Stock Quotes in this Article: CLUB, CO, NATR, PHH, TPH

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 it 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 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 -- and 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.

TRI Pointe Homes

One residential construction player that insiders are snapping up a large amount of stock in is TRI Pointe Homes (TPH), which designs, constructs and sells single-family homes in communities. Insiders are buying this stock into major weakness, since shares are down by 25% so far in 2014.

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TRI Pointe Homes has a market cap of $469 million and an enterprise value of $614 million. This stock trades at a cheap valuation, with a trailing price-to-earnings of 24 and a forward price-to-earnings of 11.6. Its estimated growth rate for this year is 96%, and for next year it's pegged at 29.6%. This is not a cash-rich company, since the total cash position on its balance sheet is $32.05 million and its total debt is $176.93 million.

A beneficial owner just bought 1.15 million shares, or about $17.82 million worth of stock, at $15.39 to $15.54 per share.

From a technical perspective, TPH 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 and change, with shares moving lower from its high of $19.56 to its recent low of $14.71 a share. During that downtrend, shares of TPH have been consistently making lower highs and lower lows, which is bearish technical price action.

If you're bullish on TPH, then I would look for long-biased trades as long as this stock is trending above that recent low of $14.71 and then once breaks out above some near-term overhead resistance levels at $15 to $15.50 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 2.46 million shares. If that breakout hits soon, then TPH will set up to re-test or possibly take out its next major overhead resistance levels at its 50-day moving average of $15.97 to its 200-day moving average of $16.86 a share. Any high-volume move above those levels will then give TPH a chance to tag $17.15 to $17.45, or even $18 a share.

PHH

Another credit services player that insiders are loading up on here is PHH (PHH), which provides outsourced mortgage and fleet management services in the U.S. and Canada. Insiders are buying this stock into modest strength, since shares are up 1.7% over the last six months.

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PHH has a market cap of $1.4 billion and an enterprise value of $5.6 billion. This stock trades at a reasonable valuation, with a forward price-to-earnings of 37 and a trailing price-to-earnings of 36. Its estimated growth rate for this year is -129.1%, and for next year it's pegged at 211.7%. This is not a cash-rich company, since the total cash position on its balance sheet is $1.20 billion and its total debt is just $5.45 billion.

A beneficial owner just bought 513,780 shares, or about $12.25 million worth of stock, at $23.84 to $23.96 per share.

From a technical perspective, PHH is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending a bit for the last few weeks, with shares moving higher from its low $22.13 to its recent high of $24.50 a share. During that move, shares of PHH have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of PHH within range of triggering a near-term breakout trade.

If you're in the bull camp on PHH, then I would look for long-biased trades as long as this stock is trending above its 50-day at $23.34 and then once it breaks out above some near-term overhead resistance levels at $24.50 to $24.84 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 1.58 million shares. If that breakout materializes soon, then PHH will set up to re-test or possibly take out its next major overhead resistance levels at $26.02 to its 52-week high at $27.13 a share.

Nature's Sunshine Products

One natural health and wellness player that insiders are active in here is Nature's Sunshine Products (NATR), which is primarily engaged in the manufacture and direct sale of nutritional and personal care products worldwide. Insiders are buying this stock into decent strength, since shares are up 20% over the last three months.

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Nature's Sunshine Products has a market cap of $263 million and an enterprise value of $201 million. This stock trades at a cheap valuation, with a trailing price-to-earnings of 12 and a forward price-to-earnings of 13.4. Its estimated growth rate for this year is 26.2%, and for next year it's pegged at -11.1%. This is a cash-rich company, since the total cash position on its balance sheet is $73.48 million and its total debt is $11.42 million. This stock currently sports a dividend yield of 2.5%.

A beneficial owner just bought 7,500 shares, or about $122,000 worth of stock, at $16.16 to $16.29 per share.

From a technical perspective, NATR 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 two months and change, with shares moving higher from its low of $12.95 to its recent high of $18.37 a share. During that move, shares of NATR have been making mostly higher lows and higher highs, which is bullish technical price action.

If you're bullish on NATR, then I would look for long-biased trades as long as this stock is trending above its 200-day moving average of $15.98 or above its 50-day at $15.14 and then once it breaks out above some near-term overhead resistance levels at $17 to $17.35 a share and then once it clears more key resistance levels at $18.37 to $18.41 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 volume of 36,510 shares. If that breakout triggers soon, then NATR will set up to re-test or possibly take out its next major overhead resistance level at its 52-week high of $20.15 a share. Any high-volume move above that level will then give NATR a chance to trend higher towards $25 a share.

Town Sports International

One sporting activities player that insiders are jumping into here is Town Sports International (CLUB), which owns and operates fitness clubs in the Northeast and Mid-Atlantic regions of the U.S. Insiders are buying this stock into major weakness, since shares are down huge in 2014 by 54%.

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Town Sports International has a market cap of $160 million and an enterprise value of $401 million. This stock trades at a reasonable valuation, with a trailing price-to-earnings of 38 and a forward price-to-earnings of 74. Its estimated growth rate for this year is -119.6%, and for next year it's pegged at 200%. This is not a cash-rich company, since the total cash position on its balance sheet is $76.17 million and its total debt is $314.87 million. This stock currently sports a dividend yield of 11.1%.

A beneficial owner just bought 70,000 shares, or about $455,000 worth of stock, at $6.50 to $6.56 per share.

From a technical perspective, CLUB is currently trending above its 50-day moving average and well below its 200-day moving average, which is neutral trendwise. This stock recently formed a double bottom chart pattern at $5.65 to $5.69 a share. Following that bottom, shares of CLUB have started to uptrend and move back above its 50-day moving average. That move is starting to push shares of CLUB within range of triggering a near-term breakout trade above some key overhead resistance levels.

If you're bullish on CLUB, then I would look for long-biased trades as long as this stock is trending above its 50-day moving average of $6.16 and then once it breaks out above some near-term overhead resistance levels at $7 to $7.19 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 243,716 shares. If that breakout triggers soon, then CLUB will set up to re-test or possibly take out its next major overhead resistance levels at $8 to $8.50, or even $9 to $9.36 a share.

China Cord Blood

One more stock with some decent insider buying is China Cord Blood (CO), which primarily engages in the provision of umbilical cord blood storage and ancillary services in the People's Republic of China. Insiders are buying this stock into solid strength, since shares are up by 20% so far in 2014.

China Cord Blood has a market cap of $353 million and an enterprise value of $170 million. This stock trades at a reasonable valuation, with a trailing price-to-earnings of 20 and a forward price-to-earnings of 15. Its estimated growth rate for this year is -11.5%, and for next year it's pegged at 39.1%. This is a cash-rich company, since the total cash position on its balance sheet is $303.37 million and its total debt is $134.98 million.

A beneficial owner just bought 50,000 shares, or $236,000 worth of stock, at $4.73 per share.

From a technical perspective, CO is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending over the last few weeks, with shares moving higher from its low of $4.12 to its recent high of $4.88 a share. During that move, shares of CO have been making mostly higher lows and higher highs, which is bullish technical price action. That uptrend is coming after shares of CO recently plunged lower with heavy downside volume from $5.40 to that $4.12 low.

If you're bullish on CO, then look for long-biased trades as long as this stock is trending above some near-term support at $4.61 or above that recent low of $4.12 and then once it breaks out above some near-term overhead resistance at $4.88 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 144,647 shares. If that breakout triggers soon, then CO will set up to re-test or possibly take out its next major overhead resistance levels at $5.40 to its 52-week high at $5.70 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.