Stock Quotes in this Article: CACH, DKS, MBI, NS, TFM

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.

Dick's Sporting Goods

One sporting goods store player that insiders are snapping up a large amount of stock in here is Dick's Sporting Goods (DKS), which operates as a sports and fitness retailer primarily in the eastern U.S. Insiders are buying this stock into weakness, since shares have dropped 23% so far in 2014.

Dick's Sporting Goods has a market cap of $5.3 billion and an enterprise value of $5.2 billion. This stock trades at a fair valuation, with a forward price-to-earnings of 13.9. Its estimated growth rate for this year is 3.7%, and for next year it's pegged at 14.7%. This is a cash-rich company, since the total cash position on its balance sheet is $139.37 million and its total debt is just $6.82 million. This stock currently sports a dividend yield of 1.1%.

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The CEO just bought 115,000 shares, or about $4.89 million worth of stock, at $42.56 per share. A director also just bought 23,000 shares, or about $976,000 worth of stock, at $42.46 per share.

From a technical perspective, DKS is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock recently gapped down sharply from over $53 to below $43 with heavy downside volume. Following that move, shares of DKS went on to print a new 52-week low of $42.21 a share. Shares of DKS have now started rebound off that 52-week low and it's quickly moving within range of triggering a big breakout trade.

If you're bullish on DKS, then I would look for long-biased trades as long as this stock is trending above its 52-week low of $42.21 and then once breaks out above some resistance at $44.94 to its gap-down-day high of $46.17 a share with high volume. Look for a sustained move or close above those levels with volume that registers near or above its three-month average action of 1.93 million shares. If that breakout starts soon, then DKS will set up to re-fill some of its previous gap-down-day zone from mid-May that started near $53 a share.

The Fresh Market

Another grocery store player that insiders are loading up on here is The Fresh Market (TFM), which operates as a specialty food retailer in the U.S. Insiders are buying this stock into notable weakness, since shares have traded off by 19% so far in 2014.

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The Fresh Market has a market cap of $1.5 billion and an enterprise value of $1.4 billion. This stock trades at a fair valuation, with a trailing price-to-earnings of 35.28 and a forward price-to-earnings of 17.83. Its estimated growth rate for this year is 12.9%, and for next year it's pegged at 16.5%. This is not a cash-rich company, since the total cash position on its balance sheet is $19.12 million and its total debt is $34.17 million.

A director just bought 435,000 shares, or about $13.25 million worth of stock, at $30.04 to $30.44 per share.

From a technical perspective, TFM is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been uptrending a bit for the last few weeks, with shares moving higher from its 52-week low of $28.60 to its intraday high of $33.05 a share. During that uptrend, shares of TFM have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of TFM within range of triggering a big breakout trade.

If you're in the bull camp on TFM, then I would look for long-biased trades as long as this stock is trending above some near-term support levels round $31 or at $30 and then once it breaks out above Wednesday's intraday high of $33.05 to its 50-day moving average of $33.60 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 1.11 million shares. If that breakout triggers soon, then TFM will set up to re-fill some of its previous gap-down-day zone from early May that started near $37 a share.

NuStar Energy

One energy player that insiders are in love with here is NuStar Energy (NS), which is engaged in the terminalling, storage and marketing of petroleum products, as well as the transportation of petroleum products and anhydrous ammonia primarily in the U.S. and the Netherlands. Insiders are buying this stock into strength, since shares have trended higher by 15% so far in 2014.

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NuStar Energy L.P. has a market cap of $4.5 billion and an enterprise value of $7.1 billion. This stock trades at a reasonable valuation, with a forward price-to-earnings of 23.20. Its estimated growth rate for this year is 110.6%, and for next year it's pegged at 27.8%. This is not a cash-rich company, since the total cash position on its balance sheet is $42.60 million and its total debt is $2.71 billion. This stock currently sports a dividend yield of 7.5%.

A director just bought 85,000 shares, or about $4.90 million worth of stock, at $57.48 to $57.96 per share.

From a technical perspective, NS 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 moving higher from its low of $45.61 to its recent high of $59.38 a share. During that uptrend, shares of NS have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of NS within range of triggering a big breakout trade.

If you're bullish on NS, then I would look for long-biased trades as long as this stock is trending above its 50-day moving average of $56.20 and then once it breaks out above some near-term overhead resistance levels at $59.15 to its 52-week high at $59.45 a share with high volume. Look for a sustained move or close above those levels with volume that registers near or above its three-month average action of 462,972 shares. If that breakout materializes soon, then NS will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $65 to $70 a share.

MBIA

One financial player that insiders are active in here is MBIA (MBI), which provides financial guarantee insurance and related reinsurance, advisory and portfolio services for the public and structured finance markets, as well as asset management advisory services in the U.S. and internationally. Insiders are buying this stock into notable weakness, since shares are off by 17% over the last three months.

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MBIA has a market cap of $2.4 billion and an enterprise value of $8 billion. This stock trades at premium valuation, with a forward price-to-earnings of 48.66. Its estimated growth rate for this year is 32.6%, and for next year it's pegged at -85.4%. This is not a cash-rich company, since the total cash position on its balance sheet is $2.48 billion and its total debt is $8.20 billion.

The CEO just bought 62,165 shares, or about $728,000 worth of stock, at $11.69 to $11.72 per share.

From a technical perspective, MBI is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been trending sideways and consolidating for the last month, with shares moving between $11.48 on the downside and around $13 on the upside. Shares of MBI are spiking sharply higher here and the stock is quickly moving within range of triggering a near-term breakout trade above the upper-end of its recent sideways trading chart pattern.

If you're bullish on MBI, then I would look for long-biased trades as long as this stock is trending above some key near-term support at $11.48 and then once it breaks out above some near-term overhead resistance levels at $12.78 to $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 2.86 million shares. If that breakout starts soon, then MBI will set up to re-test or possibly take out its next major overhead resistance levels at $13.50 to 14 a share, or even $15 a share.

Cache

One final stock with some large insider buying is Cache (CACH), which operates as a mall-based and online woman's specialty retailer of apparel and accessories in the U.S. Insiders are buying this stock major weakness, since shares have plunged lower by 69% so far in 2014.

Cache has a market cap of $35 million and an enterprise value of $49 million. This stock trades at a fair valuation, with a price-to-sales of 0.17 and a price-to-book of 4.67. Its estimated growth rate for this year is -1.80%, and for next year it's pegged at 81.1%. This is not a cash-rich company, since the total cash position on its balance sheet is $806,000 and its total debt is $12.37 million.

A director just bought 285,715 shares, or about $500,000 worth of stock, at $1.75 per share.
From a technical perspective, CACH is currently trending well below both its 50-day and 200-day moving averages, which is bearish. This stock has been moving sideways and consolidating over the last month, with shares moving between $1.40 on the downside and $1.84 on the upside. Traders should now watch for a possible breakout trade for shares of CACH if this stock can manage to clear the upper-end of its recent sideways trading chart pattern with strong upside volume flows.

If you're bullish on CACH, then look for long-biased trades as long as this stock is trending above some near-term support at $1.40 and then once it breaks out above some near-term overhead resistance at $1.84 a share with high volume. Look for a sustained move or close above that level with volume that registers near or above its three-month average volume of 245,834 shares. If that breakout kicks off soon, then CACH will set up to re-test or possibly take out its next major overhead resistance levels at its 50-day moving average of $2.53 to $2.62 a share, or even $3 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.