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.

Cherokee

One stock that insiders are active in here is Cherokee  (CHKE) , which markets, manages and licenses fashion and lifestyle brands for apparel, footwear, home and accessories worldwide. Insiders are buying this stock into major weakness, since shares have dropped by 36% over the last three months.

Cherokee has a market cap of $143.7 million and an enterprise value of $149.2 million. This stock trades at a reasonable valuation, with a trailing price-to-earnings of 15.2 and a forward price-to-earnings of 13.7. Its estimated growth rate for this year is -6.1%, and for next year it's pegged at 11.1%. This is not a cash-rich company, since the total cash position on its balance sheet is $9.80 million and its total debt is $21.49 million.

A beneficial owner just bought 86,703 shares, or about $1.24 million worth of stock, at $14.09 to $15.50 per share.

From a technical perspective, Cherokee is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock recently gapped down sharply lower from around $25 a share to under $15 a share with heavy downside volume flows. Following that move, shares of Cherokee went on to print a new low of $13.64 a share. This stock has now started to rebound off that $13.64 low and it's beginning to move within range of triggering a major breakout trade.

If you're bullish on Cherokee, then I would look for long-biased trades as long as this stock is trending above some near-term support levels at $15 or at $14 a share and then once it breaks out above some near-term overhead resistance levels at $16.78 to its gap-down-day high of $17.58 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 117,812 shares. If that breakout develops soon, then this stock will set up to re-fill some of its previous gap-down-day zone that started near $25 a share.

Box

Another stock that insider are jumping into here is Box  (BOX) , which provides a cloud-based enterprise content collaboration platform that enables organizations of various sizes to access, store, share and manage their content/information. Insiders are buying this stock into notable weakness, since shares have fallen by 25.9% over the last six three.

Box has a market cap of $1.5 billion and an enterprise value of $1.3 billion. This stock trades at a fair valuation, with a price-to-sales of 5.9 and a price-to-book of 7.6. Its estimated growth rate for this year is 85.6%, and for next year it's pegged at 25.6%. This is a cash-rich company, since the total cash position on its balance sheet is $242.24 million and its total debt is $45.19 million.

A director just bought 40,000 shares, or about $516,000 worth of stock, at $12.90 per share.

From a technical perspective, Box is currently trending below both its 50-day and 20-day moving averages, which is bearish. This stock has recently been attempting to carve out a double bottom chart pattern, since shares have found some buying interest at $12.80 to $12.52 a share. This stock has now started to spike modestly higher off those support levels and it's quickly moving within range of triggering a near-term breakout trade above some key overhead resistance levels.

If you're in the bull camp on Box, then I would look for long-biased trades as long as this stock is trending above some near-term support at $12.52 and then once it breaks out above some near-term overhead resistance levels at its 20-day moving average of $13.26 and above $13.50 a share with volume that hits near or above its three-month average action of 1.04 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 50-day moving average of $14.64 to $14.80, or even $15 to $15.60 a share.

Mattress Firm

One soft furnishing retailer that insiders are warming up to here is Mattress Firm  (MFRM) , which operates as a specialty retailer of mattresses, and related products and accessories in the U.S. Insiders are buying this stock into large weakness, since shares dropped by 35.9% over the last six months.

Mattress Firm has a market cap of $1.5 billion and an enterprise value of $2.2 billion. This stock trades at a reasonable valuation, with a trailing price-to-earnings of 31.5 and a forward price-to-earnings of 14.8. Its estimated growth rate for this year is 17.2%, 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 $10.64 million and its total debt is $715.03 million.

The CFO just bought 5,000 shares, or about $226,000 worth of stock, at $45.34 to $45.35 per share.

From a technical perspective, Mattress Firm is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock recently gapped down sharply lower from around $60 a share to close to $45 a share with heavy downside volume flows. Following that move, shares of Mattress Firm have been consolidating and trending sideways, with shares moving between $42.23 on the downside and $45.88 on the upside. This stock has now started to trend higher off that $42.23 low and it's quickly moving within range of triggering a near-term breakout trade above the upper-end of its recent sideways trending chart pattern.

If you're bullish on Mattress Firm, then I would look for long-biased trades as long as this stock is trending above its recent low of $42.23 and then once it breaks out above some near-term overhead resistance levels at $45 to $45.88 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 volume of 331,228 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 level at its gap-down-day high around $52.20 a share.

Ocular Therapeutix

One biopharmaceutical stock that insiders are in love with here is Ocular Therapeutix  (OCUL) , which focuses on the development and commercialization of therapies for eye diseases and conditions using its proprietary hydrogel platform technology in the U.S. Insiders are buying this stock into massive weakness, since shares have plunged by 57.3% over the last six months.

Ocular Therapeutix has a market cap of $447 million and an enterprise value of $380 million. This stock trades at a premium valuation, with a price-to-sales of 296 and a price-to-book of 4.1. Its estimated growth for this year is 43.9%, and for next year it's pegged at -23.8%. This is a cash-rich company, since the total cash position on its balance sheet is $123.72 million and its total debt is $15.04 million.

The CEO just bought 15,000 shares, or about $247,000 worth of stock, at $16.36 to $16.92 per share.

From a technical perspective, Ocular Therapeutix is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock recently formed a double bottom chart pattern at $15.61 to $15.63 a share. Following that bottom, shares of Ocular Therapeutix ripped higher and traded right up to its 50-day moving average. This stock has since then pulled back and is now setting up again to possibly trigger a near-term breakout trade.

If you're bullish on Ocular Therapeutix, then I would look for long-biased trades as long as this stock is trending above its 20-day moving average of $17.69 or above more near-term support at $17 and then once it breaks out above some near-term overhead resistance levels at $20 to its 50-day moving average of $20.44 and then above more resistance at $20.47 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 261,470 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 $22.92 to $24, or even its 200-day moving average of $25.66 a share.

Seattle Genetics

One final stock with some monster insider buying is Seattle Genetics  (SGEN) , which develops and commercializes antibody-based therapies for the treatment of cancer. Insiders are buying this stock into notable strength, since shares have risen by 17.8% over the last six months.

Seattle Genetics has a market cap of $6 billion and an enterprise value of $5.3 billion. This stock trades at a premium valuation, with a price-to-sales of 18 and a price-to-book of 31. Its estimated growth for this year is -54.8%, and for next year it's pegged at 53.1%. This is a cash-rich company, since the total cash position on its balance sheet is $249.54 million and its total debt is zero.

A beneficial owner just bought 5,159,484 shares, or about $219.60 million worth of stock, at $40.55 to $48.44 per share. From a technical perspective, Seattle Genetics is currently trending below its 50-day moving average and above its 200-day moving average, which is neutral trendwise. This stock has recently pulled back off its high of $49.66 right to around its 20-day moving average of $43.30 a share. That pullback is coming after a big run over the last few weeks, with saw shares of Seattle Genetics blast higher off its low of $36.61 to that recent high of $49.66 a share.

If you're bullish on Seattle Genetics, then I would look for long-biased trades as long as this stock is trending above its 20-day moving average of $43.30 or above more near-term support at $43.13 to $42 a share and then once it breaks out above its 50-day moving average of $45.23 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 1.01 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 $48 to $49.66, or even its 52-week high of $52.33 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.

More from Opinion

SolarWinds CEO: We Manage More of Cisco's Products Than Cisco Does

SolarWinds CEO: We Manage More of Cisco's Products Than Cisco Does

Tesla's $45,000 Model 3 Is a Half-Measure Meant to Protect Margins

Tesla's $45,000 Model 3 Is a Half-Measure Meant to Protect Margins

Flashback Friday: Happy Anniversary, Black Monday

Flashback Friday: Happy Anniversary, Black Monday

Vanguard Founder John Bogle Reflected on Black Monday: Rewind

Vanguard Founder John Bogle Reflected on Black Monday: Rewind

What You Need to Know About Black Monday 31 Years Later

What You Need to Know About Black Monday 31 Years Later