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.

Opko Health

One biotech stock that insiders are active in here is Opko Health  (OPK) , which engages in the discovery, development and commercialization of novel and proprietary technologies in the U.S. and internationally. Insiders are buying this stock into major weakness, since shares have fallen by 32.9% over the last three months.

Opko Health has a market cap of $5.5 billion and an enterprise value of $4.5 billion. This stock trades at a premium valuation, with a forward price-to-earnings of 206. Its estimated growth rate for this year is 14.6%, and for next year it's pegged at 114.3%. This is a cash-rich company, since the total cash position on its balance sheet is $221.22 million and its total debt is $125.95 million.

The CEO just bought 110,600 shares, or about $1.10 million worth of stock, at $10.03 per share.

From a technical perspective, Opko Health is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been downtrending over the last two months and change, with shares moving lower from its high of $17.51 to its recent low of $9.83 a share. During that downtrend, shares of Opko Health 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 $9.83 low and it's beginning to move within range of triggering a major breakout trade.

If you're bullish on Opko Health, then I would look for long-biased trades as long as this stock is trending above its recent low of $9.83 and then once it breaks out above some near-term overhead resistance levels at $10.50 to its 20-day moving average of $11.07 and then above more resistance at $11.31 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 5.12 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 $12.50 to $13, or even its 200-day moving average of $13.61 to its 50-day moving average of $13.86 a share.

Rovi

A technology stock that insider are loading up on here is Rovi  (ROVI) , which provides integrated solutions for the discovery and personalization of digital entertainment to service providers and consumer electronics industry worldwide. Insiders are buying this stock into major weakness, since shares have plunged lower by 46.6% over the last six months.

Rovi has a market cap of $1 billion and an enterprise value of $1.8 billion. This stock trades at a cheap valuation, with a forward price-to-earnings of 5.6. Its estimated growth rate for this year is -13.2%, and for next year it's pegged at 37.1%. This is not a cash-rich company, since the total cash position on its balance sheet is $216.84 million and its total debt is $1.07 billion.

A director just bought 450,000 shares, or about $4.8 million worth of stock, at $10.76 per share.

From a technical perspective, Rovi 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 its low of $9.21 to its recent high of $12.02 a share. During that uptrend, shares of Rovi have been making mostly higher lows and higher highs, which is bullish technical price action. This move has now pushed shares of Rovi within range of triggering a major breakout trade above some key near-term overhead resistance levels.

If you're in the bull camp on Rovi, then I would look for long-biased trades as long as this stock is trending above some near-term support at $11.33 or above its 20-day at $10.87 and then once it breaks out above some near-term overhead resistance levels at $12.02 to its 50-day moving average of $12.20 and then above more resistance at $13 a share with volume that hits near or above its three-month average action of 1.98 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 levels at $14 to $15 a share. Any high-volume move above $15 will then give this stock a chance to re-fill some of its previous gap-down-day zone from July that started at $17.50 a share.

Artisan Partners Asset Management

One financial stock that insiders are jumping into here is Artisan Partners Asset Management  (APAM) , a publicly owned investment manager. Insiders are buying this stock into notable weakness, since shares dropped by 23.2% over the last three months.

Artisan Partners Asset Management has a market cap of $1.5 billion and an enterprise value of $1.5 billion. This stock trades at a fair valuation, with a trailing price-to-earnings of 20.5 and a forward price-to-earnings of 12.4. Its estimated growth rate for this year is -9.8%, and for next year it's pegged at 9.4%. This is just barley a cash-rich company, since the total cash position on its balance sheet is $215.46 million and its total debt is $200 million. This stock currently sports a dividend yield of 6.2%.

A director just bought 12,500 shares, or about $488,000 worth of stock, at $39.08 per share.

From a technical perspective, Artisan Partners Asset Management is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been downtrending badly for the last month and change, with shares moving lower from its high of $47.77 to its intraday low of $37.71 a share. During that downtrend, shares of Artisan Partners Asset Management have been consistently making lower highs and lower lows, which is bearish technical price action. That said, this stock has started to rebound off that $38.91 low and it's starting to trend within range of triggering a near-term breakout trade.

If you're bullish on Artisan Partners Asset Management, then I would look for long-biased trades as long as this stock is trending above its intraday low from Tuesday at $37.71 and then once it breaks out above some near-term overhead resistance levels at $39 to $40 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 283,908 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 20-day moving average of $41.04 to $42.72, or even its 50-day moving average of $43.99 to its 200-day moving average of $45.04 a share.


Avnet

Another stock that insiders are in love with here is Avnet  (AVT) , which distributes electronic components, enterprise computer and storage products, IT solutions and services, and embedded subsystems in the Americas, Europe, the Middle East, Africa and the Asia/Pacific. Insiders are buying this stock into modest strength, since shares have traded up 2.2% over the last three months.

Avnet has a market cap of $5.9 billion and an enterprise value of $6.8 billion. This stock trades at a reasonable valuation, with a trailing price-to-earnings of 10.6 and a forward price-to-earnings of 8.5. Its estimated growth for this year is 6.2%, and for next year it's pegged at 7.1%. This is not a cash-rich company, since the total cash position on its balance sheet is $932.55 million and its total debt is $1.98 billion. This stock currently sports a dividend yield of 1.5%.

A director just bought 46,700 shares, or about $1.98 worth of stock, at $42.60 per share.

From a technical perspective, Avnet is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending over the last month, with shares moving higher from its low of $36.27 to its intraday high of $43.89 a share. During that uptrend, shares of Avnet have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now started to push shares of Avnet within range of triggering a big breakout trade.

If you're bullish on Avnet, then I would look for long-biased trades as long as this stock is trending above some near-term support at $42 or above its 50-day moving average of at $41.41 and then once it breaks out above some near-term overhead resistance levels at $44.50 to $46 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 1.02 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 level at its 52-week high of $47.27 a share. Any high-volume move above that level will then give this stock a chance to tag or take out $50 a share.


Methode Electronics

One more stock with some big insider buying is Methode Electronics  (MEI) , which designs, manufactures and markets components and subsystem devices in the U.S., China, Malta and internationally. Insiders are buying this stock into large weakness, since shares have dropped by 31.5% over the last three months.

Methode Electronics has a market cap of $1.2 billion and an enterprise value of $1 billion. This stock trades at a cheap valuation, with a trailing price-to-earnings of 12.4 and a forward price-to-earnings of 12.7. Its estimated growth for this year is -9.5%, and for next year it's pegged at 17.4%. This is a cash-rich company, since the total cash position on its balance sheet is $167.90 million and its total debt is $2 million. This stock currently sports a dividend yield of 1.1%.

A director just bought 30,553 shares, or about $978,000 worth of stock, at $32.03 per share. From a technical perspective, Methode Electronics is currently trending below its 200-day moving average and above its 50-day moving average, which is neutral trendwise. This stock has been trending sideways for the last few weeks, with shares moving between $31.43 on the downside and $33.95 on the upside. Shares of Methode Electronics have now started to spike a bit higher off that $31.43 low and it's quickly moving within range of triggering a big breakout trade above the upper-end of that recent sideways trending chart pattern.

If you're bullish on Methode Electronics, then I would look for long-biased trades as long as this stock is trending above some near-term support at $31.43 or above its 20-day moving average of $30.54 to more support at $30 a share and then once it breaks out above some near-term overhead resistance at $33.95 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 834,839 shares. If that breakout triggers soon, then this stock will set up to re-fill some of its previous gap-down-day zone from June that started near $44 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.