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.


Columbia Pipeline Group

One energy player that insiders are jumping into here is Columbia Pipeline Group  (CPGX), which owns, operates and develops a portfolio of pipelines, storage and related midstream assets. Insiders are buying this stock into notable weakness, since shares have dropped by 22% over the last six months.

Columbia Pipeline Group has a market cap of $7.8 billion and an enterprise value of $11 billion. This stock trades at a premium valuation, with a trailing price-to-earnings of 30 and a forward price-to-earnings of 28.8. Its estimated growth rate for next year is -15%. This is not a cash-rich company, since the total cash position on its balance sheet is $136.80 million and its total debt is $3.48 billion. This stock currently sports a dividend yield of 2%.

The president just bought 29,780 shares, or about $723,000 worth of stock, at $24.31 per share.

From a technical perspective, Columbia Pipeline Group is currently trending below both its 50-day and 20-day moving averages, which is bearish. This stock has been downtrending over the last three months and change, with shares moving lower from its high of $32.86 to its recent low of $23.16 a share. During that downtrend, shares of Columbia Pipeline Group have been making mostly lower highs and lower lows, which is bearish technical price action. That said, this stock has recently started to rebound off that $23.16 low and it's now trending within range of triggering a near-term breakout trade.

If you're bullish on Columbia Pipeline Group, then I would look for long-biased trades as long as this stock is trending above some near-term support levels at $23.70 to $23.16 a share and then once it breaks out above some near-term overhead resistance levels at its 20-day moving average of $25.73 to $25.82 a share and then above more resistance at around $26 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 2.25 million shares. If that breakout gets underway soon, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at its 50-day moving average of $27.69 to $28, or even $29 to $30 a share.

Level 3 Communications

Another technology player that insider are loading up on here is Level 3 Communications  (LVLT), which operates as a facilities-based provider of a range of integrated communications services primarily in North America, Latin America, Europe, the Middle East and Africa. Insiders are buying this stock into notable weakness, since shares have traded off by 15.9% over the last six months.

Level 3 Communications has a market cap of $16.3 billion and an enterprise value of $26.4 billion. This stock trades at a fair valuation, with a trailing price-to-earnings of 55.8 and a forward price-to-earnings of 19.7. Its estimated growth rate for this year is 3.3%, and for next year it's pegged at 85.6%. This is not a cash-rich company, since the total cash position on its balance sheet is $549 million and its total debt is $11.02 billion.

A beneficial owner just bought 100,000 shares, or about $4.34 million worth of stock, at $43.46 per share.

From a technical perspective, Level 3 Communications 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 four months, with shares moving lower from its high of $57.08 to its recent low of $42.89 a share. During that downtrend, shares of Level 3 Communications have been consistently making lower highs and lower lows, which is bearish technical price action. That said, this stock has recently started to rebound off that $42.89 low and it's beginning to move within range of triggering a near-term breakout trade.

If you're in the bull camp on Level 3 Communications, then I would look for long-biased trades as long as this stock is trending above some near-term support levels at $44.63 to $44 a share and then once it breaks out above some near-term overhead resistance levels at $46.24 to its 20-day moving average of $46.38 a share with volume that hits near or above its three-month average action of 2.35 million 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 its 50-day moving average of $49.51 to $51, or even its 200-day moving average of $51.85 a share.

Coty

One personal products player that insiders are snapping up a huge amount of stock in here is Coty  (COTY - Get Report), which manufactures, markets and distributes beauty products worldwide. Insiders are buying this stock into major strength, since shares have jumped higher by 27.4% over the last six months.

Coty has a market cap of $10.3 billion and an enterprise value of $12.6 billion. This stock trades at a premium valuation, with a trailing price-to-earnings of 44.8 and a forward price-to-earnings of 25.4. Its estimated growth rate for the current quarter is 7.1%, and for the next quarter it's pegged at -15.6%. This is not a cash-rich company, since the total cash position on its balance sheet is $341.30 million and its total debt is $2.64 billion.

A beneficial owner just bought 586,200 shares, or about $16.85 million worth of stock, at $28.46 to $29.02 per share.

From a technical perspective, Coty is currently trending below its 50-day moving average and above its 200-day moving average, which is neutral trendwise. This stock has been trending sideways and consolidating over the last month and change, with shares moving between $31.25 on the upside and $26.33 on the downside. Any high-volume move above the upper-end of its recent sideways trending chart pattern could trigger a near-term breakout trade for shares of Coty.

If you're bullish on Coty, then I would look for long-biased trades as long as this stock is trending above some near-term support levels at $28 to $27 a share and then once it breaks out above some near-term overhead resistance levels at $30.61 to $31.25 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 1.86 million shares. If that breakout hits soon, then this stock will set up to re-test or possibly take out its next major overhead resistance level at its 52-week high of $32.72 a share. Any high-volume move above that level will then give this stock a chance to tag or take out $35 a share.

Pacific DataVision

One technology player that insiders are in love with here is Pacific DataVision  (PDVW), which develops and sells wireless communications applications. Insiders are buying this stock into major weakness, since shares have fallen sharply by 28.1% over the last three months.

Pacific DataVision has a market cap of $485 million and an enterprise value of $287 million. Its estimated growth for this year is -8.9%, and for next year it's pegged at -27.7%. This is a cash-rich company, since the total cash position on its balance sheet is $175.85 million and its total debt is zero.

A beneficial owner just bought 26,454 shares, or about $853,000 worth of stock, at $32.17 to $32.37 per share.

From a technical perspective, Pacific DataVision is currently trending above both its 50-day and 20-day moving averages, which is bullish. This stock broke out on Tuesday above some near-term overhead resistance at $33.15 a share. That breakout is now quickly pushing shares of Pacific DataVision within range of triggering a much bigger breakout trade above some near-term overhead resistance levels.

If you're bullish on Pacific DataVision, then I would look for long-biased trades as long as this stock is trending above some near-term support at its 20-day moving average of $31.84 or above more near-term support at around $30 a share and then once it breaks out above some near-term overhead resistance levels at $35 to $35.14 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 128,875 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 $39 to around $42 a share.

FMC

One final stock with some decent insider buying is diversified chemical player FMC  (FMC - Get Report), which provides solutions, applications and products for the agricultural, consumer and industrial markets in North America, Europe, the Middle East, Africa, Latin America and the Asia Pacific. Insiders are buying this stock into massive weakness, since shares have plunged by 30.8% over the last six months.

FMC Corp. has a market cap of $5.6 billion and an enterprise value of $7.3 billion. This stock trades at a cheap valuation, with a trailing price-to-earnings of 6.8 and a forward price-to-earnings of 10.6. Its estimated growth for this year is -21.3%, and for next year it's pegged at 25.2%. This is not a cash-rich company, since the total cash position on its balance sheet is $477.50 million and its total debt is $2.32 billion. This stock currently sports a dividend yield of 1.5%.

A director just bought 15,000 shares, or about $614,000 worth of stock, at $40.95 per share. From a technical perspective, FMC Corp. is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been uptrending over the last few weeks, with shares moving higher from is low of $39.45 to its recent high of $42.60 a share. During that uptrend, shares of FMC Corp. 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.

If you're bullish on FMC Corp., then I would look for long-biased trades as long as this stock is trending above some near-term support at $41 or at $40 a share and then once it breaks out above some near-term overhead resistance levels at $42.60 to $42.73 a share and then above $43 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 1.02 million 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 $44.02 to its 50-day moving average of $47.25 a share.

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