Stock Quotes in this Article: DRIV, GHDX, VOCS, WLT, X

MADISON, Wis. (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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Genomic Health

A molecular diagnostics stock that insiders are moving into heavily here is Genomic Health (GHDX), which develops and commercializes genomic-based clinical laboratory services that analyze the underlying biology of cancer allowing physicians and patients to make individualized treatment decisions. Insiders are buying this stock into strength, since shares are up 34% so far in 2013.

Genomic Health has a market cap of $1.10 billion and an enterprise value of $953 million. This stock trades at a premium valuation, with a trailing price-to-earnings of 168.63 and a forward price-to-earnings of 120.85. Its estimated growth rate for this year is -119.2%, and for next year it's pegged at 700%. This is a cash-rich company, since the total cash position on its balance sheet is $96.08 million and its total debt is zero.

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A director just bought 240,426 shares, or $8.25 million worth of stock, at $34.02 to $35.53 per share.

From a technical perspective, GHDX is currently trending well above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending strong for the last month and change, with shares soaring higher from its low of $26.25 to its recent high of $36.78 a share. During that uptrend, shares of GHDX have been consistently making higher lows and higher highs, which is bullish technical price action. That move has how pushed shares of GHDX within range of triggering a near-term breakout trade.

If you're bullish on GHDX, then I would look for long-biased trades as long as this stock is trending above some key near-term support at $34 and then once it breaks out above some resistance at $36.78 a share and above its 52-week high at $37.44 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 219,964 shares. If that breakout hits, then GHDX will set up to enter new 52-week-high territory above $37.44, which is bullish technical price action. Some possible upside targets off that move are $40 to $43 a share.

U.S. Steel

Another stock that insiders are loading up on here is U.S. Steel (X), an integrated steel producer of flat-rolled and tubular products with major production operations in North America and Europe. Insiders are buying this stock into notable weakness, since shares are off by 23% in 2013.

U.S. Steel has a market cap of $2.6 billion and an enterprise value of $5.9 billion. This stock trades at a reasonable valuation, with a trailing price-to-earnings of 121.89 and a forward price-to-earnings of 10.74. Its estimated growth rate for this year is -200.9%, and for next year it's pegged at 252.7%. This is not a cash-rich company, since the total cash position on its balance sheet is $733 million and its total debt is $3.93 billion. This stock currently sports a dividend yield of 1%.

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A director just bought 72,075 shares, or about $1.36 million worth of stock, at $18.99 per share. This same director also recently bought 12,925 shares, or about $239,000 worth of stock, at $18.50 per share.

From a technical perspective, X is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock recently came out of a nasty downtrend after it hit a low of $15.76 a share. Since hitting that low, shares of X have started to uptrend a bit with the stock running from $15.76 to its recent high of $19.42 a share. That move had briefly pushed X back above its 50-day moving average, but the stock has now slipped back below that key technical level again.

If you're in the bull camp on X, then look for long-biased trades as long as this stock is trending above its 50-day at $18.39 and then once it breaks out above some near-term overhead resistance $19.42 a share with high volume. Look for a sustained move or close above that level with volume that registers near or above its three-month average action of 8.44 million shares. If that breakout triggers soon, then X will set up to re-test or possibly take out its next major overhead resistance levels at its 200-day moving average of $20.98 to $22 a share.

Walter Energy

Another commodity player that insiders are jumping into here is Walter Energy (WLT), a producer and exporter of metallurgical coal for the global steel industry. Insiders are buying this stock into extreme weakness, since shares are off by a whopping 48%.

Walter Energy has a market cap of $1.14 billion and an enterprise value of $3.6 billion. This stock trades at a cheap valuation, with a forward price-to-earnings of 19.61. Its estimated growth rate for this year is -395.9%, and for next year it's pegged at 164.1%. This is not a cash-rich company, since the total cash position on its balance sheet is $235.79 million and its total debt is $2.61 billion. This stock currently sports a dividend yield of 2.6%.

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A director just bought 25,000 shares, or about $475,000 worth of stock, at $19 per share. This same director also just bought 25,000 shares, or about $443,000 worth of stock, at $17.75 per share.

From a technical perspective, WLT is currently trending well below both its 50-day and 200-day moving averages, which is bearish. This stock recently came out of a nasty downtrend after it hit a low of $16.12 a share. After hitting that low, shares of WLT have started to trend sideways between $16.12 and $19.81 a share.

If you're bullish on WLT, then look for long-biased trades as long as this stock is trending above some key near-term support levels at $16.57 or $16.12, and then once it breaks out back above some near-term overhead resistance at $19.81 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 4.90 shares. If that breakout triggers soon, then WLT will set up to re-test or possibly take out its next major overhead resistance levels at its 50-day moving average of $23.10 to $25.81 a share.

Vocus

A technology stock that insiders are snapping up here is Vocus (VOCS), a provider of cloud marketing software that helps businesses attract, engage and retain customers. Insiders are buying this stock into extreme weakness, since shares are off sharply by 52% so far in 2013.

Vocus has a market cap of $167 million and an enterprise value $130 million. This stock trades at a reasonable valuation, with a forward price-to-earnings of 22.94. Its estimated growth rate for this year is -63.6%, and for next year it's pegged at 125%. This is a cash-rich company, since the total cash position on its balance sheet is $40.97 million and its total debt is just $872,000.

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A beneficial owner just bought 113,274 shares, or about $940,000 worth of stock, at $8.30 to $8.34 per share. The same beneficial owner also recently bought 62,803 shares, or about $524,000 worth of stock, at $8.35 per share.

From a technical perspective, VOCS is currently trending well below both its 50-day and 200-day moving averages, which is bearish. This stock recently gapped down sharply from $13.60 to $8.05 a share with heavy downside volume. Following that gap down, shares of VOCS have started to trend sideways between $8.05 on the downside and $8.82 on the upside. This move has now pushed shares of VOCS within range of triggering a near-term breakout trade.

If you're bullish on VOCS, then look for long-biased trades as long as this stock is trending above some key near-term support levels at $8.20 or $8.05 and then once it breaks out above some near-term overhead resistance levels at $8.82 a share to its gap down day high of $9.20 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 553,270 shares. If that breakout triggers soon, then VOCS will set up to re-fill some of its previous gap down zone that started at $13.60 a share.

Digital River

One more name with some decent insider buying is Digital River (DRIV), which provides end-to-end global cloud-commerce and marketing solutions to a range of companies in software, consumer electronics, computer games, video games and other markets. Insiders are buying this stock into strength, since shares are up 16% so far in 2013.

Digital River has a market cap of $551 million and an enterprise value of $153 million. This stock trades at a fair valuation, with a forward price-to-earnings of 24.58. Its estimated growth rate for this year is -39.2%, and for next year it's pegged at 9.7%. This is a cash-rich company, since the total cash position on its balance sheet is $645.36 million and its total debt is $308.55 million. After you back out the debt, Digital River has $336.81 million of total cash on its balance sheet.

The CEO just bought 30,000 shares, or about $446,000 worth of stock, at $14.86 per share.

From a technical perspective, DRIV 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 higher from its low of $12.80 to its recent high of $16.80 a share. During that uptrend, shares of DRIV have been mostly making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of DRIV within range of triggering a major breakout trade.

If you're bullish on DRIV, then look for long-biased trades as long as this stock is trending above $16 or $15.50, and then once it breaks out above some key overhead resistance levels $16.80 to $17.68 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 317,064 shares. If that breakout triggers soon, then DRIV will set up to re-test or possibly take out its next major overhead resistance levels at $19.10 to $22.50 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 Madison, Wis.

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

Roberto Pedone, based out of Madison, 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.