Skip to main content

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.

Protalix BioTherapeutics

One biopharmaceutical player that insiders are in love with here is Protalix BioTherapeutics (PLX) - Get Protalix Biotherapeutics, Inc. Report , which focuses on the development and commercialization of recombinant therapeutic proteins based on its proprietary ProCellEx protein expression system in Israel and internationally. Insiders are buying this stock into massive weakness, since shares have plunged by 42.2% over the last three months.

Protalix BioTherapeutics has a market cap of $101 million and an enterprise value of $119 million. This stock trades at a premium valuation, with a price-to-sales of 6.83. Its estimated growth rate for this year is 250%, and for next year it's pegged at -164.6%. This is not a cash-rich company, since the total cash position on its balance sheet is $43.24 million and its total debt is $67.67 million.

A beneficial owner just bought 4,000,423 shares, or about $4 million worth of stock, at $1.00 to $1.03 per share.

From a technical perspective, Protalix BioTherapeutics 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 six months, with shares dropping sharply off its high of over $2.20 to its recent low of 95 cents per share. During that downtrend, shares of Protalix BioTherapeutics have been consistently making lower highs and lower lows, which is bearish technical price action. That said, this stock has now started to rebound off that 95 cent low and it's quickly moving within range of triggering a major breakout trade.

If you're bullish on Protalix BioTherapeutics, then I would look for long-biased trades as long as this stock is trending above some near-term support at $1 or above that recent low of 95 cents per share and then once it breaks out above some near-term overhead resistance levels at $1.11 to its 20-day moving average of $1.14 and then above more resistance at $1.20 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 292,123 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 $1.30 to its 50-day moving average of $1.34, or even $1.45 to $1.55 a share.

CrossAmerica Partners

Another energy player that insider are active in here is CrossAmerica Partners (CAPL) - Get CrossAmerica Partners LP Report , which operates as a wholesale distributor of motor fuels, and owns and leases real estate used in the retail distribution of motor fuels in the U.S. Insiders are buying this stock into notable weakness, since shares have dropped by 20.6% over the last six months.

CrossAmerica Partners has a market cap of $855 million and an enterprise value of $1.1 billion. This stock trades at a reasonable valuation, with a forward price-to-earnings of 44.4. Its estimated growth rate for this year is 146.9%, and for next year it's pegged at 286.7%. This is not a cash-rich company, since the total cash position on its balance sheet is $4.59 million and its total debt is $274.29 million. This stock currently sports a divided yield of 8.6%.

TheStreet Recommends

A beneficial owner just bought 20,000 shares, or about $510,000 worth of stock, at $25.30 to $25.77 per share. That same beneficial owner also just bought 20,000 shares, or about $516,000 worth of stock, at $25.80 to $25.88 per share.

From a technical perspective, CrossAmerica Partners is currently trending above its 50-day moving average and below is 200-day moving average, which is neutral trendwise. This stock has been uptrending over the last two months, with shares moving higher from its low of $19.51 to its recent high of $27 a share. During that uptrend, shares of CrossAmerica Partners have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed this stock within range of triggering a near-term breakout trade above some key near-term overhead resistance levels.

If you're in the bull camp on CrossAmerica Partners, then I would look for long-biased trades as long as this stock is trending above its 20-day moving average of $24.79 or above its 50-day moving average of $23.36 and then once it breaks out above some near-term overhead resistance levels at $26.20 to $27 a share with volume that hits near or above its three-month average action of 142,885 shares. If that breakout gets set off soon, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at $28.50 to its 200-day at $29.42, or even $31 to $33 a share.

Aclaris Therapeutics

One clinical-stage specialty pharmaceutical player that insiders are jumping into here is Aclaris Therapeutics (ACRS) - Get Aclaris Therapeutics, Inc. Report , which focuses on identifying, developing, and commercializing topical drugs to address various unmet needs in dermatology. Insiders are buying this stock into major strength, since shares blasted higher by 39.6% over the last three months.

Aclaris Therapeutics has a market cap of $311 million and an enterprise value of $29.9 million. This is a cash-rich company, since the total cash position on its balance sheet is $9.85 million and its total debt is zero.

A beneficial owner just bought 42,813 shares, or about $601,000 worth of stock, at $14.06 per share. That same beneficial owner just bought 49,089 shares, or about $539,000 worth of stock, at $11 per share.

From a technical perspective, Aclaris Therapeutics is currently trending below both its 50-day and 20-day moving averages, which is bearish. This stock has been uptrending over the last month, with shares moving higher from its low of $10.99 to its recent high of $17.24 a share. During that uptrend, shares of Aclaris Therapeutics have been making mostly higher lows and higher highs, which is bullish technical price action. That strong trend has now pushed this stock within range of triggering a near-term breakout trade.

If you're bullish on Aclaris Therapeutics, then I would look for long-biased trades as long as this stock is trending above some near-term support at $14 or above more support at $12.50 a share and then once it breaks out above some key overhead resistance levels at $16.08 to its all-time high of $17.24 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 245,520 shares. If that breakout develops soon, then this stock will set up to enter new all-time-high territory, which is bullish technical price action.

Barnes & Noble Education

One specialty retailer that insiders are loading up on here is Barnes & Noble Education (BNED) - Get Barnes & Noble Education, Inc. Report , which provides bookstore operation services. Insiders are buying this stock into notable weakness, since shares have dropped by 15.7% over the last three months.

Barnes & Noble Education has a market cap of $599 million and an enterprise value of $603 million. This stock trades at a reasonable valuation, with a trailing price-to-earnings of 39.7 and a forward price-to-earnings of 23. This is a cash-rich company, since the total cash position on its balance sheet is $16.03 million and its total debt is zero.

A beneficial owner just bought 104,866 shares, or about $1.30 million worth of stock, at $12.35 per share.

From a technical perspective, Barnes & Noble Education is currently trending below both its 50-day and 20-day moving averages, which is bearish. This stock has been trending sideways over the last month or so, with shares moving between $12.23 on the downside and $13.44 on the upside. Any high-volume move above the upper-end of its recent sideways trending chart pattern soon could trigger a big breakout trade for shares of Barnes & Noble Education.

If you're bullish on Barnes & Noble Education, then I would look for long-biased trades as long as this stock is trending above some near-term support at $12.23 or above $12 share and then once it breaks out above some near-term overhead resistance levels at its 20-day moving average of $12.66 to its 50-day moving average of $12.85 and then above more key resistance levels at $12.91 to $13.44 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 512,492 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 $14.60 to $14.80 a share.

Amtech Systems

One final stock with some large insider buying is semiconductor player Amtech Systems (ASYS) - Get Amtech Systems, Inc. Report , which designs, assembles, sells, and installs capital equipment and related consumables used in the manufacture of wafers, primarily for the solar and semiconductor industries worldwide. Insiders are buying this stock into major weakness, since shares have crashed by 55.1% over the last six months.

Amtech Systems has a market cap of $68.5 million and an enterprise value of $54.6 million. This stock trades at a cheap valuation, with a forward price-to-earnings of 13.44. Its estimated growth rate for this year is 16.4%, and for next year it's pegged at 134.8%. This is just barely a cash-rich company, since the total cash position on its balance sheet is $23.72 million and its total debt is $9.31 million.

A beneficial owner just bought 305,000 shares, or about $1.50 million worth of stock, at $4.89 to $5 per share.

From a technical perspective, Amtech Systems is currently trending above its 50-day moving average and well below its 200-day moving average, which is neutral trendwise. This stock has been uptrending a bit over the last few weeks, with shares moving higher off its low of $4.14 to its recent high of $5.35 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 this stock within range of triggering a major breakout trade above some key near-term overhead resistance levels.

If you're bullish on Amtech Systems, then I would look for long-biased trades as long as this stock is trending above its 20-day moving average of $4.82 or above more support at $4.76 a share and then once it breaks out above some near-term overhead resistance levels at $5.35 to $5.66 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 79,838 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 $6.34 to $7.26, or even $8 a share.

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