Stock Quotes in this Article: ECHO, END, GLW, MUR, SPRT

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 some stocks where insiders have been doing some big buying in per SEC filings.

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Murphy Oil

One energy stock that insiders are loading up on here is Murphy Oil (MUR), a worldwide oil and gas exploration and production firm with refining and marketing operations in the U.S. and the United Kingdom. Insiders are buying this stock into strength, since shares are up 12% in the last six months.

Murphy Oil has a market cap of $11.9 billion and an enterprise value of $13.1 billion. This stock trades at a cheap valuation, with a trailing price-to-earnings of 12.39 and a forward price-to-earnings of 9.61. Its estimated growth rate for this year is -16.7%, and for next year it’s pegged at 24.1%. This is not a cash-rich company, since the total cash position on its balance sheet is $947.32 million and its total debt is $2.25 billion.

A director just bought 80,000 shares, or about $4.82 million worth of stock, at $59.86 per share.

From a technical perspective, MUR 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 soaring higher from its low of $47.32 a share to its recent high of $63.77 a share. During that uptrend, shares of MUR have been mostly making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of MUR within range of triggering a near-term breakout trade.

If you’re bullish on MUR, then look for long-biased trades as long as it’s trending above its 50-day at $60.11 and then once it manages to break out above some near-term overhead resistance levels at $62.28 to $63.77 a share and then above more past resistance at $64.72 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 1.78 million shares. If that breakout triggers soon, then MUR will set up to re-test or possibly take out its next major overhead resistance level at $71.71 a share.

Support.com

Another name in the technology complex that insiders are jumping into here is Support.com (SPRT), a provider of online care for the digital home and small business. Its technology support services and software products help install, set up, connect, secure, repair and optimize personal computers, printers and tablets. Insiders are buying this stock into big time strength, since shares are up 48% during the last six months.

Support.com has a market cap of $212 million and an enterprise value of $143 million. This stock trades at a cheap valuation, with a forward price-to-earnings of 13.45. Its estimated growth rate for this year is 900%, and for next year it’s pegged at 60%. This is a cash-rich company, since the total cash position on its balance sheet is $56.35 million and its total debt is zero.

A beneficial owner just bought 150,000 shares, or $615,000 worth of stock, at $4.10 per share.

From a technical perspective, SPRT is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been stuck in a consolidation trading pattern for the last three months, with shares moving between $4.58 on the upside and $3.91 on the downside. A high-volume move above the upper end of that sideways chart pattern could trigger a major breakout trade for shares of SPRT.

If you’re in the bull camp on SPRT, then look for long-biased as long as it’s trending above $3.91 or $3.75, and then once it manages to break out above some near-term overhead resistance levels at $4.44 to $4.58 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 166,562 shares. If that breakout triggers soon, then SPRT will set up to re-test or possibly take out its next major overhead resistance level at $4.95 a share. Any high-volume move above $4.95 will then put $6 into range for shares of SPRT.

Endeavour International

An energy stock that insiders are snapping up a decent amount of shares in here is Endeavour International (END), an independent oil and gas company engaged in the production, exploration, development and acquisition of crude oil and natural gas in the U.K. North Sea and U.S. Onshore. Insiders are buying this stock into major weakness, since shares are off by 64% in the last six months.

Endeavour International has a market cap of $143 million and an enterprise value of $889 million. This stock trades at a cheap valuation, with a forward price-to-earnings of 7.30. Its estimated growth rate for this year is -90.8%, and for next year it’s pegged at 116%. This is not a cash-rich company, since the total cash position on its balance sheet is $75.72 million and its total debt is $825.43 million.

A beneficial owner just bought 250,000 shares, or about $884,000 worth of stock, at $3.53 to $3.56 per share.

From a technical perspective, END is currently trending well below both its 50-day and 200-day moving averages, which is bearish. This stock has been downtrending badly for the last six months, with shares dropping from its high of $10.02 to its recent low of $2.95 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 entered extremely oversold territory, since its current relative strength index reading is now 18.18. Oversold can always get more oversold, but an extreme reading like this is often an area where a stock can experience a powerful bounce higher from.

Traders who are bullish on END should now look for long-biased trades as long as it’s trending above today’s low of $2.95, and then once it manages to break out above some near-term overhead resistance at $3.50 a share with high volume. Look for a sustained move or close above $3.50 a share with volume that registers near or above its three-month average action of 806,297 shares. If that breakout triggers soon, then END could easily rebound back towards its next major overhead resistance levels at $4.50 to $5 a share, or even its 50-day moving average at $5.33 a share.

Echo Global Logistics

Another stock that insiders are falling in love with here is Echo Global Logistics (ECHO), a provider of technology-enabled transportation and supply chain management services, delivered on a proprietary technology platform serving the transportation and logistics needs of its clients. Insiders are buying this stock into decent strength, since shares are up 15% in the last three months.

Echo Global Logistics has a market cap of $451 million and an enterprise value $365 million. This stock trades at a reasonable valuation, with a trailing price-to-earnings of 37.76 and a forward price-to-earnings of 18.21. Its estimated growth rate for this year is 38.7%, and for next year it’s pegged at 30.2%. This is a cash-rich company, since the total cash position on its balance sheet is $41.78 million and its total debt is just $24,000.

A director just bought 50,639 shares, or about $942,000 worth of stock, at $18.46 to $18.70 per share.

From a technical perspective, ECHO is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has just started to spike higher right above its 50-day moving average at $18.30 a share with decent upside volume. This move has also started to push shares of ECHO into breakout territory and new 52-week-high territory, since the stock has taken out some near-term overhead resistance levels at $19.19 to $20.10 a share.

Traders should now look for long-biased trades in ECHO as long as it’s trending above its 50-day at $18.30, and then once it sustains a move or close above those key breakout levels at $19.19 to $20.10 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 139,200 shares. If ECHO can maintain that trend, then this stock will set up to enter new 52-week-high territory above $20.50 a share. Some possible upside target off that move are $23 to $25 in the near future.

Corning

One more stock to consider with some decent insider buying is Corning (GLW), a provider of high-performance glass for LCD televisions, computer monitors and other information display applications; optical fiber and cable and hardware and equipment products. Insiders are buying this stock into notable strength, since shares are up 13% in the last three months.

Corning has a market cap of $18.72 billion and an enterprise value of $16.19 billion. This stock trades at a cheap valuation, with a trailing price-to-earnings of 11.06 and a forward price-to-earnings of 9.93. Its estimated growth rate for this year is -9.3%, and for next year it’s pegged at 9.4%. This is a cash-rich company, since the total cash position on its balance sheet is $6.14 billion and its total debt is $3.50 billion. After you back out the debt, Corning has $2.64 billion of total cash on its books.

A director just bought 30,000 shares, or about $378,000 worth of stock, at $12.61 per share.

From a technical perspective, GLW is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has recently crossed back above both its 50-day and 200-day moving averages, and it’s now quickly moving within range of triggering a near-term breakout trade.

If you’re bullish on GLW, then look for long-biased as long as it’s trending above its 200-day at $12.34, and then once it breaks out above some near-term overhead resistance levels at $12.99 to $13.09 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 15.78 million shares. If that breakout triggers soon, then GLW will set up to re-test or possibly take out its next major overhead resistance level at $13.85 to $14.29 a share. Any high-volume move above those levels will then put $15.35 to $17 into range for shares or GLW.

To see more stocks with notable insider buying, 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.