Stock Quotes in this Article: DRRX, INWK, VVUS, ACW, ACRX

DELAFIELD, Wis. (Stockpickr) -- Corporate insiders sell their own companies' stock for a number of reasons.

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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/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.

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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.

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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.

Vivus

One biopharmaceuticals player that insiders are loading up on here is Vivus (VVUS), which is engaged in the development and commercialization of therapeutic products for large underserved markets, including obesity and related morbidities, such as sleep apnea and diabetes and men's sexual health. Insiders are buying this stock into notable weakness, since shares are down by 29% so far in 2013.

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Vivus has a market cap of $951 million and an enterprise value of $730 million. This stock trades at a premium valuation, with a price-to-sales of 22.77 and a price-to-book of 5.77. Its estimated growth rate for this year is -31.7, and for next year it's pegged at 29.9%. This is a cash-rich company, since the total cash position on its balance sheet is $346.45 million and its total debt is $209.64 million. After you back out the debt, VIVUS has a total of $136.81 million in cash on its books.

A director just bought 566,844 shares, or about $4.86 million worth of stock, at $8.52 to $8.78 per share.

From a technical perspective, VVUS is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been downtrending badly for the last four months, with shares moving lower from its high of $15.40 to its recent low of $8 a share. During that move, shares of VVUS have been mostly making lower highs and lower lows, which is bearish technical price action. That said, shares of VVUS have now started to rebound off that $8 low and it's quickly moving within range of triggering a near-term breakout trade.

If you're bullish on VVUS, then I would look for long-biased trades as long as this stock is trending above some near-term support at $8 and then once it breaks out above some near-term overhead resistance levels at $9.76 to $9.89 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 2.55 million shares. If that breakout hits soon, then VVUS will set up to re-test or possibly take out its next major overhead resistance levels at $11.44 to $11.64 a share, or even $12 to $13 a share.

InnerWorkings

Another commercial printing player that insiders are in love with here is InnerWorkings (INWK), which is a provider of managed print and promotional procurement solutions to corporate clients across a range of industries. Insiders are buying this stock into major weakness, since shares are off by 53% so far in 2013.

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InnerWorkings has a market cap of $323 million and an enterprise value of $365 million. This stock trades at a reasonable valuation, with a trailing price-to-earnings of 21.17 and a forward price-to-earnings of 21.17. Its estimated growth rate for this year is -70.7%, and for next year it's pegged at 150%. This is not a cash-rich company, since the total cash position on its balance sheet is $19.22 million and its total debt is a $91.50 million.

A beneficial owner just bought 508,800 shares, or above $3.06 million worth of stock, at $5.91 to $6.05 per share.

From a technical perspective, INWK is currently trending well below both its 50-day and 200-day moving averages, which is bearish. This stock recently gapped down sharply from $9.75 to $5.54 a share with heavy downside volume. Following that gap down, shares of INWK have now started to rebound off that $5.54 low and it's quickly moving within range of triggering a big breakout trade.

If you're in the bull camp on INWK, then I would look for long-biased trades as long as this stock is trending above its recent low of $5.54 and then once it breaks out above its gap down day high of $6.50 a share with high volume. Look for a sustained move or close above that level with volume that hits near or above its three-month average action of 441,968 shares. If that breakout hits soon, then INWK will set up to re-fill some of its previous gap down zone that started at $9.75 a share. Some possible upside targets at $7.50 to $8.50 a share.

AcelRx Pharmaceuticals

Another stock that insiders are active in here is AcelRx Pharmaceuticals (ACRX), which is engaged in the development and commercialization of innovative therapies for the treatment of acute and breakthrough pain. Insiders are buying this stock into modest strength, since shares are up 8.9% so far in 2013.

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AcelRx Pharmaceuticals has a market cap of $329 million and an enterprise value of $255 million. This stock trades at a premium valuation, with a price-to-sales of 88.49 and a price-to-book of 5.94. Its estimated growth rate for this year is 18.5%, and for next year it's pegged at 27.6%. This is a cash-rich company, since the total cash position on its balance sheet is $75.97 million and its total debt is $10.52 million.

A beneficial owner just bought 200,000 shares, or about $1.30 million worth of stock, at $6.50 to $6.52 per share. The same beneficial owner also just bought 155,000 shares, or about $1.06 million worth of stock, at $6.84 per share.

From a technical perspective, ACRX is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been downtrending badly for the last three months and change, with shares dropping sharply from its high of $13.50 to its recent low of $6.04 a share. During that move, shares of ACRX have been making mostly lower highs and lower lows, which is bearish technical price action.

If you're bullish on ACRX, then I would look for long-biased trades as long as this stock is trending above some key near-term support levels at $7 or at $6.50 and then once it takes out its 200-day at $8.13 and its 50-day at $9.12 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 volume of 675,918 shares. If we get that move soon, then ACRX will set up to re-test or possibly take out its next major overhead resistance levels at $9.45 to $11 a share.

Durect

One specialty pharmaceuticals player that insiders are jumping into here is Durect (DRRX), which develops pharmaceutical products based on its proprietary drug delivery technology platforms. Insiders are buying this stock into big time strength, since shares are up sharply by 58% so far in 2013.

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Durect has a market cap of $148 million and an enterprise value of $135 million. This stock trades at a premium valuation, with a price-to-sales of 10.42 and a price-to-book of 6.16. Its estimated growth rate for this year is -211.1%, and for next year it's pegged at -10%. This is a cash-rich company, since the total cash position on its balance sheet is $17.14 million and its total debt is zero.

The chairman of the board just bought 714,285 shares, or about $999,000 worth of stock, at $1.40 per share.

From a technical perspective, DRRX 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 76 cents per share to its recent high of $1.61 a share. During that move, shares of DRRX have been consistently making higher lows and higher highs, which is bullish technical price action.

If you're bullish on DRRX, then I would look for long-biased trades as long as this stock is trending above its 50-day at $1.37 or above more key near-term support at $1.20 and then once it breaks out above some near-term overhead resistance levels at $1.55 to $1.61 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 volume of 702,782 shares. If that breakout hits, then DRRX will set up to re-test or possibly take out its next major overhead resistance levels at $1.85 to $1.90 a share. Any high-volume moves above those levels will then give DRRX a chance to tag $2.30 a share.

Accuride

One final name with some large insider buying is Accuride (ACW), which is a manufacturer and supplier of commercial vehicle components in North America. Insiders are buying this stock into big time weakness, since shares are off by 37% during the last three months.

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Accuride has a market cap of $156 million and an enterprise value of $461 million. This stock trades at a reasonable valuation, with a price-to-sales of 0.19 and a price-to-book of 5.26. Its estimated growth rate for this year is 5.4, and for next year it's pegged at 59.8%. This is not a cash-rich company, since the total cash position on its balance sheet is $27.99 million and its total debt is $339.92 million.

A beneficial owner just bought 651,435 shares, or about $2.08 million worth of stock, at $3.15 per share.

From a technical perspective, ACW is currently trending well below both its 50-day and 200-day moving averages, which is bearish. This stock has been downtrending badly for the last three months and change, with shares plunging lower from its high of $6.88 to its recent low of $3.10 a share. During that downtrend, shares of ACW have been consistently making lower highs and lower lows, which is bearish technical price action. That move has now pushed shares of ACW into oversold territory, since its current relative strength index reading is 21.83. Oversold can always get more oversold, but it's also an area where a stock can make a powerful bounce higher from.

If you're bullish on ACW, then look for long-biased trades as long as this stock is trending above that low of $3.10 and then once it takes out some near-term overhead resistance levels at $3.40 to $3.60 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 320,183 shares. If we get that move soon, then ACW could see a powerful bounce higher that takes the stock back towards $4.40 to $5 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 Delafield, Wis.


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

Roberto Pedone, based out of Delafield, 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.