Stock Quotes in this Article: ALXA, PNY, SD, WFT, AMRS

WINDERMERE, Fla. (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.

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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, its large 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 it’s 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. Here’s a look at some stocks where insiders have been doing some big buying in per SEC filings.

SandRidge Energy

One independent natural gas and oil player that insiders are buying a huge amount of stock in here is SandRidge Energy (SD), which concentrates on exploration, development and production activities. Insiders are buying this stock into some modest weakness, since shares are down just 10.6% in the last three months.

SandRidge Energy has a market cap of $2.99 billion and an enterprise value of $6.65 billion. This stock trades at a premium valuation, with a trailing price-to-earnings of 697. Its estimated growth rate for this year is 1,500%, and for next year it’s pegged at -268.8%. This is not a cash-rich company, since the total cash position on its balance sheet is $673.68 million and its total debt is a whopping $4.31 billion.

A beneficial owner just bought 4,975,000 shares, or about $30.81 million worth of stock, at $6.10 to $6.23 per share. That same beneficial owner also just bought 3,025,000 shares, or about $18.89 million worth of stock, at $6.24 to $6.25 per share.

From a technical perspective, SD is currently trending above its 50-day moving average and just below its 200-day moving average, which is neutral trendwise. This stock has been trending sideways for the last few weeks, with shares moving between $5.96 on the downside and $6.99 on the upside. A high-volume move outside of that range will likely lead to the next major trend for shares of SD.

If you’re bullish on SD, then I would look for long-biased trades if this stock manages to break out back above its 200-day moving average of $6.71 a share and back above resistance at $6.99 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 15.35 million shares. If that breakout triggers soon, then SD will set up to re-test or possibly take out its next major overhead resistance levels at $7.32 to $7.49 a share. Any move above those levels will then put $7.80 to $8.16 into focus for shares of SD.

Amyris

Another name in renewable energy space that insiders are loading up on here is Amyris (AMRS). This company applies its industrial synthetic biology technology platform to provide alternatives to select petroleum-sourced products used in specialty chemical and transportation fuel markets worldwide. Insiders are buying this stock into weakness, since shares are off by 26% during the last six months.

Amyris has a market cap of $188 million and an enterprise value of $250.89 million. This stock trades at a reasonable valuation, with a price-to-sales of 1.70 and a price-to-book of 2.39. Its estimated growth rate for this year is 32.7%, and for next year it’s pegged at 43%. This is not a cash-rich company, since the total cash position on its balance sheet is $44.43 million and its total debt is $109.90 million.

A director just bought 3.4 million shares, or about $9.99 million worth of stock, at $2.98 per share. Another director also just bought 1.7 million shares, or about $4.99 million worth of stock, at $2.98 per share.

From a technical perspective, AMRS is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending for the last month and change, with shares moving higher from a low of $2.16 a share to its recent high of $3.56 a share. During that move, shares of AMRS have been mostly making higher lows and higher highs, which is bullish technical price action. That move has now pushed AMRS within range of triggering a near-term breakout trade.

If you’re in the bull camp on AMRS, then I would look for long-biased if this stock manages to break out above some near-term overhead resistance levels at $3.41 to $3.56 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 307,377 shares. If that breakout hits soon, then AMRS will set up to re-test or possibly take out its next major overhead resistance levels at $4.23 to $4.51 a share. Any move above those levels and more resistance at $4.56 a share will then put $6 into focus for shares of AMRS.

Weatherford International

One name in the oil well services complex that insiders are warming up to here is Weatherford International (WFT). This company is a global provider of products and services that span the drilling, evaluation, completion, production and intervention cycles of oil and natural gas wells. Insiders are buying this stock into modest weakness, since shares are down by 10.8% in the last six months.

Weatherford International has a market cap of $8.68 billion and an enterprise value of $17.10 billion. This stock trades at a cheap valuation, with a forward price-to-earnings of 10.71. Its estimated growth rate for this year is 2.9%, and for next year it’s pegged at 47.2%. This is not a cash-rich company, since the total cash position on its balance sheet is $365 million and its total debt is a whopping $8.91 billion.

A vice president just bought 40,000 shares, or about $423,000 worth of stock, at $10.59 per share. Another vice president also just bought 20,000 shares, or about $217,000 worth of stock, at $10.88 per share.

From a technical perspective, WFT is currently trending above its 50-day moving average and below its 200-day moving average, which is neutral trendwise. This stock has been uptrending strongly for the last month and change, with shares soaring from a low of $8.84 to its recent high of $11.58 a share. During that uptrend, shares of WFT have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed WFT within range of triggering a near-term breakout trade.

If you‘re bullish on WFT, then I would look for long-biased trades if this stock manages to break out above some near-term overhead resistance levels at $11.41 to $11.77 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 10.6 million shares. If that breakout hits soon, then WFT will set up to re-test or possibly take out its next major overhead resistance levels at $12.47 to $12.56 a share. Any move above those levels will then put $12.92 to $13.50 into focus for shares of WFT.

Alexza Pharmaceuticals

One biotechnology and drugs player that insiders are jumping into here is Alexza Pharmaceuticals (ALXA), which is focused on the research, development, and commercialization of novel proprietary products for the acute treatment of central nervous system conditions. Insiders are buying this stock into modest strength, since shares are up by 10.3% during the last six months.

Alexza Pharmaceuticals has a market cap of $78 million and an enterprise value $60 million. This stock trades at a premium valuation, with a price-to-sales of 14.86 and a price-to-book of 7.57. Its estimated growth rate for this year is 66.7%, and for next year it’s pegged at 38%. This is a cash-rich company, since the total cash position on its balance sheet is $25.51 million and its total debt is $7.99 million. After you back out the debt, this company has $17.52 million of total cash on its books.

A beneficial owner just bought 72,189 shares, or around $350,000 worth of stock, at $4.84 per share.

From a technical perspective, ALXA is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock recently gapped down from a high of $6.46 to around $4.75 a share with big downside volume. Following that move, shares of ALXA went on to hit a recent low of $4.62 a share, but the stock has now started to rebound and move within range of triggering a near-term breakout trade.

If you’re in the bull camp on ALXA, then I would look for long-biased trades as long as it’s trending above its 200-day moving average at $4.66, and then once it breaks out above its gap down day high of $5.44 with high volume. Look for a sustained move or close above $5.44 a share with volume that hits near or above its three-month average action of 815,923 shares. If that breakout triggers soon, then ALXA will set up to re-test or possibly take out its recent high of $6.46 a share. Any move above that level will then put $7.60 into focus for shares of ALXA.

Piedmont Natural Gas

The last stock to consider with some decent insider buying is natural gas player Piedmont Natural Gas (PNY), an energy services company whose principal business is the distribution of natural gas to residential, commercial, industrial and power generation customers in portions of North Carolina, South Carolina and Tennessee. This stock has traded virtually flat during the last six months, with shares down by just 1.2%.

Piedmont Natural Gas has a market cap of $2.32 billion and an enterprise value of $3.60 billion. This stock trades at a reasonable valuation, with a trailing price-to-earnings of 19.31 and a forward price-to-earnings of 17.62. Its estimated growth rate for this year is 4.8%, and for next year it’s pegged at 4.6%. This is not a cash-rich company, since the total cash position on its balance sheet is $2.12 million and its total debt is $1.34 billion.

A director just bought 13,000 shares, or about $398,000 worth of stock, at $30.69 per share.

From a technical perspective, PNY is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending strongly for the last month and change, with shares moving higher from a low of $28.24 to its recent high of $32.42 a share. During that uptrend, shares of PNY have been mostly making higher lows and higher highs, which is bullish technical price action. That move has now pushed PNY within range of triggering a near-term breakout trade.

If you’re bullish on PNY, then I would look for long-biased if this stock manages to break out above some near-term overhead resistance levels at $32.42 to $33.40 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 245,315 shares. If that breakout hits soon, then PNY will set up to re-test or possibly take out its 52-week high of $34.63 a share.

To see more stocks with notable insider buying, check out the Stocks With Big Insider Buying portfolio on Stockpickr.

-- Written by Roberto Pedone in Winderemere, Fla.

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At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Windermere, Fla., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including

CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.