tuesday's intraday low of $308.68 or above $300 and then once it breaks out above Tuesday's intraday high of $320.51 to $325 a share and then above its gap-down-day high of $327 a share with volume that hits near or above its three-month average action of 1.91 million shares. If that breakout hits soon, then this stock will set up to re-fill some of its previous gap-down-day zone that started near $392 a share. 

Domino's Pizza

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One restaurant chain that insiders are jumping into is Domino's Pizza (DPZ) - Get Report, which operates as a pizza delivery company in the U.S. and internationally. Insiders are buying this stock into notable strength, since shares have trended higher by 11.8% over the last six months.

Domino's Pizza has a market cap of $6.1 billion and an enterprise value of $7.5 billion. This stock trades at a fair valuation, with a trailing price-to-earnings of 36 and a forward price-to-earnings of 27.9. Its estimated growth rate for this year is 20.7%, and for next year it's pegged at 14.3%. This is not a cash-rich company, since the total cash position on its balance sheet is $25.89 million and its total debt is $1.53 billion. This stock currently sports a dividend yield of 1.1%.

A director just bought 22,180 shares, or about $2.49 million worth of stock, at $112.13 per share.

From a technical perspective, Domino's Pizza is currently trending above its 200-day moving average and just below is 50-day moving average, which is neutral trendwise. This stock recently pulled back off its high of $119.73 to its low of $109.57 a share with heavy downside volume. Follow that decline, shares of Domino's Pizza have now started to rebound off that $109.57 low and it's quickly moving within range of triggering a near-term breakout trade.

If you're bullish on Domino's Pizza, then I would look for long-biased trades as long as this stock is trending above that recent low of $109.57 and then once it breaks out above some near-term overhead resistance levels at $113.23 to its 20-day moving average of $113.70 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 456,554 shares. If that breakout kicks off soon, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at $116 to its 52-week high of $119.73 a share. Any high-volume move above its 52-week high will then give this stock a chance to trend north of $120 a share.

Mead Johnson Nutrition

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One consumer goods player that insiders are active in is Mead Johnson Nutrition (MJN) , which manufactures, distributes and sells infant formulas, children's nutrition and other nutritional products. Insiders are buying this stock into modest weakness, since shares have traded lower by 7.7% over the last three months.

Mead Johnson Nutrition has a market cap of $18.2 billion and an enterprise value of $18.2 billion. This stock trades at a fair valuation, with a trailing price-to-earnings of 25.5 and a forward price-to-earnings of 21.9. Its estimated growth for this year is -0.80%, and for next year it's pegged at 10.5%. This is not a cash-rich company, since the total cash position on its balance sheet is $1.48 billion and its total debt is $1.51 billion. This stock currently sports a dividend yield of 1.8%.

A director just bought 10,000 shares, or about $890,000 worth of stock, at $89.03 per share.

From a technical perspective, Mead Johnson Nutrition 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 $83.50 to its recent high of $91.89 a share. During that uptrend, this stock has been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of Mead Johnson Nutrition within range of triggering a big breakout trade above some key near-term overhead resistance levels.

If you're bullish on Mead Johnson Nutrition, then I would look for long-biased trades as long as this stock is trending above some near-term support at $88 a share and then once it breaks out above some near-term overhead resistance levels at $91.89 to its 50-day at $91.92 a share and then above more resistance at $93.07 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 1.74 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 $96 to its 200-day moving average of $97.46, or even $98 to $100 a share.

Horsehead

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One final stock with some large insider buying is Horsehead (ZINC) , which produces and sells zinc and nickel-based products primarily in the U.S. and Canada. Insiders are buying this stock into massive weakness, since shares have plunged by 46.7% over the last three months.

Horsehead has a market cap of $447.6 million and an enterprise value of $799.7 million. This stock trades at a reasonable valuation, with a forward price-to-earnings of 10.9. Its estimated growth for this year is -226.1%, and for next year it's pegged at 196%. This is not a cash-rich company, since the total cash position on its balance sheet is $84.99 million and its total debt is $418.46 million.

A beneficial owner just bought 581,393 shares, or about $4.59 million worth of stock, at $7.82 per share. From a technical perspective, Horsehead 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 three months, with shares plunging lower from its high of $15.18 to its new 52-week low of $7.80 a share. During that downtrend, shares of Horsehead have been consistently making lower highs and lower lows, which is bearish technical price action.

If you're bullish on Horsehead, then I would look for long-biased trades as long as this stock is trending above its 52-week low of $7.80 a share and then once it breaks out above some near-term overhead resistance levels at $8.33 to $8.60 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 757,875 shares. If that breakout triggers soon, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at its 20-day moving average of $9.10 to $9.70, or even its 50-day moving average of $11.10 a share.

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