Stock Quotes in this Article: AIG, APA, CHK, MOSY, DXM

MADISON, Wis. (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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Chesapeake Energy

One energy player that insiders are buying up a large amount of stock in here is Chesapeake Energy (CHK), a natural gas and oil exploration and production company. Insiders are buying this stock into strength, since shares are up 27% so far in 2013.

Chesapeake Energy has a market cap of $14 billion and an enterprise value of $28 billion. This stock trades at a cheap valuation, with a forward price-to-earnings of 10.56. Its estimated growth rate for this year is 141%, and for next year it's pegged at 36%. This is not a cash-rich company, since the total cash position on its balance sheet is $33 million and its total debt is a whopping $13.63 billion. This stock sports a dividend yield of 1.7%.

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A director just bought 450,000 shares, or about $9.4 million worth of stock, at $20.89 per share.

From a technical perspective, CHK is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has just started to breakout above some near-term overhead resistance at $20.96 a share. That move is quickly pushing shares of CHK within range of triggering another major breakout trade.

If you're bullish on CHK, then I would look for long-biased trades as long as this stock is trending above $20.96 or above its 50-day at $19.98 and then once it breaks out above its 52-week high at $22.97 a share with high volume. Look for a sustained move or close above $22.97 with volume that hits near or above its three-month average action of 11.83 million shares. If we get that breakout soon, then CHK will set up to re-test or possibly take out its next major overhead resistance levels at $25.61 to $29 a share.

Apache

Another stock that insiders are jumping into here is Apache (APA), which explores, develops and produces natural gas, crude oil and natural gas liquids. Insiders are buying this stock into modest strength, since shares are up 8% so far in 2013.

Apache has a market cap of $33 billion and an enterprise value of $44 billion. This stock trades at a reasonable valuation, with a trailing price-to-earnings of 18.02 and a forward price-to-earnings of 8.83. Its estimated growth rate for this year is -8.4%, and for next year it's pegged at 10.3%. This is not a cash-rich company, since the total cash position on its balance sheet is $248 million and its total debt is a whopping $12.48 billion. This stock sports a dividend yield of 1%.

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The CEO just bought 10,000 shares, or about $836,000 worth of stock, at $83.69 per share.

From a technical perspective, APA 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 month and change, with shares soaring higher from its low of $67.91 to its intraday high of $85.49 a share. During that uptrend, shares of APA have been mostly making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of APA within range of triggering a major breakout trade.

If you're in the bull camp on APA, then look for long-biased as long as this stock is trending above $83.80 and then once it breaks out above some near-term overhead resistance at $86.11 high volume. Look for a sustained move or close above $86.11 a share with volume that registers near or above its three-month average action of 3.56 million shares. If that breakout triggers soon, then APA will set up to re-test or possibly take out its next major overhead resistance levels at $88.64 to $94.22 a share.

American International Group

A financial services player that insiders are active in here is American International Group (AIG), which is engaged in insurance and insurance-related activities in the U.S. and abroad. Insiders are buying this stock into notable strength, since shares are up 27% so far in 2013.

American International Group has a market cap of $66 billion and an enterprise value of $62 billion. This stock trades at a premium valuation, with a trailing price-to-earnings of 29.59 and a forward price-to-earnings of 10.86. Its estimated growth rate for this year is 6.9%, and for next year it's pegged at -29.78%. This is a cash-rich company, since the total cash position on its balance sheet is $49.11 billion and its total debt is $45.27 billion. After you back out the debt, this company has $3.84 billion of total cash on its balance sheet.

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A director just bought 10,000 shares, or about $452,000 worth of stock, at $45.20 per share.

From a technical perspective, AIG 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 $32 to its recent high of $46.45 a share. During that uptrend, shares of AIG have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of AIG within range of triggering a near-term breakout trade.

If you're bullish on AIG, then look for long-biased trades as long as this stock is trending above some key near-term support at $42 and then once it breaks out above its 52-week high at $46.45 a share with high volume. Look for a sustained move or close above $46.45 a share with volume that hits near or above its three-month average action of 17.14 million shares. If that breakout triggers soon, then AIG will set up to enter new 52-week high territory, which is bullish technical price action. Some possible upside targets off that breakout are $50 to $53 a share.

MoSys

A semiconductor stock that insiders are snapping up shares in here is MoSys (MOSY), which develops and sells integrated circuits for the high-speed networking, communications, storage and computing markets. Insiders are buying this stock into solid strength, since shares are up by 22% so far in 2013.

MoSys has a market cap of $173 million and an enterprise value $139 million. This stock trades at a premium valuation, with a price-to-sales of 28.8 and a price-to-book of 2.8. Its estimated growth rate for this year is 17.9%, and for next year it's pegged at 28.3%. This is a cash-rich company, since the total cash position on its balance sheet is $30.46 million and its total debt is zero.

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The CEO just bought 150,000 shares, or $1 million worth of stock, at $4.00 per share.

From a technical perspective, MOSY is currently above its 200-day moving average and right below its 50-day moving average, which is neutral trendwise. This stock has been trending sideways for the last two months, with shares moving between $3.88 on the downside and $4.97 on the upside. A high-volume move above the upper-end of that range could trigger a breakout trade for shares of MOSY.

If you're bullish on MOSY, then look for long-biased trades as long as this stock is trending above its 200-day at $3.81, then once it breaks out above some near-term overhead resistance levels at $4.39 to its 50-day at $4.45 a share and then once it clears more resistance at $4.87 to $4.97 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 202,421 shares. If that breakout triggers soon, then MOSY will set up to enter new 52-week-high territory above $4.97, which is bullish technical price action. Some possible upside targets off that move are $5.50 to $6 a share.

Dex Media

One more stock with some big insider buying is Dex Media (DXM), which provides local, social and mobile marketing solutions through direct relationships with local businesses under the Dex One and SuperMedia brands in the U.S. Insiders are buying this stock into big time strength, since shares are up 81% so far in 2013.

Dex Media has a market cap of $203 million and an enterprise value of $2 billion. This stock trades at a cheap valuation, with a price-to-sales of 0.15. This is not a cash-rich company, since the total cash position on its balance sheet is $138 million and its total debt is $1.96 billion.

A beneficial owner just bought 352,205 shares, or about $5.97 million worth of stock, at $16.91 to $17.07 per share.

From a technical perspective, DXM 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 month, with shares soaring higher from $10.01 to its recent high of $23.86 a share. During that uptrend, shares of DXM have been mostly making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of DXM within range of triggering a near-term breakout trade.

If you're bullish on DXM, then look for long-biased trades as long as this stock is trending above some key near-term support at $18.52 and then once it breaks out above some near-term overhead resistance levels at $22 to its 52-week high at $23.86 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 687,600 shares. If that breakout triggers soon, then DXM will set up to enter new 52-week-high territory above $23.86, which is bullish technical price action. Some possible upside targets off that move are $28 to $30 a share, or even $35 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 Madison, Wis.

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

Roberto Pedone, based out of Madison, Wis., 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.