5 Stocks With Big Insider Buying

 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. Here's a look five stocks whose insiders have been doing some big buying per SEC filings.

Intersections

One consumer services player that insiders are snapping up a large amount of stock in is Intersections (INTX) , which provides subscription-based consumer protection services in the U.S. and Canada. Insiders are buying this stock into major weakness, since shares are down sharply by 47% so far in 2014.

Intersections has a market cap of $75 million and an enterprise value of $52 million. This stock trades at a reasonable valuation, with a price-to-sales of 0.26 and a price-to-book of 0.82. This is a cash-rich company, since the total cash position on its balance sheet is $13.44 million and its total debt is just $1.96 million. This stock currently sports a dividend yield of 21.9%.

The beneficial owner just bought 552,795 shares, or about $2.09 million worth of stock, at $3.57 to $4.01 per share.

From a technical perspective, INTX 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 from its low of $3.32 to its recent high of $4.30 a share. During that uptrend, shares of INTX have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of INTX back above its 50-day moving average and it's quickly pushing the stock within range of triggering a big breakout trade.

If you're bullish on INTX, then I would look for long-biased trades as long as this stock is trending above support at $3.75 or above support $3.50 and then once it breaks out above some near-term overhead resistance at $4.30 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 action of 169,894 shares. If that breakout triggers soon, then INTX will set up to re-test or possibly take out its next major overhead resistance levels at $4.75 to $5.25 a share, or even $5.85 to $6 a share.

Guess?

Another apparel stores player that insiders are active in here is Guess? (GES) , which designs, markets, distributes, and licenses lifestyle collections of contemporary apparel and accessories for men, women, and children that reflect the American lifestyle and European fashion sensibilities. Insiders are buying this stock into notable weakness, since shares have dropped sharply by 27% so far in 2014.

Guess? has a market cap of $1.9 billion and an enterprise value of $1.48 billion. This stock trades at a reasonable valuation, with a trailing price-to-earnings of 13.6 and a forward price-to-earnings of 16.7. Its estimated growth rate for this year is -41.9%, and for next year it's pegged at 21.6%. This is a cash-rich company, since the total cash position on its balance sheet is $466.54 million and its total debt is just $9.17 million. This stock currently sports a dividend yield of 3.4%.

A director just bought 15,000 shares, or about $354,000 worth of stock, at $23.61 per share.

From a technical perspective, GES is currently trending well below both its 50-day and 200-day moving averages, which is bearish. This stock has been downtrending badly for the last two months and change, with shares moving lower from its high of $28.54 to its recent low of $22.52 a share. During that downtrend, shares of GES have been consistently making lower highs and lower lows, which is bearish technical price action.

If you're in the bull camp on GES, then I would look for long-biased trades as long as this stock is trending above that recent low of $22.52 a share and then once it breaks out above some near-term overhead resistance levels at $23.50 to just under $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 action of 1.04 million shares. If that breakout develops soon, then GES will set up to re-fill some of its previous gap-down-day zone from last August that started just above $25 a share.

Iron Mountain

One technology player that insiders are making moves in here is Iron Mountain (IRM) , which together with its subsidiaries, provides storage and information management services primarily in North America, Europe, Latin America, and the Asia Pacific. Insiders are buying into major strength, since shares are up sharply by 27% over the last six months.

Iron Mountain has a market cap of $6.9 billion and an enterprise value of $11 billion. This stock trades at a premium valuation, with a trailing price-to-earnings of 57 and a forward price-to-earnings of 24. Its estimated growth rate for this year is 39.8%, and for next year it's pegged at 2.1%. This is not a cash-rich company, since the total cash position on its balance sheet is $145.34 million and its total debt is $4.35 billion. This stock currently sports a dividend yield of 3.2%.

A director just bought 14,000 shares, or $502,000 worth of stock, at $35.92 per share.

From a technical perspective, IRM 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 and change, with shares moving higher from its low of $26.46 to its recent high of $37.10 a share. During that uptrend, shares of IRM have been making mostly higher lows and higher highs, which is bullish technical price action. Shares of IRM are now starting to trend within range of triggering a near-term breakout trade above some key overhead resistance levels.

If you're bullish on IRM, then I would look for long-biased trades as long as this stock is trending above its 50-day moving average of $34.97 a share and then once it breaks out above its 52-week high of $37.10 a share and above some key past resistance at $37.89 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 1.69 shares. If that breakout gets started soon, then IRM will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $45 to $50 a share.

Hologic

One health care player that insiders are in love with here is Hologic (HOLX) , which develops, manufactures, and supplies diagnostics products, medical imaging systems, and surgical products for women. Insiders are buying this stock into notable strength, since shares are up by 13.5% so far in 2014.

Hologic has a market cap of $7 billion and an enterprise value of $10.6 billion. This stock trades at a premium valuation, with a forward price-to-earnings of 16.4. Its estimated growth rate for this year is -4%, and for next year it's pegged at 6.9%. This is not a cash-rich company, since the total cash position on its balance sheet is $632.50 million and its total debt is $4.27 billion.

A director just bought 7,900 shares, or about $200,000 worth of stock, at $25.36 per share.

From a technical perspective, HOLX is currently trending above its 200-day moving average and just below its 50-day moving average, which is neutral trendwise. This stock has been uptrending a bit for the last few weeks, with shares moving higher from its low of $24.54 to its recent high of $25.63 a share. During that move, shares of HOLX have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of HOLX within range of triggering a major breakout trade above some key near-term overhead resistance levels.

If you're bullish on HOLX, then I would look for long-biased trades as long as this stock is trending above some key near-term support at $24.54 a share or above its 200-day at $23.21 a share and then once it breaks out above some near-term overhead resistance levels at $25.63 to $26.47 a share and then above its 52-week high at $26.75 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 1.72 million shares. If that breakout develops soon, then HOLX will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $30 to $35 a share.

Cousins Properties

One final stock with some large insider buying is Cousins Properties (CUZ)   is a real estate investment trust. Insiders are buying this stock into large strength, since shares have trended higher so far in 2014 by 25%.

Cousins Properties has a market cap of $2.5 billion and an enterprise value of $3.4 billion. This stock trades at a reasonable valuation, with a trailing price-to-earnings of 35 and a forward price-to-earnings of 15. Its estimated growth rate for this year is 9.3%, and for next year it's pegged at 19.8%. This is not a cash-rich company, since the total cash position on its balance sheet is $6.26 million and its total debt is $665.85 million. This stock currently sports a dividend yield of 2.4%.

The chairman of the board just bought 260,000 shares, or about $3.31 million worth of stock, at $12.75 per share.

From a technical perspective, CUZ is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending very strong for the last six months, with shares moving higher from its low of $10.90 to its recent high of $13.30 a share. During that move, shares of CUZ have been consistently making higher lows and higher highs, which is bullish technical price action.

If you're bullish on CUZ, then look for long-biased trades as long as this stock is trending above its 50-day at $12.65 a share or above more key near-term support at $12.15 a share and then once it breaks out above its 52-week high at $13.30 a share with high volume. Look for a sustained move or close above that level with volume that registers near or above its three-month average action of 1.97 million shares. If that breakout kicks off soon, then CUZ will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $16 to $17 a share, or even $20 a share.

To see more stocks with notable insider buying, check out the Stocks With Big Insider Buying portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.

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At the time of publication, author had no positions in stocks mentioned. Roberto Pedone, based out of Delafield, Wis., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.

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