Stock Quotes in this Article: ANTH, HBAN, KRO, LGND, NRP

WINDERMERE, Fla. (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.

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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.

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.

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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.

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 with big insider buying per SEC filings.

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Kronos Worldwide

A chemical manufacturing stock that insiders are buying is Kronos Worldwide (KRO), a global producer and marketer of value-added titanium dioxide pigments, or TiO2, a base industrial product used in a wide range of applications. Insiders are buying this stock into strength, since shares have spiked higher by 38% during the last three months.

Kronos Worldwide has a market cap of $2.2 billion and an enterprise value of $2.56 billion. This stock trades at a reasonable valuation, with a trailing price-to-earnings of 6.87 and a forward price-to-earnings of 15.16. Its estimated growth rate for this year is -27%, and for next year it’s pegged at -37.6%. This is not a cash-rich company, since the total cash position on its balance sheet is $110.90 million and its total debt is $437.60 million.

The chairman of the board and a director just bought 100,000 shares, or $1.98 million worth of stock, at $19.58 per share.

From a technical perspective, KRO 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 three months, with shares soaring from its low of $12.53 to its recent high of $20.52 a share. During that uptrend, shares of KRO have been consistently making higher lows and higher highs, which is bullish technical price action. That said, the stock has started to pullback of its recent high and move within range of its 50-day moving average at $17.61 a share.

If you’re bullish on KRO, then I would look for long-biased trades if this stock trades back down toward its 50-day at $17.61 or its 200-day at $16.90 a share and then holds around those levels. If KRO trades back down toward those key moving averages and finds buying interest, then traders can look for this stock to break out above some near-term overhead resistance levels at $20.15 to $20.52 with high volume.

Look for a sustained move or close above those breakout levels with volume that hits near or above its three-month average action of 698,618 shares. Some possible upside targets off that breakout are $24 to $25 a share.

Anthera Pharmaceuticals

Another name in the biotechnology and drugs complex that insiders are active in here is Anthera Pharmaceuticals (ANTH), which is focused on developing and commercializing products to treat serious diseases associated with inflammation, including cardiovascular and autoimmune diseases. Insiders are buying this stock into a steep decline, since shares are off by 39% during the last six months.

Anthera Pharmaceuticals has a market cap of $52 million and an enterprise value of $33 million. This stock trades at a premium valuation, with a price-to-book of 9.84. Its estimated growth rate for this year is 54.9%, and for next year it’s pegged at 68.7%. This is a cash-rich company, since the total cash position on its balance sheet is $42.46 million and its total debt is $22.62 million. After you back out the debt, this company has $19.84 million in cash on its books.

A director just bought 1.8 million shares, or about $1.14 million worth of stock, at 65 cents per share.

From a technical perspective, ANTH is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been downtrending over the last month, with shares dropping from its high of 84 cents to its recent low of 64 cents per share. During that downtrend, shares of ANTH have been mostly making lower highs and lower lows, which is bearish technical price action. That said, shares of ANTH have started to bounce off that 64 cents per share low and quickly moving within range of triggering a near-term breakout trade.

If you’re in the bull camp on ANTH, then I would look for long-biased if this stock manages to break out above its 50-day at 68 cents per share and then once it clears more overhead resistance at 70 to 72 cents per 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 1.6 million shares. If that breakout triggers soon, then ANTH will set up to re-test or possibly take out its next major overhead resistance levels at 80 to 84 cents per share. Any high-volume move above 84 cents per share will then put $1 to $1.17 into focus for shares of ANTH.

Ligand Pharmaceuticals

Another biotechnology and drugs player that insiders are buying up a decent amount of stock in is Ligand Pharmaceuticals (LGND), which is focused on drug discovery and early-stage development of pharmaceuticals. Insiders are buying this stock into some notable strength, since shares are up 30% in the last three months.

Ligand Pharmaceuticals has a market cap of $398 million and an enterprise value of $423 million. This stock trades at a premium valuation, with a trailing price-to-earnings of 137.66 and a forward price-to-earnings of 51.18. Its estimated growth rate for this year is -88.5%, and for next year it’s pegged at 550%. This is not a cash-rich company, since the total cash position on its balance sheet is $7.05 million and its total debt is $28.15 million.

A beneficial owner just bought 39,600 shares, or about $783,000 worth of stock, at $19.78 per share.

From a technical perspective, LGND 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 three months, with shares soaring from its low of $14.75 a share to its recent high of $21.75 a share. During that uptrend, shares of LGND have been consistently making higher lows and higher highs, which is bullish technical price action. Shares of LGND have recently sold off from that $21.75 high and moved back towards its 50-day moving average of $19.83 a share.

Traders who are bullish on LGND should now look for long-biased trades as long as it’s trending above some key near-term support at $19.03, and then once it manages to break out above some near-term overhead resistance levels at $20.99 to $21.75 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 153,792 shares. If that breakout hits soon, then LGND will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $25 to $27 a share.

Natural Resource Partners

One coal player that insiders are jumping into big here is Natural Resource Partners (NRP), which is engaged mainly in the business of owning and managing coal properties in the three coal-producing regions of the U.S.: Appalachia, the Illinois Basin and the Western U.S. Insiders are buying this stock into modest strength, since shares are up 3.6% in the last three months.

Natural Resource Partners has a market cap of $2.4 billion and an enterprise value $3.24 billion. This stock trades at a reasonable valuation, with a trailing price-to-earnings of 17.93 and a forward price-to-earnings of 12.62. Its estimated growth rate for this year is -9%, and for next year it’s pegged at -1.1%. This is not a cash-rich company, since the total cash position on its balance sheet is $122.42 million and its total debt is $939.27 million.

An officer just bought 756,914 shares, or around $14.99 million worth of stock, at $19.82 per share.

From a technical perspective, NRP 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 month, with shares soaring from its low of $17.30 to its recent high of $23.09 a share. During that uptrend, shares of NRP have been consistently making higher lows and higher highs, which is bullish technical price action. That move now has shares of NRP trending within range of triggering a major breakout trade.

Traders should now look for long-biased trades in NRP as long as it’s trending above its 200-day moving average of $20.71, and then once it manages to break out above some key overhead resistance levels at $23.09 to $24.47 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 390,049 shares. If that breakout triggers soon, then NRP will set up to re-test or possibly take out its next major overhead resistance levels at $26.09 to $27.40 a share. Keep in mind that it might be best to buy NRP off weakness back towards its 200-day since the stock is a bit overbought at current levels.

Huntington Bancshares

One more name to consider with some decent insider buying is Huntington Bancshares (HBAN), a multi-state financial holding company that provides various financial services through its subsidiary, the Huntington National Bank. Insiders are buying this stock into modest strength, since shares are up by 9.7% in the last three months.

Huntington Bancshares has a market cap of $5.87 billion and an enterprise value of $7.34 billion. This stock trades at a cheap valuation, with a trailing price-to-earnings of 9.80 and a forward price-to-earnings of 10.09. Its estimated growth rate for this year is -5.6%, and for next year it’s pegged at 3%. This is not a cash-rich company, since the total cash position on its balance sheet is $1.42 billion and its total debt is $2.95 billion.

The CEO and chairman of the board just bought 40,000 shares, or about $281,000 worth of stock, at $7.04 per share.

From a technical perspective, HBAN 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 three months, with shares soaring from its low of $5.77 a share to its recent high of $7.10 a share. During that uptrend, shares of HBAN have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of HBAN within range of triggering a near-term breakout trade.

If you’re bullish on HBAN, then I would look for long-biased if this stock manages to break out above some near-term overhead resistance levels at $7.10 to $7.21 a share and then once it takes out more resistance at $7.38 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 11,357,600 shares. If that breakout triggers soon, then HBAN will set up to re-test or possibly take out its next major overhead resistance levels at $8 to $9.50 a share. Traders can also look to buy this stock off weakness to anticipate that breakout, as long as it continues to trend above its 50-day at $6.44 a share.

To see more stocks with notable insider buying, including Bank of America (BAC), Synergy (SYRG) and Multiband (MBND), check out the Stocks With Big Insider Buying portfolio on Stockpickr.

-- Written by Roberto Pedone in Winderemere, Fla.


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

Roberto Pedone, based out of Windermere, Fla., 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.