Stock Quotes in this Article: OXY, PKY, VTSS, FBHS, ACRX

WINDERMERE, Fla. (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.

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, 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.

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

AcelRx Pharmaceuticals

One biotechnology and drugs player that insiders are loading up on here is AcelRx Pharmaceuticals (ACRX). This company develops and commercializes therapies for the treatment of pain. Insiders are buying this stock into extreme strength, since shares are up over 80% so far in 2012.

AcelRx Pharmaceuticals has a market cap of $79 million and an enterprise value of $72 million. This stock trades at a premium valuation, with a price-to-sales of 58.34. Its estimated growth rate for this year is -31%, and for next year it’s pegged 41.4%. This is barely a cash-rich company, since the total cash position on its balance sheet is $23.38 million and its total debt is $17.68 million.

A beneficial owner and director just bought 2,416,918 shares, or $7.99 million worth of stock, at $3.31 per share.

From a technical perspective, ACRX is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock recently sold off sharply from its November high of $5.25 to its recent low of $3.30 a share. During that selloff, shares of ACRX were consistently making lower highs and lower lows, which is bearish technical price action. That said, if ACRX can hold that $3.30 low then the stock could be setting up to rebound again and breakout.

If you’re bullish on ACRX, then I would look for long-biased trades once this stock manages to break out above some near-term overhead resistance at $3.71 a share with high volume. Look for a sustained move or close above $3.71 a share with volume that registers near or above its three-month average action of 206,758 shares. If that breakout triggers soon, then ACRX will set up to re-test or possibly take out its next major overhead resistance levels at $4.80 to $5.25 a share.

Vitesse Semiconductor

Another name in the semiconductor complex that insiders are snapping up a large amount of stock in is Vitesse Semiconductor (VTSS). This company designs, develops and markets high-performance, cost-competitive semiconductor solutions for Carrier and Enterprise networks worldwide. Insiders are buying this stock into weakness, since shares are down by 26% so far in 2012.

Vitesse Semiconductor has a market cap of $46 million and an enterprise value of $80 million. This stock trades at a cheap valuation, with a forward price-to-earnings of 10.11. Its estimated growth rate for this year is 10%, and for next year it’s pegged at 300%. This is not a cash-rich company, since the total cash position on its balance sheet is $23.89 million and its total debt is $58.37 million.

A beneficial owner just bought 3,000,000 shares, or $5.25 million of stock, at $1.75 per share.

From a technical perspective, VTSS is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock recently gapped down from around $2.20 a share to below $1.80 a share with big downside volume. Following that gap, shares of VTSS have started to rebound and are now approaching a near-term breakout trade back above its gap down day high.

If you’re in the bull camp on VTSS, then I would look for long-biased once this stock manages to break out above its gap down day high of $1.90 a share with high volume. Look for a sustained move or close above $1.90 a share with volume that hits near or above its three-month average action of 74,381 shares. If that breakout triggers soon, then VTSS will set up to re-fill some of that previous gap back towards $2.20 a share.

Occidental Petroleum

One name in the oil and gas complex that insiders are active in here is Occidental Petroleum (OXY). This is a multinational organization whose subsidiaries and affiliates operate in the oil and gas, chemical and midstream, marketing and other segments. Insiders are buying this stock into some notable weakness, since shares are off by 18% so far in 2012.

Occidental Petroleum has a market cap of $61 billion and an enterprise value of $65 billion. This stock trades at a cheap valuation, with a trailing price-to-earnings of 10.48 and a forward price-to-earnings of 10.44. Its estimated growth rate for this year is -16.9%, and for next year it’s pegged at 4.6%. This is not a cash-rich company, since the total cash position on its balance sheet is $3.76 billion and its total debt is $7.62 billion.

A director just bought 5,000 shares, or about $367,000 worth of stock, at $73.43 per share.

From a technical perspective, OXY 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 three months, with shares dropping from a high of $92.92 to its recent low of $71.90 a share. During that move, shares of OXY were consistently making lower highs and lower lows, which is bearish technical price action. That said, the stock has recently put in a double bottom at around $72 a share and it’s moving within range of triggering a near-term breakout trade.

If you‘re bullish on OXY, then I would look for long-biased trades once this stock manages to break out above some near-term overhead resistance levels at $76.44 to its 50-day at $78.35 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 5,112,790 shares. If that breakout triggers soon, then OXY will set up to re-test or possibly take out its next major overhead resistance levels at $80 to $84 a share.

Fortune Brands Home & Security

Another name in the capital goods sector that insiders are buying a decent amount of stock in is Fortune Brands Home & Security (FBHS). This is a home and security products company that competes in attractive long-term growth markets in its categories. Insiders are buying this stock into big time strength, since shares are up 75% so far in 2012.

Fortune Brands Home & Security has a market cap of $4.85 billion and an enterprise value $4.81 billion. This stock trades at a premium valuation, with a trailing price-to-earnings of 164.75 and a forward price-to-earnings of 25.71. Its estimated growth rate for this year is 51.7%, and for next year it’s pegged at 31.8%. This is not a cash-rich company, since the total cash position on its balance sheet is $216.10 million and its total debt is $344.60 million.

A director just bought 10,000 shares, or around $288,000 worth of stock, at $28.87 per share.

From a technical perspective, FBHS is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been moving within a sideways trading pattern for the last two months, with shares moving between $26 on the downside and $30.50 on the upside. A high-volume move outside of that range will likely lead to the next major trend for shares of FBHS.

If you’re in the bull camp on FBHS, then I would look for long-biased trades once this stock manages to break out above some near-term overhead resistance levels at $30.27 to $30.50 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 1,694,320 shares. If that breakout triggers soon, then FBHS will set up to enter new 52-week high territory, which is bullish technical price action. Some possible upside targets off that breakout are $35 to $40 a share.

Parkway Properties

The last name to consider with some huge insider buying is Parkway Properties (PKY). This is a real estate investment trust, which is engaged in the operation, leasing, acquisition and ownership of office properties. Insiders are buying this stock into some solid strength, since shares are up by 36% so far in 2012.

Parkway Properties has a market cap of $552 million and an enterprise value of $1.25 billion. This stock trades at a cheap valuation, with a forward price-to-earnings of 10.91. Its estimated growth rate for this year is -41.5%, and for next year it’s pegged at -3.1%. This is not a cash-rich company, since the total cash position on its balance sheet is $53.56 million and its total debt is $689.78 million.

A beneficial owner just bought 5,822,000 shares, or about $75.68 million worth of stock, at $13 per share.

From a technical perspective, PKY is currently trending above its 200-day moving average and just below its 50-day moving average, which is neutral trendwise. This stock has been downtrending a bit for the last month, with shares moving lower from $14.60 to its recent low of $12.78 a share. During that move, shares of PKY have been making lower highs and lower lows, which is bearish technical price action. That said, shares of PKY have started to rebound off that $12.78 low and it’s now moving within range of triggering a near-term breakout trade.

If you’re bullish on PKY, then I would look for long-biased once this stock manages to break out above some near-term overhead resistance levels at $13.59 to $14.02 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 289,565 shares. If that breakout triggers soon, then PKY will set up to re-test or possibly take out its next major overhead resistance levels at $14.60 to $16 a share.

To see more stocks with notable insider buying like Fortress Investment Group (FIG), Ligand Pharmaceuticals (LGND) and Tuesday Morning (TUES), 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.