Stock Quotes in this Article: EXPE, MUR, NRP, PANL, ZIGO

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 whose insiders have been doing some big buying per SEC filings.

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Expedia

One travel agency services player that insiders are buying a huge amount of stock in is Expedia (EXPE). Insiders are buying this stock into strength, since shares are up 23% during the last six months.

Expedia has a market cap of $8.8 billion and an enterprise value of $7.9 billion. This stock trades at a fair valuation, with a trailing price-to-earnings of 32.83 and a forward price-to-earnings of 15.93. Its estimated growth rate for this year is 11.9%, and for next year it’s pegged at 18.7%. This is a cash-rich company, since the total cash position on its balance sheet is $1.94 billion and its total debt is $1.25 billion.

A beneficial owner just bought 467,672 shares, or about $25.27 million worth of stock, at $54.04 per share.

From a technical perspective, EXPE 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 four months, with shares soaring higher from its low of $50.16 to its recent high of $68.09 a share. During that uptrend, shares of EXPE have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of EXPE within range of triggering a near-term breakout trade.

If you’re bullish on EXPE, then I would look for long-biased trades as long as it’s trending above its 50-day at $63.80 and then once it breaks out above some near-term overhead resistance levels at $66.22 to $68.09 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 2.30 million shares. If that breakout hits, then EXPE will set up to enter new 52-week-high territory, which is bullish price action. Some possible upside targets off that breakout are $70 to $75 a share.

Natural Resource Partners

Another stock that insiders are active in here is Natural Resource Partners (NRP), which is engaged mainly in the business of owning and managing coal properties in the coal-producing regions of the U.S. Insiders are buying this stock into notable strength, since shares are up 21% in the last three months.

Natural Resource Partners has a market cap of $2.43 billion and an enterprise value of $3.24 billion. This stock trades at a fair valuation, with a trailing price-to-earnings of 11.22 and a forward price-to-earnings of 12.09. Its estimated growth rate for this year is -15%, and for next year it’s pegged at 7.6%. This is not a cash-rich company, since the total cash position on its balance sheet is $149.42 million and its total debt is $984.27 million.

A director just bought 22,500 shares, or about $490,000 worth of stock, at $21.64 to $21.89 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 trading inside of a consolidation pattern for the last two months, with shares moving between $21.08 on the downside and $23.12 on the upside. A high-volume move above the upper-end of its recent range could trigger a near-term breakout trade for shares of NRP.

If you’re in the bull camp on NRP, then look for long-biased trades as long as it’s trending above its 50-day at $21.06 and then once it breaks out above some near-term overhead resistance levels at $22.45 to $23.12 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 355,508 shares. If that breakout hits soon, then NRP will set up to re-test or possibly take out its next major overhead resistance levels at $23.88 to $25.46. Any high-volume move above those levels will then put $26.74 to $28 into range for shares of NRP.

Universal Display

A technology stock that insiders are jumping into here is Universal Display (PANL), which is engaged in the research, development and commercialization of organic light emitting diode technologies and materials. Insiders are buying this stock into strength, since shares are up sharply by 30% so far in 2013.

Universal Display has a market cap of $1.55 billion and an enterprise value of $1.24 billion. This stock trades at a reasonable valuation, with a trailing price-to-earnings of 158.90 and a forward price-to-earnings of 22.40. Its estimated growth rate for this year is 195.2%, and for next year it’s pegged at 140.3%. This is a cash-rich company, since the total cash position on its balance sheet is $243.94 million and its total debt is zero.

A beneficial owner just bought 77,580 shares, or about $2.17 million worth of stock, at $27.91 to $28.09 per share.

From a technical perspective, PANL 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 four months, with shares soaring higher from its low of $21.55 to its recent high of $34.47 a share. During that uptrend, shares of PANL have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of PANL within range of triggering a major breakout trade.

If you’re bullish on PANL, then look for long-biased trades as long as it’s trending above its 200-day at $31.75, and then once it breaks out above some near-term overhead resistance levels at $34.47 to $34.54 a share and above $35.60 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 1.10 million shares. If that breakout triggers soon, then PANL will set up to re-test or possibly take out its next major overhead resistance levels at $40 to $44.42 a share.

Murphy Oil

An oil and gas 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 modest strength, since shares are up 8.7% during the last three months.

Murphy Oil has a market cap of $11.7 billion and an enterprise value $12.9 billion. This stock trades at a cheap valuation, with a trailing price-to-earnings of 12.20 and a forward price-to-earnings of 9.58. Its estimated growth rate for this year is 13.8%, and for next year it’s pegged at 18.5%. 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 20,000 shares, or about $1.21 million worth of stock, at $60.86 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 four months, with shares moving higher from its low of $54.07 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.

Traders should now look for long-biased trades in MUR as long as it’s trending above its 50-day at $60.52 and then once it breaks out above some near-term overhead resistance levels at $62.48 to $63.77 a share and then above some past resistance at $64.72 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 1.81 million shares. If that breakout hits soon, then MUR will set up to re-test or possibly take out its next major overhead resistance level at $71.71 a share.

Zygo

One more stock to consider with some large insider buying is Zygo (ZIGO), which designs, develops and manufactures measurement solutions to improve its customers' manufacturing yields, as well as top-tier optical sub-systems and components for original equipment manufacturers and end-user applications. Insiders are buying this stock into modest strength, since shares are higher by 6.2% in the last three months.

Zygo has a market cap of $297 million and an enterprise value of $186 million. This stock trades at a cheap valuation, with a trailing price-to-earnings of 8.85. This is a cash-rich company, since the total cash position on its balance sheet is $77.35 million and its total debt is zero.

A beneficial owner just bought 250,000 shares, or $3.65 million worth of stock, at $14.60 per share.

From a technical perspective, ZIGO is currently trending above its 50-day moving average and just below its 200-day moving average, which is neutral trendwise. This stock recently spiked back above its 50-day at $15.55 a share with volume and it’s now quickly moving within range of triggering a major breakout trade.

If you’re bullish on ZIGO, then look for long-biased as long as it’s trending above its 50-day at $15.55 and then once it breaks out above some near-term overhead resistance levels at $16.19 to its 200-day at $16.85 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 38,498 shares. If that breakout hits soon, then ZIGO will set up to re-test or possibly take out its next major overhead resistance levels at $19 to $20 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 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.