Stock Quotes in this Article: APA, KSS, MIC, PMBC, 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.

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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 five stocks whose insiders have been doing some big buying per SEC filings.

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Macquarie

One infrastructure player that insiders are jumping into here is Macquarie (MIC), which owns, operates and invests in a group of infrastructure businesses that provide basic services, such as chilled water for building cooling and gas utility services to businesses and individuals primarily in the U.S. Insiders are buying this stock into strength, since shares are up 18% so far in 2013.

Macquarie has a market cap of $2.5 billion and an enterprise value of $3.6 billion. This stock trades at a premium valuation, with a trailing price-to-earnings of 187.52 and a forward price-to-earnings of 52.07. Its estimated growth rate for this year is 258.60%, and for next year it’s pegged at -1%. This not a cash-rich company, since the total cash position on its balance sheet is $141.38 million and its total debt is $1.18 billion.

The CEO just bought 66,900 shares, or about $681,000 worth of stock, at $51.13 per share.

From a technical perspective, MIC is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending strong for the last six months, with shares soaring higher from its low of $39.52 to its recent high of $54.93 a share. During that uptrend, shares of MIC have been consistently making higher lows and higher highs, which is bullish technical price action. That move is quickly pushing shares of MIC within range of triggering a near-term breakout trade.

If you’re bullish on MIC, then I would look for long-biased trades as long as this stock is trending above $52, and then once it breaks out above some near-term overhead resistance at $54.93 a share with high volume. Look for a sustained move or close above $54.93 with volume that registers near or above its three-month average action of 241,970 shares. If that breakout triggers, then MIC will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $60 to $62.

Amyris

Another company that insiders are buying a huge amount of stock in is Amyris (AMRS), which provides alternatives to petroleum-sourced products used in transportation fuel markets and chemicals. It is also sells ethanol and ethanol blended gasoline. Insiders are buying this stock into modest weakness, since shares are off by 5.4% so far in 2013.

Amyris has a market cap of $217 million and an enterprise value of $294 million. This stock trades at a reasonable valuation, with a price-to-sales of 2.95 and a price-to-book of 3.01. Its estimated growth rate for this year is 47.4%, and for next year it’s pegged at 45.9%. This is not a cash-rich company, since the total cash position on its balance sheet is $30.69 million and its total debt is $108.14 million

A director just bought 1.5 million shares, or about $4.99 million worth of stock, at $3.26 per share.

From a technical perspective, AMRS is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been downtrending for the last two months, with shares dropping from its high of $3.85 to its recent low of $2.56 a share. During that move, shares of AMRS have been mostly making lower highs and lower lows, which is bearish technical price action. That said, shares of AMRS have started to rebound off that $2.56 low and are now quickly moving within range of triggering a near-term breakout trade.

If you’re in the bull camp on AMRS, then look for long-biased as long as this stock is trending above its 50-day at $3.08 and then once it breaks out above its 200-day at $3.21 a share and above more resistance at $3.31 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 360,775 shares. If that breakout triggers, then AMRS will set up to re-test or possibly take out its next major overhead resistance levels at $3.85 to $4.15 a share.

Kohl’s

Another stock that insiders are jumping into here is Kohl’s (KSS), which operates family-oriented department stores. Insiders are buying this stock into modest strength, since shares are up 8.6% so far in 2013.

Kohl’s has a market cap of $10.3 billion and an enterprise value of $14.2 billion. This stock trades at a reasonable valuation, with a trailing price-to-earnings of 11.13 and a forward price-to-earnings of 9.63. Its estimated growth rate for this year is 5%, and for next year it’s pegged at 10%. This is not a cash-rich company, since the total cash position on its balance sheet is $537 million and its total debt is $4.55 billion.

A director just bought 2,500 shares, or about $113,000 worth of stock, at $45.38 per share.

From a technical perspective, KSS is currently trending just above its 50-day moving average and below its 200-day moving average, which is neutral trendwise. This stock has pulled back over the last few weeks, with shares dropping from its high of $49.34 to its recent low of $45.33 a share. Shares of KSS have now started to bounce off its 50-day moving average at $46.06 a share and are quickly moving within range of triggering a near-term breakout trade.

If you’re bullish on KSS, then look for long-biased trades as long as this stock is trending above its 50-day at $46.06 or above that recent low of $45.33 and then once it breaks out above its 200-day at $47.53 a share with high volume. Look for a sustained move or close above $47.53 with volume that registers near or above its three-month average action of 2.96 million shares. If that breakout triggers soon, then KSS will set up to re-test or possibly take out its next major overhead resistance levels at $49.34 to $52.

Pacific Mercantile Bancorp

A regional banking player that insiders are loading up on stock in here is Pacific Mercantile Bancorp (PMBC), a bank holding company that, through its wholly owned subsidiary, Pacific Mercantile Bank, is engaged in the commercial banking business in Southern California. Insiders are buying this stock into slight weakness, since shares are down by 7% so far in 2013.

Pacific Mercantile Bancorp has a market cap of $97 million and an enterprise value $40 million. This stock trades at a cheap valuation, with a price-to-sales of 1.60 and a price-to-book of 0.85. This is a cash-rich company, since the total cash position on its balance sheet is $130.02 million and its total debt is $72.53 million.

A beneficial owner and director just bought 2.2 million shares, or about $14.99 million worth of stock, at $6.75 per share.

From a technical perspective, PMBC is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been trending sideways for the last two months, with shares moving between $5.59 on the downside and $6.32 on the upside. A high-volume move above the upper-end of its recent range could lead to a breakout trade for shares of PMBC.

Traders should now look for long-biased trades in PMBC as long as it’s trending above its 50-day at $5.96, and then once it triggers a break out above some near-term overhead resistance levels at $6.24 to its 200-day at $6.46 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 17,102 shares. If that breakout triggers soon, then PMBC will set up to re-test or possibly take out its next major overhead resistance levels at $6.90 to $7.40 a share.

Apache

One more stock to consider with some decent insider buying is Apache (APA), an independent energy company that explores for, develops and produces natural gas, crude oil and natural gas liquids. It currently has exploration and production interests in six countries, divided into seven operating regions. Insiders are buying this stock into notable weakness, since shares are off by 13% in the last six months.

Apache has a market cap of $29 billion and an enterprise value of $42 billion. This stock trades at a cheap valuation, with a trailing price-to-earnings of 15.29 and a forward price-to-earnings of 7.43. Its estimated growth rate for this year is -4%, and for next year it’s pegged at 11%. This is not a cash-rich company, since the total cash position on its balance sheet is $160 million and its total debt is a whopping $12.34 billion.

A director just bought 3,000 shares, or about $228,000 worth of stock, at $76 per share. Another director also just bought 10,000 shares, or about $744,000 worth of stock, at $74.48 per share.

From a technical perspective, APA is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock recently failed right near its 50-day moving average of $78.21 a share and it’s now pulling back and trading at around 75 a share.

If you’re bullish on APA, then look for long-biased trades if the stock finds some buying interest near its previous support levels at $73.68 to $72.20 a share. Another way to play this stock is to wait until it trends back above its 50-day moving average of $78.21 a share with high volume. Look for a sustained move or close above $78.21 a share with volume that hits near or above its three-month average action of 3.41 million shares. If we get that move, then APA could trend back towards its 200-day at $82.03 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.