WINDERMERE, Fla. (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.

Related: 5 Big Stocks to Trade for Gains

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, its large 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 it's 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. Here's a look at some stocks that insiders have been doing some big buying in per SEC filings.

Leap Wireless

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

Insiders have been scooping up shares of Leap Wireless ( LEAP), a wireless communications carrier that offers digital wireless services in the U.S. under the Cricket brand. Leap's Cricket service offerings provide customers with unlimited wireless services for a flat rate without requiring a fixed-term contract or a credit check. Insiders at Leap are stepping in to buy a very depressed stock, with shares off by over 45% so far in 2011.

This company has a current market cap of $512 million and an enterprise value of $3 billion. Leap Wireless is currently not profitable, and it is estimated to lose $3.70 per share this year on revenue of $3.11 billion. Its growth rate estimates are for -2.8% this year and 48.9% next year. This is not a cash-rich company, with a whopping $3.23 billion in total debt on its balance sheet and just $724 million in total cash.

This company recently reported a disappointing second-quarter loss of $65.2 million, or 85 cents per share, vs. a loss of $18.2 million, or 24 cents per share, for the same period a year ago. The company said the loss was due to fewer new customers after it added 29,000 customers compared with analyst estimates for 38,000.

A director and beneficial owner just bought 4,150,000 shares, or $25.2 million worth of stock, at $6.07 per share.

From a technical standpoint, shares of Leap have been absolutely destroyed recently, dropping from a high of over $17 a share to its current price near $6.70. The stock is now trading substantially below both its 50-day and 200-day moving averages, which is bearish. That said, the stock has started to find some buying support at below $6 a share, which is where the stock stopped its free fall.

If you want to buy this stock, you could add this name on any weakness and stop out of the trade if it moves below its recent low of $5.78 a share. A move below that level, which is the stock's 52-week low, would not be a good sign. Another way to play this name would be to buy it once it trades above $6.90 a share, which is a shorter-term overhead resistance level. I would look for strong volume that's close to or above its three-month average action of 2.2 million shares on any move over $6.90 for confirmation that the stock wants to trend higher.

>>Practice your stock trading strategies and win cash in our stock game.

Ziopharm Oncology

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

One under-$5 biopharmaceutical player that insiders have been doing some big buying in is Ziopharm Oncology ( ZIOP), which focuses on licensing and development of small molecule drug candidates that are related to cancer therapeutics already on the market or in development. This stock hasn't done much so far in 2011, with shares up just over 6%.

Ziopharm has a market cap of $336 million and an enterprise value of $210 million. This is not a profitable company yet, and it's bleeding a ton of cash. Ziopharm's operating cash flow is -$25 million and its levered free cash flow is -$18 million. The comapny is a cash-rich, with $130 million in cash on its balance sheet and zero debt.

This company just reported a loss of $10.7 million for the second quarter vs. a profit a year earlier from a gain in non-cash warrant income. Contract research revenue was $200,000 for this quarter vs. no such revenue in the second quarter of last year.

A director and beneficial owner just bought 846,522 shares, or about $4 million worth of stock, at $4.65 to $5.13 per share. This same director also bought $29 million worth of stock back in January and $10.9 million worth of stock in February.

From a technical standpoint, shares of Ziopharm have plunged from a 52-week high hit in May at $7.85 to its current price of just below $5 a share. The stock is currently trading below both its 50-day and 200-day moving averages, which is bearish. That said, the stock has started to find some buying interest at a former support zone at $4.43 a share.

If you want to buy this stock, then you could buy it on any weakness and simply stop out of the trade if it moves below its recent low of $4.35 a share. A move below that level would not be a good sign since it could mean the stock wants to trade into the $3 level.

Chesapeake Energy

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

A major player in the energy complex that insiders have been doing some notable buying in is Chesapeake Energy ( CHK - Get Report), a producer of natural gas and oil and natural gas liquids in the U.S. Insiders at Chesapeake are buying shares into strength, with the stock up over 15% so far in 2011.

This company has a market cap of $18 billion and an enterprise value of $29 million. The stock is currently trading at a very reasonable valuation, with a trailing price-to-earnings of 19 and a forward price-to-earnings of 9.6. This is far from a cash-rich company; Chesapeake has over $10 billion in debt on its balance sheet and just $109 million in total cash.

A director just bought 100,000 shares, or about $2.48 million worth of stock, at $27.46 to $6.96 per share.

From a technical standpoint, shares of Chesapeake are trading below its 50-day moving average and above 200-day moving average, which is neutral trendwise. This stock recently hit some big resistance at around $35.75 a share and it slide all the way down to a recent low of $26.97 a share.If you want to buy this stock, then I would wait until it trades back above the 50-day moving average of $30.59 on strong volume. Look for volume that's close to or well above its three-month average action of 11.2 million shares. I would add to any long position in this stock if it then moves above $32 a share on big volume.

Chesapeake shows up on recent lists of 7 Value Picks to Hold and Jim Cramer's Red-Hot Nat Gas Stocks to Buy.

Legg Mason

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

Insiders have also been snapping up a ton of stock at Legg Mason ( LM - Get Report), which, acting through its subsidiaries, provides investment management and related services to institutional and individual clients, company-sponsored mutual funds and other pooled investment vehicles. It looks like some key insiders are finding a lot of value here in Legg Mason shares, since the stock is down by over 29% so far in 2011.

Legg Mason has a market cap of $3.7 billion and an enterprise value of $3.5 billion. This stock trades at a reasonable valuation, considering its trailing price-to-earnings is 14.6 and their forward price-to-earnings is 9.9. Legg Mason's growth estimates for this year is 16% and for next year it's 34.9%. This company has just a bit more cash than debt on its balance sheet, with $1.9 billion in cash and $1.73 billion in total debt.

Nelson Peltz, co-founder and CEO of hedge fund Trian Fund Management, just bought 790,000 shares, or $22.2 million worth of stock, at $28.06 per share.

From a technical standpoint, shares of LM are trading below both the 50-day and 200-day moving averages, which is bearish. This stock has been making lower highs and lower lows since April, which is a bearish trend for any stock. That said the stock has recently found some buying interest at around $24 a share, which is a support zone on the stock from September of last year.

If you want to buy LM, you could add this name on any weakness and stop out of the trade if it moves below its 52-week low of $24.11 a share. It's worth noting that there's also some previous support at $23.77 a share from early 2010. If history repeats itself for LM, then the stock should be an excellent buy at current levels. The last time it traded down near $24, it ran all the way up to over $37 a share.

Amphenol

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

One more name that has seen some decent insider buying is Amphenol ( APH - Get Report), a designer, manufacturer and marketer of electrical, electronic and fiber optic connectors, interconnect systems and coaxial and high-speed specialty cable. This is another situation in which insiders are finding some deep value in the stock since shares are off by over 15% so far in 2011.

Amphenol has a market cap of $7.5 billion and an enterprise value of $7.9 billion. The stock trades at a cheap valuation, considering that its trailing price-to-earnings is 14.3 and its forward price-to-earnings is 12.8. Amphenol's growth rate for this year is pegged at 15.2%. The company isn't cash-rich; it has $1.16 billion in total debt on its balance sheet and $696.55 million in total cash.

A director just bought 115,300 shares, or about $5 million worth of stock, at $43.31 per share.

From a technical standpoint, Amphenol has been in a nasty downtrend for the last six months with the stock printing lower lows and lower highs. Shares have fallen from the 52-week high of $59.11 a share to the current price of just around $45 a share. Shares are also trading substantially below its 50-day and 200-day moving averages, which is bearish. That said, the stock has found some recent buying support at $41 a share, which is very close to a longer-term support zone at $39.50 a share.

If you want to buy this stock, you could add it on any weakness and simply stop out of the trade if it moves below its recent low of $41.10 a share. I would only play this name for a trade towards its 50-day moving average at $50.27 a share, though, since the overall trend still looks bearish. A move above $45 a share on big volume should increase the probability of a run toward the 50-day. Look for volume that's close to or greater than its three-month average action of 1.3 million shares.

To see more stocks with notable insider buying, such as Morgan Stanley ( MS), Fifth Street Finance ( FSC) and Chiquita Brands ( CQB), check out the Stocks With Big Insider Buying portfolio on Stockpickr.

-- Written by Roberto Pedone in Winderemere, Fla.

RELATED LINKS:



Follow Stockpickr on Twitter and become a fan on Facebook.

At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Windermere, Fla., is an independent trader who focuses on stocks, options, futures, commodities and currencies. He is also an outside contributor to Beconequity.com and maintains the website Maddmoney.net, which he sold to Blue Wave Advisors in 2008. Roberto studied International Business at The Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany.