DELAFIELD, 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.

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.

Liquidity Services

One stock that insiders are in love with here is Liquidity Services (LQDT), which operates online auction marketplaces for sellers and buyers of surplus, salvage and scrap assets in the U.S. Insiders are buying this stock into notable strength, since shares are up sharply by 11% so far in 2014.

Liquidity Services has a market cap of $829 million and an enterprise value of $704 million. This stock trades at a fair valuation, with a trailing price-to-earnings of 19.98 and a forward price-to-earnings of 14.30. Its estimated growth rate for this year is -7.4%, and for next year it's pegged at 10.5%. This is a cash-rich company, since the total cash position on its balance sheet is $101.49 million and its total debt is zero.

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A director just bought 50,000 shares, or about $1.24 million worth of stock, at $24.91 per share.

From a technical perspective, LQDT 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 over the last two months and change, with shares moving higher from its low of $20.37 to its recent high of $26.29 a share. During that move, shares of LQDT have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of LQDT within range of triggering a near-term breakout trade.

If you're bullish on LQDT, then I would look for long-biased trades as long as this stock is trending above some near-term support at $24 or above its 50-day at $22.81 and then once breaks out above some near-term overhead resistance $26.29 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 613,346 shares. If that breakout hits soon, then LQDT will set up to re-test or possibly take out its next major overhead resistance levels at $28.25 to its 200-day moving average of $28.69 a share. Any high-volume move above those levels will then give LQDT a chance to tag $32 to $34 a share.

Kinder Morgan

An energy player that insiders are loading up on here is Kinder Morgan (KMI), which operates as a midstream and energy company in North America. Insiders are buying this stock into notable weakness, since shares are off by 11% over the last six months.

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Kinder Morgan has a market cap of $33 billion and an enterprise value of $73 billion. This stock trades at a fair valuation, with a trailing price-to-earnings of 28.31 and a forward price-to-earnings of 21.91. Its estimated growth rate for this year is 20.9%, and for next year it's pegged at 7.2%. This is not a cash-rich company, since the total cash position on its balance sheet is $598 million and its total debt is $36.19 billion. This stock currently sports a dividend yield of 5.1%.

The CEO just bought 199,165 shares, or about $6.39 million worth of stock, at $32.09 per share.

From a technical perspective, KMI is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been downtrending over the last two months, with shares moving lower from its high of $36.09 to its recent low of $31.45 a share. During that move, shares of KMI have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of KMI have now started to bounce off its recent low of $31.45 a share.

If you're in the bull camp on KMI, then I would look for long-biased trades as long as this stock is trending above its recent low of $31.45 and then once it breaks out above its 50-day at $34.41 and its 200-day at $35.66 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 6.64 million shares. If we get that move soon, then KMI will set up to re-test or possibly take out its next major overhead resistance levels at $39 to $40 a share.

Onconova Therapeutics

A biopharmaceutical player that insiders are jumping into here is Onconova Therapeutics (ONTX), which is focused on discovering and developing small molecule drug candidates to treat cancer. Insiders are buying this stock into major weakness, since shares are off big by 66% over the last six months.

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Onconova Therapeutics has a market cap of $189 million and an enterprise value of $70 million. This stock trades at a premium valuation, with a price-to-sales of 33.64 and a price-to-book of 2.08. Its estimated growth rate for next year is 48.5%. This is a cash-rich company, since the total cash position on its balance sheet is $116.60 million and its total debt is zero.

A director just bought 143,500 shares, or about $1.21 million worth of stock, at $8.03 to $8.91 per share.

From a technical perspective, ONTX is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock recently gapped down sharply from around $14 to $7.85 a share with heavy downside volume. Following that move, shares of ONTX have now started to rebound off that $7.75 low and it's quickly moving within range of triggering a near-term breakout trade.

If you're bullish on ONTX, then I would look for long-biased trades as long as this stock is trending above some near-term support $8.50 a share and then once it breaks out above some near-term overhead resistance at $9.34 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 356,248 shares. If that breakout materializes soon, then ONTX will set up to re-fill some of its previous gap-down-day zone that started near $14.

Datawatch

One technology stock that insiders are active in here is Datawatch (DWCH), which designs, develops, markets and distributes business computer software products in the U.S. and internationally. Insiders are buying this stock into solid strength, since shares are up 41% over the last six months.

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Datawatch has a market cap of $280 million and an enterprise value of $272 million. This stock trades at a fair valuation, with a price-to-sales of 8.80 and a price-to-book of 5.85. Its estimated growth rate for this year is -15.9%, and for next year it's pegged at 72.6%. This is barley a cash-rich company, since the total cash position on its balance sheet is $7.97 million and its total debt is $3.86 million.

A director just bought 35,000 shares, or about $997,000 million worth of stock, at $28.50 per share.

From a technical perspective, DWCH is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending strong over the last few weeks, with shares moving higher from its low of $25.05 to its recent high of $34.28 a share. During that uptrend, shares of DWCH have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of DWCH within range of triggering a near-term breakout trade.

If you're bullish on DWCH, then I would look for long-biased trades as long as this stock is trending above its 50-day at $31.67 or above more support at $30 and then once it breaks out above some near-term overhead resistance levels at $34.28 to $36.13 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 98,758 shares. If that breakout hits soon, then DWCH will set up to re-test or possibly take out its next major overhead resistance level at its 52-week high of $38.70 a share.

Endeavour International

One final stock with some large insider buying is Endeavour International (END), an independent oil and gas company, which engages in the acquisition, exploration, and development of energy reserves and resources in the United Kingdom North Sea and the U.S. onshore. Insiders are buying this stock into modest strength, since shares are up 9% over the last three months.

Endeavour International has a market cap of $235 million and an enterprise value of $1.05 billion. This stock trades at a reasonable valuation, with a price-to-sales of 0.71 and a price-to-book of 4.90. Its estimated growth rate for this year is 44.9%, and for next year it's pegged at 39.8%. This is not a cash-rich company, since the total cash position on its balance sheet is $60.36 million and its total debt is $867.93 million.

A beneficial owner just bought 864,000 shares, or about $5.48 million worth of stock, at $6.29 to $6.50 per share.
From a technical perspective, END is currently trending above its 200-day moving average and below its 50-day moving average, which is neutral trendwise. This stock has been downtrending badly for the last month, with shares moving lower from its high of $7.50 to its recent low of $4.84 a share. During that downtrend, shares of END have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of END have started to find some buying interest right around its 200-day moving average of $5.01 a share.

If you're bullish on END, then look for long-biased trades as long as this stock is trending above its 200-day at $5.01 or above more support at $4.84 and then once it breaks out above its 50-day at $5.81 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 552,975 shares. If that breakout triggers soon, then END will set up to re-test or possibly take out its next major overhead resistance levels at $6.45 to $7.

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.