5 Stocks Insiders Are Loading Up On

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 they might need the cash to fund a charity. Sometimes they sell as part of a planned program that they have put in place for diversification purposes.

Insiders, however, usually buy their own shares for one reason only: They think the stock is cheap and has tremendous upside.

Recently, a number of companies' corporate insiders have bought stock. These insiders are finding some value in this market, which warrants a closer look at these names.

Cara Therapeutics

One biopharmaceutical player that insiders are active in here is Cara Therapeutics (CARA) , which is focused on developing and commercializing chemical entities designed to alleviate pain and pruritus by focusing on kappa opioid receptors.

Cara Therapeutics has a market cap of $480 million. This stock trades at a premium valuation, with a price-to-book of 9.47. Its estimated growth rate for this year is -5.2%, and for next year it's pegged at 0.90%. This is a cash-rich company, since its total cash position is $58.28 million and its total debt is zero.

A beneficial owner just bought 500,000 shares, or $9.09 million worth of stock, at $18.19 per share.

If you're bullish on Cara Therapeutics, then I would look for long-biased trades as long as this stock is trending above its 20-day at $16.95 or above its 50-day at $16.13 and then once it breaks out above resistance at $18 to $19 with volume near or above its three-month average of 2.14 million shares. Some possible upside targets off that breakout are its 52-week high of $20.90 to $25 a share.

Continental Resources

Another energy player that insiders are jumping into here is Continental Resources (CLR) , which explores for, develops, and produces crude oil and natural gas properties in the north, south, and east regions of the U.S.

Continental Resources has a market cap of $17.2 billion. This stock trades at a reasonable valuation, with a forward price-to-earnings of 39.8. Its estimated growth rate for this year is 163.6%, and for next year it's pegged at 108.9%. This is not a cash-rich company, since its total cash position is $16.64 million and its total debt is $6.58 billion.

The CEO just bought 32.985 shares, or $1.41 million worth of stock, at $42.90 per share.

If you're bullish on Continental Resources, I would look for long-biased trades if this stock is trending above its 50-day at $46.75 or its 20-day at $44.27 and then once it breaks out above its 200-day at $48.23 to more near-term resistance levels at $48.29 to $49.36 with volume near or above its three-month average of 2.60 million shares. Some possible upside targets off that breakout are $52 to $53, or even $55 to $60 a share.

National General Holdings

One financial player insiders are active in here is National General Holdings (NGHC) , which provides personal and commercial automobile, supplemental health, homeowners and umbrella, and other niche insurance products in the U.S.

National General Holdings has a market cap of $2.5 billion. This stock trades at a cheap valuation, with a forward price-to-earnings of 9.9. Its estimated growth rate for this year is 32.5%, and for next year it's pegged at 16.7%. This is not a cash-rich company, since its total cash position is $304.78 million and its total debt is $838.24 million.

The CEO just bought 31,600 shares, or $724,000 worth of stock, at $22.89 to $23 per share.

If you're in the bull camp on National General Holdings, I would look for long-biased trades if this stock is trending above its 200-day at $22.79 and once it breaks out above resistance levels at $23.89 to its 50-day at $24.18 and then above $24.26 to $25.03 with volume near or above its three-month average of 212,993 shares. Some possible upside targets off that breakout are its 52-week high of $26.99 to $30 a share.

Ford

One automaker that insiders are in love with here is Ford (F) , which designs, manufactures, markets, and services automobiles in North America, South America, Europe, the Middle East and Africa, and the Asia Pacific.

Ford has a market cap of $45 billion. This stock trades at a fair valuation, with a forward price-to-earnings of 6.79. Its estimated growth rate for this year is -9.7%, and for next year it's pegged at 5%. This is not a cash-rich company, since its total cash position is $27.47 billion and its total debt is $142.97 billion.

A director just bought 171,379 shares, or $1.99 million worth of stock, at $11.67 per share.

If you're bullish on Ford, I would look for long-biased trades if this stock is trending above some near-term support at $11.28 and then once it breaks out above resistance at $11.50 to $11.70 and then above $11.80 with volume near or above its three-month average of 38.79 million shares. Some possible upside targets off that breakout are its 20-day at $11.96 to its 200-day at $12.17, or its 50-day at $12.30 to $12.70 a share.

Tesla

My final stock with some huge insider buying is automaker Tesla (TSLA) , which designs, develops, manufactures, and sells electric vehicles and energy storage products in the U.S., China, Norway, and internationally

Tesla has a market cap of $4.74 billion. This stock trades at a fair valuation, with a forward price-to-earnings of 114.9. Its estimated growth rate for this year is 43.2%, and for next year its pegged at 260.7%. This is not a cash-rich company, since its total cash position is $3.39 billion and its total debt is $8.59 billion.

The CEO just bought 95,420 shares, or $25 million worth of stock, at $262 per share.

If you're bullish on Tesla, I would look for long-biased trades if this stock is trending above some near-term support at $285 or $275 and then once it breaks out above its 52-week high of $304.81 with volume near or above its three-month average of 5.38 million shares. Some possible upside targets off that breakout are $310 to $315, or even $320 a share.

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

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