Stock Quotes in this Article: CAB, LINE, TSLA, TSRA, BXMT

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.

>>Beat the S&P With 5 Stocks Everyone Else Hates

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.

>>5 Stocks Set to Soar on Bullish Earnings

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.

>>5 Breakout Stocks Ready to Surge Higher
 

Linn Energy

One oil and natural gas player that insiders are active in here is Linn Energy (LINE), which acquires and develops various oil and gas properties in the U.S. Insiders are buying this stock into modest weakness, since shares are down by 6.2%.

Linn Energy has a market cap of $7.7 billion and an enterprise value of $13.9 billion. This stock trades at a reasonable valuation, with a forward price-to-earnings of 20.75. Its estimated growth rate for this year is -11.8%, and for next year it's pegged at 25.2%. This is not a cash-rich company, since the total cash position on its balance sheet is $6.03 million and its total debt is a whopping $6.19 billion. This stock currently sports a dividend yield of 9.4%.

>>5 Hated Earnings Stocks That Deserve Your Love

A director just bought 15,000 shares, or about $512,000 worth of stock, at $34.03 to $34.28 per share.

From a technical perspective, LINE 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 month and change, with shares falling from a high of $38.73 to a 52-week low of $32.11 a share. During that move, shares of LINE have been consistently making lower highs and lower lows, which is bearish technical price action. The move has pushed shares of LINE into oversold territory, since its current relative strength index reading is 28.5.

If you're bullish on LINE, then I would look for long-biased trades as long as this stock is trending above its 52-week low of $32.11 and then once it breaks out above some near-term overhead resistance at $34 a share with high volume. Look for a sustained move or close above $34 with volume that hits near or above its three-month average action of 1.99 million shares. If we get that move soon, then LINE could bounce back towards its next significant overhead resistance levels at $35 to its 50-day moving average at $36.26 a share.


 

Cabela's

Another name that insiders are jumping into here is Cabela's (CAB), a specialty retailer and a direct marketer of hunting, fishing, camping and related outdoor merchandise. Insiders are buying this stock into big time strength, since shares are up a whopping 62% so far in 2013.

Cabela's has a market cap of $4.7 billion and an enterprise value of $7.1 billion. This stock trades at a reasonable valuation, with a trailing price-to-earnings of 24.78 and a forward price-to-earnings of 17.36. Its estimated growth rate for this year is 26.1%, and for next year it's pegged at 13.1%. This is not a cash-rich company, since the total cash position on its balance sheet is $82.04 million and its total debt is $2.48 billion.

>>5 Toxic Stocks to Unload in June

A director just bought 5,000 shares, or about $334,000 worth of stock, at $67.50 per share. That same director also just bought 5,000 shares, or about $332,000 worth of stock, at $66.50 per share.

From a technical perspective, CAB is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been trending sideways inside of a consolidation pattern for the last few weeks, with shares moving between $65.49 on the downside and close to $70 a share on the upside. A high-volume move above the upper end of its recent range could trigger a major breakout trade for shares of CAB.

If you're in the bull camp on CAB, then look for long-biased as long as this stock is trending above some key near-term support levels at $65.49 or above its 50-day at $63.79, and then once it breaks out above some near-term overhead resistance levels at $69.21 to $70 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 690,680 shares. If that breakout triggers soon, then CAB will set up to re-test or possibly take out its next major overhead resistance level at its 52-week high of $72.54 a share. Any high-volume move above its 52-week high could easily send shares of CAB north of $80 a share.

Tesla Motors

One electrical alternative vehicle maker that insiders are snapping up a huge amount of stock in is Tesla Motors (TSLA), which designs, develops, manufactures and sells high-performance fully electric vehicles and advanced electric vehicle powertrain components. Insiders are buying this stock into some monster strength, since shares are up 169% so far in 2013.

Tesla Motors has a market cap of $10.6 billion and an enterprise value of $11.5 billion. This stock trades at a premium valuation, with a forward price-to-earnings of 87.35. Its estimated growth rate for the next quarter is 102.2%, and for this year it's pegged at 101.2%. This is not a cash-rich company, since the total cash position on its balance sheet is $214.24 million and its total debt is $455.54 million.

>>5 Rocket Stocks to Buy in June

The CEO just bought 1,084,129 shares, or about $100 million worth of stock, at $92.24 per share.

From a technical perspective, TSLA is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been downtrending since hitting its all-time high at $114.90 a share last week. During that move, shares of TSLA have been mostly making lower highs and lower lows, which is bearish technical price action. Shares of TSLA are now trading just above some key near-term support levels at $88.25 to $85.28 a share.

If you're bullish on TSLA, then look for long-biased trades as long as this stock is trending above either $88.25 or $85.28 and then once it breaks out above some near-term overhead resistance levels at $96.42 to $100 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 7.29 million shares. If that breakout triggers soon, then TSLA will set up to re-test or possibly take out its next major overhead resistance levels at $110 to its all-time high at $114.90 a share.

Keep in mind that a break below those key support levels at $88.25 to $85.28 a share with volume will then set shares of TSLA up to drop back towards its next major support levels at $78.11 to $70 a share. This stock has made a parabolic move over the last few months, so going long should only be done if we see high-volume strength above those key near-term support levels.

Tessera Technologies

One semiconductor player that insiders are snapping up shares in here is Tessera Technologies (TSRA), which operates through its subsidiaries in two segments: Intellectual Property and DigitalOptics. Insiders are buying this stock into strength, since shares are up 25% so far in 2013.

Tessera Technologies has a market cap of $1 billion and an enterprise value $692 million. This stock trades at a reasonable valuation, with a forward price-to-earnings of 20.75. Its estimated growth rate for the next quarter is 380%, and for this year it's pegged at -166.7%. This is a cash-rich company, since the total cash position on its balance sheet is $402.71 million and its total debt is zero. This stock currently sports a dividend yield of 1.9%.

>>3 Stocks Under $10 Making Big Moves

A director just bought 20,000 shares, or about $422,000 worth of stock, at $21.11 per share.

From a technical perspective, TSRA 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 $14.53 to its recent 52-week high at $21.33 a share. During that uptrend, shares of TSRA have been consistently making higher lows and higher highs, which is bullish technical price action.

If you're bullish on TSRA, then look for long-biased trades as long as this stock is trending above some key near-term support levels at $20.50 or above its 50-day at $19.51 and then once it breaks out above its 52-week high at $21.33 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 366,086 shares. If that breakout triggers soon, then TSRA will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $24 to $25 a share.

Blackstone Mortgage Trust

One final name with some big insider buying is wealth management player Blackstone Mortgage Trust (BXMT), which is a self-managed, real estate finance and investment management company that specializes in credit sensitive financial products. Insiders are buying this stock into strength, since shares are up around 50% so far in 2013.

Blackstone Mortgage Trust has a market cap of $663 million and an enterprise value of $1.09 billion. This stock trades at a cheap valuation, with a trailing price-to-earnings of 1.86 and a forward price-to-earnings of 13.77. Its estimated growth rate for next year is pegged at 430.6%. This is not a cash-rich company, since the total cash position on its balance sheet is $66.29 million and its total debt is $481.95 million.

A beneficial owner just bought 1,960,784 shares, or about $49.9 million worth of stock, at $25.50 per share. The CEO also just bought 19,608 shares, or about $500,000 worth of stock, at $25.50 per share.

From a technical perspective, BXMT is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been downtrending modestly for the past few weeks, with shares moving lower from its recent high of $29.29 to its intraday low of $25.98 a share. During that move, shares of BXMT have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of BXMT have so far been able to find some buying interest right around its 50-day at $26.09 a share.

If you're bullish on BXMT, then look for long-biased trades as long as this stock is trending above its 50-day at $26.09 or above some more key support at $25.63, and then once it breaks out above some near-term overhead resistance levels $29.28 to $29.50 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 271,073 shares. If that breakout triggers soon, then BXMT will take out its double top resistance zone at $29.29 to $29.50 a share, which is bullish price action. Some possible upside targets off that breakout are $33 to $35 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.

RELATED LINKS:

>>5 Defensive Stocks to Protect Your Portfolio Gains
>>3 Homebuilders Ready to Fall Down

>>5 Big Stocks to Sell Now

Follow Stockpickr on Twitter and become a fan on Facebook.

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.