Stock Quotes in this Article: AON, CNX, HOLX, MUR, RGDO

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, it's 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 five stocks whose insiders have been doing some big buying per SEC filings.

Regado Biosciences

One biopharmaceutical player that insiders are jumping into here is Regado Biosciences (RGDO), which focuses on the discovery and development of antithrombotic drug systems for acute and sub-acute cardiovascular and other indications. Insiders are buying this stock into notable strength, since shares are up 19% so far in 2014.

Regado Biosciences has a market cap of $127 million and an enterprise value of $81 million. This stock trades at a reasonable valuation, with a price-to-book of 2.55. Its estimated growth rate for next year is 1.8%. This is a cash-rich company, since the total cash position on its balance sheet is $43.46 million and its total debt is just $4.41 million.

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A beneficial owner just bought 400,000 shares, or $2 million worth of stock, at $5 per share.

From a technical perspective, RGDO is currently trending above its 50-day moving average of $5.52 a share, which is bullish. This stock has been uptrending over the last two months and change, with shares moving higher from its low of $4.56 to its recent high of $6.80 a share. During that uptrend, shares of RGDO have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of RGDO within range of triggering a near-term breakout trade.

If you're bullish on RGDO, then I would look for long-biased trades as long as this stock is trending above some key near-term support levels at $5.30 or at $5 and then once breaks out above some near-term overhead resistance levels at $6.75 to $6.80 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 29,842 shares. If that breakout hits soon, then RGDO will set up to re-test or possibly take out its next major overhead resistance levels at $7.50 to $8, or even $8.50 a share.

Aon

An insurance player that insiders are active in here is Aon (AON), which provides risk management services, insurance and reinsurance brokerage, and human resource consulting and outsourcing services worldwide. Insiders are buying this stock into modest strength, since shares are up 6% over the last three months.

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Aon has a market cap of $25 billion and an enterprise value of $28 billion. This stock trades at a reasonable valuation, with a trailing price-to-earnings of 23.72 and a forward price-to-earnings of 14.34. Its estimated growth rate for this year is 7.6%, 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 $1 million and its total debt is a whopping $4.39 billion.

A director just bought 30,000 shares, or about $2.31 worth of stock, at $77.31 per share.

From a technical perspective, AON is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock recently spiked higher back above its 50-day moving average of $81.69 a share. That spike is quickly pushing shares of AON within range of triggering a big breakout trade.

If you're in the bull camp on AON, then I would look for long-biased trades as long as this stock is trending above its 50-day or above $80 and then once it breaks out above its 52-week high at $84.63 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 1.46 million shares. If that breakout triggers soon, then AON will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $90 to $95 a share.

Hologic

A health care player that insiders are snapping up a large amount of stock in here is Hologic (HOLX), which develops, manufactures and supplies diagnostics products, medical imaging systems and surgical products for women. Insiders are buying this stock into modest weakness, since shares are down by 2.6% so far in 2014.

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Hologic has a market cap of $5.9 billion and an enterprise value of $9.5 billion. This stock trades at a reasonable valuation, with a forward price-to-earnings of 14.62. Its estimated growth rate for this year is -8.7%, and for next year it's pegged at 8.8%. This is not a cash-rich company, since the total cash position on its balance sheet is $448.64 million and its total debt is a whopping $4.30 billion.

The CEO just bought 198,900 shares, or about $4.13 million worth of stock, at $20.75 to $20.81 per share.

From a technical perspective, HOLX is currently trending above its 200-day moving average and just below its 50-day moving average, which is neutral trendwise. This stock has been uptrending a bit over the last few weeks, with shares moving higher from its low of $19.91 to its intraday high of $21.78 a share. During that uptrend, shares of HOLX have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of HOLX within range of triggering a near-term breakout trade.

If you're bullish on HOLX, then I would look for long-biased trades as long as this stock is trending above some near-term support at $21 and then once it breaks out above its 50-day moving average at $21.87 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 volume of 4.35 million shares. If that breakout hits soon, then HOLX will set up to re-test or possibly take out its next major overhead resistance levels at $22.72 to its 52-week high at $23.24 a share. Any high-volume move above those levels will then give HOLX a chance to tag $24 to $25 a share.

Consol Energy

One energy player that insiders are in love with is Consol Energy (CNX), which is a producer of coal and natural gas for global energy and raw material markets, which include the electric power generation industry and the steelmaking industry. Insiders are buying this stock into solid strength, since shares are up by 21% over the last six months.

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Consol Energy has a market cap of $8.8 billion and an enterprise value of $11.5 billion. This stock trades at a reasonable valuation, with a trailing price-to-earnings of 13.38 and a forward price-to-earnings of 21.22. Its estimated growth rate for this year is -60.2%, and for next year it's pegged at 79.2%. This is not a cash-rich company, since the total cash position on its balance sheet is $327.42 million and its total debt is a whopping $3.18 billion. This stock currently sports a dividend yield of 1.5%.

A director just bought30,000 shares, or about $1.10 million worth of stock, at $36.71 per share.

From a technical perspective, CNX is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has uptrending strong over the last six months, with shares moving higher from its low of $30.02 to its recent high of $39.51 a share. During that uptrend, shares of CNX have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of CNX within range of triggering a big breakout trade.

If you're bullish on CNX, then I would look for long-biased trades as long as this stock is trending above its 50-day at $37.39 or above its 200-day at $34.16 and then once it breaks out above its 52-week high at $39.57 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 volume of 2.17 million shares. If that breakout hits soon, then CNX will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $45 to $50 a share.

Murphy Oil

One final stock with large insider buying is Murphy Oil (MUR), a worldwide oil and gas exploration and production company with retail and wholesale gasoline marketing operations in the U.S. and refining and marketing operations in the U.K. Insiders are buying this stock into weakness, since shares are off by 19% over the last six months.

Murphy Oil has a market cap of $10.6 billion and an enterprise value of $12.7 billion. This stock trades at a reasonable valuation, with a trailing price-to-earnings of 9.67 and a forward price-to-earnings of 11.25. Its estimated growth rate for this year is 21.5%, and for next year it's pegged at -10.5%. This is not a cash-rich company, since the total cash position on its balance sheet is $750.16 million and its total debt is $2.94 billion.

A director just bought 30,000 shares, or about $1.7 million worth of stock, at $56.65 to $56.70 per share.
From a technical perspective, MUR 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 two months and change, with shares falling from its high of $66.20 to its recent low of $54.67 a share. During that downtrend, shares of MUR have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of MUR have now started to bounce higher off that $54.67 low and it's quickly moving within range of triggering a near-term breakout trade.

If you're bullish on MUR, then look for long-biased trades as long as this stock is trending above support at $56 or above its recent low of $54.67 and then once it breaks out above some near-term overhead resistance levels at $58.28 to its 200-day moving average at $59.03 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 1.56 million shares. If that breakout triggers soon, then MUR will set up to re-test or possibly take out its next major overhead resistance levels at its 50-day moving average of $61.91 to $63 to $64 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.