Updated to add technical charts.

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.

Mirati Therapeutics

Image placeholder title

One clinical-stage biopharmaceutical player that insiders are in love with here is Mirati Therapeutics (MRTX) - Get Report , which develops a pipeline of products targeting oncology. Insiders are buying this stock into large weakness, since shares have fallen by 33.3% over the last six months.

Mirati Therapeutics has a market cap of $412 million and an enterprise value of $262 million. This stock trades at a fair valuation, with a price-to-book of 3.00. Its estimated growth rate for this year is -7.3%, and for next year it's pegged at -3.9%. This is a cash-rich company, since the total cash position on its balance sheet is $138.01 million and its total debt is zero.

A beneficial owner just bought 20,848 shares, or about $403,000 worth of stock, at $19.36 to $19.48 per share.

From a technical perspective, Mirati Therapeutics is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has recently formed a double bottom chart pattern, after shares found some buying interest at $17.94 to $18.11 a share. Following that potential bottom, shares of Mirati Therapeutics have now started to uptrend with the stock moving back above its 20-day moving average. That uptrend is now quickly pushing this stock within range of triggering a near-term breakout trade.

If you're bullish on Mirati Therapeutics then I would look for long-biased trades as long as this stock is trending above those recent double bottom support levels and then once it breaks out above its 50-day moving average of $21.46 a share and then above more resistance at $22.14 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 173,713 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 $24.18 to $24.64, or even $26 to $27 a share.

OvaScience

Image placeholder title

Another fertility player that insiders are active in here is OvaScience (OVAS) , which discovers, develops and commercializes new fertility treatment options for women worldwide. Insiders are buying this stock into notable strength, since shares have risen by 13.3% over the last six months.

OvaScience has a market cap of $271 million and an enterprise value of $138 million. This stock trades at a fair valuation, with a price-to-book of 2.09. Its estimated growth rate for this year -3.3%, and for next year it's pegged at 2.2%. This is a cash-rich company, since the total cash position on its balance sheet is $126.66 million and its total debt is zero.

A director just bought 59,800 shares, or about $567,000 worth of stock, at $9.23 per share. The CEO also just bought 59,800 shares, or about $567,000 worth of stock, at $9.23 per share.

From a technical perspective, OvaScience 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 off its new 52-week low of $4.53 to its recent high of $11.50 a share. During that uptrend, shares of OvaScience have been making mostly higher lows and higher highs, which is bullish technical price action.

If you're in the bull camp on OvaScience, then I would look for long-biased trades as long as this stock is trending above its 20-day moving average of $8.44 a share and then once it breaks out above some near-term overhead resistance levels at $11 to $11.50 a share with volume that hits near or above its three-month average action of 524,990 shares. If that breakout fires off soon, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at $13.50 to $15 a share.

Mattress Firm

Image placeholder title

One specialty retailer that insiders are loading up on here is Mattress Firm (MFRM) , which operates as a retailer of mattresses, and related products and accessories in the U.S. Insiders are buying this stock into modest strength, since shares are up 3.8% over the last six months.

Mattress Firm has a market cap of $1.5 billion and an enterprise value of $2.1 billion. This stock trades at a reasonable valuation, with a trailing price-to-earnings of 26 and a forward price-to-earnings of 13.5. Its estimated growth rate for this year is 6.4%, and for next year it's pegged at 25.9%. This is not a cash-rich company, since the total cash position on its balance sheet is $10.28 million and its total debt is $697.50 million.

A beneficial owner just bought 672,560 shares, or about $26.20 million worth of stock, at $36.78 to $39.28 per share.

From a technical perspective, Mattress Firm is currently trending above its 50-day moving average and just below its 200-day moving averages, which is neutral trendwise. This stock has been uptrending a bit over the last few weeks, with shares moving higher off its low of $36.16 to its recent high of $43.40 a share. During that uptrend, shares of Mattress Firm 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 overhead resistance levels.

If you're bullish on Mattress Firm, then I would look for long-biased trades as long as this stock is trending above some near-term support levels at its 50-day moving average of $40.30 a share or above $38 a share and then once it breaks out above some near-term overhead resistance levels at $43.40 to $43.70 a share and then over $44.50 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 487,492 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 $47.50 to its 200-day moving average of $48.63, or even $50 to $52 a share.

Demandware

Image placeholder title

One application software player that insiders are jumping into here is Demandware (DWRE) , which provides enterprise-class cloud commerce solutions in the U.S., Germany, the U.K. and internationally. Insiders are buying this stock into large weakness, since shares have dropped sharply by 26.9% over the last six months.

Demandware has a market cap of $1.4 billion and an enterprise value of $1.1 billion. This stock trades at a premium valuation, with a forward price-to-earnings of 112. Its estimated growth rate for this year is -37.9%, and for next year it's pegged at 94.4%. This is a cash-rich company, since the total cash position on its balance sheet is $197.01 million and its total debt is zero.

The CEO just bought 30,000 shares, or about $1.04 million worth of stock, at $34.93 per share.

From a technical perspective, Demandware 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 strong for the last two months, with shares moving higher off its new 52-week low of $26.47 to its recent high of $38 a share. During that uptrend, shares of Demandware have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now started to push this stock within range of triggering a near-term breakout trade.

If you're bullish on Demandware, then I would look for long-biased trades as long as this stock is trending above some key near-term support at $33.02 a share and then once it breaks out above some near-term overhead resistance levels at $39 to $40 a share with volume that hits near or above its three-month average action of 665,334 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 $44 to $45, or even $46 to $48 a share.

Flex Pharma

Image placeholder title

One final stock with some decent insider buying is biotechnology player Flex Pharma (FLKS) , which develops and commercializes products for the treatment of nocturnal leg cramps, muscle cramps, spasms, and spasticity associated with neuromuscular conditions; and exercise-associated muscle cramps. Insiders are buying this stock into notable strength, since shares have trended up 6.6% over the last six months.

Flex Pharma has a market cap of $206 million and an enterprise value of $72 million. This stock trades at a fair valuation, with a price-to-book of 1.75. Its estimated growth rate for this year is -21.2%, and for next year it's pegged at -8.7%. This is a cash-rich company, since the total cash position on its balance sheet is $99.16 million and its total debt is zero.

The CEO just bought 49,563 shares, or about $548,000 worth of stock at $10.55 per share. From a technical perspective, Flex Pharma is currently trending above its 50-day moving average and just below its 200-day moving average, which is neutral trendwise. This stock has been uptrending strong over the last few weeks, with shares moving higher off its low of $6.48 to its recent high of $12.10 a share. During that uptrend, shares of Flex Pharma has been making mostly higher lows and higher highs, which is bullish technical price action.

If you're bullish on Flex Pharma, then I would look for long-biased trades as long as this stock is trending above some near-term support at $10.06 or even above its 20-day moving average of $9.42 a share and then once it breaks out above some near-term overhead resistance at $11.50 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 volume of 88,734 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 $12.10 to its 200-day moving average of $12.16, or even $13 to $15 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.