Some insiders are still buying their stock

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 vs. 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.

Lawson Products

One services player in which insiders are active is Lawson Products (LAWS - Get Report) , which distributes products and services to the industrial, commercial, institutional and government maintenance, repair, and operations marketplace in the U.S., Puerto Rico, Canada, Mexico and the Caribbean. Insiders are buying this stock into big strength, since shares have trended higher by 38% over the last three months.

Lawson Products has a market cap of $206 million and an enterprise value of $192 million. This stock trades at a reasonable valuation, with a forward price-to-earnings ratio of 41.7. Its estimated growth rate for this year is 566.7%, and for next year it's pegged at 180%. This is just barely a cash-rich company, since the total cash position on its balance sheet is $10.66 million and its total debt is $7.81 million.

A beneficial owner just bought 232,616 shares, or about $5.36 million worth of stock, at $23.05 per share.

From a technical perspective, Lawson Products 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 downtrending over the last month, with shares moving lower off its high of $25.80 a share to its recent low of $21.95 a share. During that downtrend, shares of Lawson Products have been making mostly lower highs and lower lows, which is bearish technical price action.

If you're bullish on Lawson Products then I would look for long-biased trades as long as this stock is trending above its recent low of $21.95 a share and then once it breaks out above some near-term overhead resistance levels at its 50-day moving average of $23.54 a share to its 20-day moving average of $24.08 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 23,848 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 $25.10 to its 52-week high of $25.80 a share. Any high-volume move above $25.80 will then give this stock a chance to make a run at $30 a share.

Regeneron Pharmaceuticals

Another health care player insiders are loading up on here is Regeneron Pharmaceuticals (REGN - Get Report) , which discovers, invents, develops, manufactures and commercializes medicines for the treatment of serious medical conditions worldwide. Insiders are buying this stock into modest weakness, since shares have dropped by 3.5% over the last six months.

Regeneron Pharmaceuticals has a market cap of $39 billion and an enterprise value of $37 billion. This stock trades at a fair valuation, with a trailing price-to-earnings of 53 and a forward price-to-earnings of 25.7. Its estimated growth rate for this year is -3.6%, and for next year it's pegged at 21.5%. This is a cash-rich company, since the total cash position on its balance sheet is $1.41 billion and its total debt is $385.81 million.

A beneficial owner just bought 87,298 shares, or about $33.27 million worth of stock, at $362.47 to $379.56 per share.

From a technical perspective, Regeneron Pharmaceuticals 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, after shares found some buying interest at $348.82 to $349.24 a share. Following that potential bottom, this stock has now started to spike a bit a higher and move within range of triggering a near-term breakout trade above some key overhead resistance levels.

If you're bullish on Regeneron Pharmaceuticals then I would look for long-biased trades as long as this stock is trending above those recent double bottom support levels and then once it breaks out above some near-term overhead resistance levels at its 20-day moving average of $370.66 a share to $375 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 995,563 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 $380 to its 50-day moving average of $382.70 a share, or even its 200-day moving average of $387.41 a share to $391 a share.

Seritage Growth Properties

One financial player insiders are jumping into is Seritage Growth Properties (SRG - Get Report) , which is a publicly owned real estate investment trust. It invests in the real estate markets of the U.S. Insiders are buying this stock into notable weakness, since shares have dropped by 11.5% over the last six months.

Seritage Growth Properties has a market cap of $2.4 billion and an enterprise value of $2.4 billion. This stock trades at a fair valuation, with a price-to-sales of 5.79 and a price-to-book of 1.64. This is not a cash-rich company, since the total cash position on its balance sheet is $95.23 million and its total debt is $1.17 billion. This stock currently sports a dividend yield of 2.3%.

A beneficial owner just bought 140,600 shares, or about $5.61 million worth of stock, at $39.74 per share.

From a technical perspective, Seritage Growth Properties is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock recently bounced sharply higher off its low of $39.60 a share with strong upside volume flows. That high-volume bounce is coming after a sharp downtrend that took the stock from around $49 a share to $39.60 a share in just a few months. Shares of Seritage Growth Properties are now quickly trending within range of triggering a near-term breakout trade above some key overhead resistance levels following that rebound.

If you're in the bull camp on Seritage Growth Properties, then I would look for long-biased trades as long as this stock is trending above its 20-day moving average of $42.45 a share or above more near-term support at $42 a share and then once it breaks out above some near-term overhead resistance levels at $44.04 to its 50-day moving average of $44.93 a share with volume that registers near or above its three-month average action of 290,656 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 $46.50 to its 200-day moving average of $47.43 a share, or even $48 to $49 a share.

Destination XL Group

Insiders are jumping into apparel stores player Destination XL Group (DXLG - Get Report) , which operates as a specialty retailer of big and tall men's apparel in the U.S. and England. Insiders are buying this stock into large weakness, since shares have fallen sharply by 28.7% over the last six months.

Destination XL Group has a market cap of $173 million and an enterprise value of $252 million. This stock trades at a reasonable valuation, with a forward price-to-earnings ratio of 43. Its estimated growth rate for this year is 60%, and for next year it's pegged at 300%. This is not a cash-rich company, since the total cash position on its balance sheet is $6.34 million and its total debt is $83.27 million.

A director just bought 49,212 shares, or about $180,000 worth of stock, at $3.67 per share. That same director also just bought 50,788 shares, or about $182,000 worth of stock, at $3.58 per share.

From a technical perspective, Destination XL Group 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 off its high of $5 a share to its new 52-week low of $3.15 a share. During that downtrend, shares of Destination XL Group have been making mostly lower highs and lower lows, which is bearish technical price action. That said, this stock has now started to rebound off that $3.15 low and it's starting to trend within range of triggering a near-term breakout trade.

If you're bullish on Destination XL Group, then I would look for long-biased trades as long as this stock is trending above its new 52-week low of $3.15 a share and then once it breaks out above some near-term overhead resistance levels at $3.60 to $3.85 a share and then above its 20-day moving average of $3.90 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 103,382 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 its 50-day moving average of $4.13 a share to $4.35, or even $4.45 to its 200-day moving average of $4.64 a share.

Kindred Biosciences

My final stock with some decent insider buying is biopharmaceutical player Kindred Biosciences (KIN) , which focuses on the development of therapies for pets. Insiders are buying this stock into major strength, since shares have exploded up by 72.4% over the last six months.

Kindred Biosciences has a market cap of $129 million and an enterprise value of $68 million. This stock trades at a fair valuation, with a price-to-book of 2.07. Its estimated growth rate for next year is 13.10, and for next year its pegged at -12.6%. This is a cash-rich company, since the total cash position on its balance sheet is $60.48 million and its total debt is zero.

A beneficial owner just bought 131,500 shares, or about $696,000 worth of stock, at $5.30 per share. That same beneficial owner also just bought 1,690,000 shares, or about $10.47 million worth of stock, at $6.20 per share.

From a technical perspective, Kindred Biosciences is currently trending above both its 50-day and 20-day moving averages, which is bullish. This stock has been uptrending strong over the last month or so, with shares moving higher off its low of $4.15 a share to its recent high of $7.10 a share. During that uptrend, shares of Kindred Biosciences have been consistently making higher lows and higher highs, which is bullish technical price action. That uptrend has now pushed this stock within range of triggering a big breakout trade above some past overhead resistance levels.

If you're bullish on Kindred Biosciences, then I would look for long-biased trades as long as this stock is trending above some near-term support levels at $6.20 to $5.80 a share or above its 20-day moving average of $5.33 a share and then once it breaks out above its 52-week high of $7.10 a share to some past resistance at $7.91 a share with volume that registers near or above its three-month average action of 118,845 shares. If that breakout kicks off soon, then this stock will set up to re-fill some of its previous gap-down-day zone from December of 2014 that started near $9 a share.

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