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.

Stocks with notable insider activity is something that I tweet about on a regular basis. These are also the exact type of stocks that I love to trade and alert in real-time.

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.

pdvWireless

One technology player that insiders are active in here is pdvWireless  (PDVW) , which operates as a private wireless communications carrier and provider of mobile workforce communication and location-based solutions in the U.S. Insiders are buying this stock into notable weakness, since shares have dropped by 22.3% over the last six months.

pdvWireless has a market cap of $313 million and an enterprise value of $165 million. This stock trades at a premium valuation, with a price-to-sales of 89.59 and a price-to-book of 1.21. Its estimated growth rate for this year is 5.2%, and for next year it's pegged at 11.6%. This is a cash-rich company, since the total cash position on its balance sheet is $153.46 million and its total debt is $991,000.

A beneficial owner just bought 66,500 shares, or about $1.44 million worth of stock at $21.59 to $22.01 per share. That same beneficial owner also just bought 47,232 shares, or about $957,000 worth of stock at $19.08 to $20.99 per share. From a technical perspective, pdvWireless 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 two months, with shares collapsing off its high of $43.04 a share to its new 52-week low of $18.60 a share. During that downtrend, shares of pdvWireless have been consistently making lower highs and lower lows, which is bearish technical price action. That said, this stock has now started to rebound off that $18.60 low, and it's now quickly moving within range of triggering a big breakout trade.

If you're bullish on pdvWireless, then I would look for long-biased trades as long as this stock is trending above some near-term support at $20 a share or above its new 52-week low of $18.60 a share and then once it breaks out above its 20-day moving average of $22.48 a share and then above more resistance just above $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 volume of 98,152 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 levels at $27 to its 200-day moving average of $28.93 a share.

Mattress Firm

Another specialty retailer player that insiders are jumping into 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 weakness, since shares have fallen by 23% over the last six months.

Mattress Firm has a market cap of $1.3 billion and an enterprise value of $2.7 billion. This stock trades at a reasonable valuation, with a forward price-to-earnings of 12.3. Its estimated growth rate for this year is -5.10%, and for next year it's pegged at 24.6%. This is not a cash-rich company, since the total cash position on its balance sheet is $1.14 million and its total debt is $1.47 billion.

A beneficial owner just bought 128,956 shares, or about $4.18 worth of stock, at $32.39 to $32.86 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 has been uptrending strong over the last few weeks, with shares moving higher off its low of $27.18 a share to its intraday high on Thursday of $35 a share. During that uptrend, this stock has been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of Mattress Firm within range of triggering a near-term breakout trade.

If you're bullish on Mattress Firm then I would look for long-biased trades as long as this stock is trending above its 20-day moving average of $32.98 a share or above more near-term support at $31 a share and then once it breaks out above some near-term overhead resistance levels at $35 a share to its 50-day moving average of $35.90 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 400,158 shares. If that breakout takes hold soon, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at $40 to its 200-day moving average of $41.46 a share, or even $45 a share.

Applied Optoelectronics

One technology player that insiders are snapping up here is Applied Optoelectronics  (AAOI - Get Report) , which designs, manufactures and sells fiber-optic networking products primarily for Internet data center, cable television and fiber-to-the-home networking end-market. Insiders are buying this stock into massive weakness, since shares have dropped sharply by 39% over the last six months.

Applied Optoelectronics has a market cap of $176 million and an enterprise value of $217 billion. This stock trades at a reasonable valuation, with a trailing price-to-earnings of 17.4 and a forward price-to-earnings of 9.1. Its estimated growth rate for this year -59.2%, and for next year it's pegged at 169%. This is not a cash-rich company, since the total cash position on its balance sheet is $53.49 million and its total debt is $95.56 million.

A director just bought 105,000 shares, or about $1.05 million worth of stock, at $10.08 per share.

From a technical perspective, Applied Optoelectronics is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been uptrending over the last two months, with shares moving higher off its low of $8.08 a share to its recent high of $11.64 a share. During that uptrend, shares of Applied Optoelectronics 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 big breakout trade above some key near-term overhead resistance levels.

If you're in the bull camp on Applied Optoelectronics, then I would look for long-biased trades as long as this stock is trending above some near-term support levels at $9.92 to $9.78 a share and then once it breaks out above some key near-term overhead resistance levels at $10.54 a share to its 50-day moving average of $10.70 a share and then above $11 a share with volume that hits near or above its three-month average action of 500,788 shares. If that breakout develops soon, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at $11.64 to $11.78, or even its gap-down-day high from April near $13 a share.

LendingClub

One financial player that insiders are loading up on here is LendingClub  (LC - Get Report) , which operates as an online marketplace that connects borrowers and investors in the U.S. Insiders are buying this stock into massive weakness, since shares have plunged by 57.4% over the last six months.

LendingClub has a market cap of $1.89 billion and an enterprise value of $1.28 billion. This stock trades at a fair valuation, with a trailing price-to-earnings of 329 and a forward price-to-earnings of 18.3. Its estimated growth rate for this year is 7.1, and for next year it's pegged at 80%. This is a cash-rich company, since the total cash position on its balance sheet is $583.84 million and its total debt is $15.1 million.

A beneficial owner just bought 4.391,440 shares, or about $20.39 million worth of stock, at $4.29 to $4.75 per share.

From a technical perspective, LendingClub is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been uptrending over the last two months, with shares moving higher off its low of $3.44 a share to its recent high of $5.14 a share. During that uptrend shares of LendingClub 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 big breakout trade.

If you're bullish in LendingClub, then I would look for long-biased trades as long as this stock is trending above its 20-day moving average of $4.69 a share or above more near-term support at $4.50 a share and then once it breaks out above some near-term overhead resistance levels at $5 to $5.14 a share and then above its 50-day moving average of $5.51 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 17.70 shares. If that breakout materializes soon, then this stock will set up to re-fill some of its previous gap-down-day zone from May that started near $7 a share.

BioScrip

My final stock with some decent insider buying is health care player BioScrip  (BIOS) , which provides home infusion services in the U.S. Insiders are buying this stock into big strength, since shares have rallied by 42.9% over the last three months.

BioScrip a market cap of $306 million and an enterprise value of $607 million. This stock trades at a reasonable valuation, with a price-to-sales of 0.20. Its estimated growth rate for this year is 50%, and for next year it's pegged at 95%. This is not a cash-rich company, since the total cash position on its balance sheet is $8.05 million and its total debt is $423.93 million.

A director just bought 240,000 shares, or about $599,000 worth of stock, at $2.50 per share.

From a technical perspective, BioScrip is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending over the last few weeks, with shares moving higher off its low of $1.97 a share to its intraday high on Thursday of $2.88 a share. During that uptrend, shares of BioScrip 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 BioScrip, then I would look for long-biased trades as long as this stock is trending above its 50-day moving average of $2.62 a share and then once it breaks out above some near-term overhead resistance levels at $3 to $3.09 a share with volume that hits near or above its three-month average action of 698,827 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 levels at $3.50 to $4, or even $4.50 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.