Stock Quotes in this Article: CHK, LTS, SNTA, WIRE, ACW

Delafield, Wis. (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.

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

Chesapeake Energy

One energy player that insiders are snapping up a large amount of stock in is Chesapeake Energy (CHK), which is a natural gas and oil exploration and production company. Insiders are buying this stock into strength, since shares are up 25% so far in 2013.

Chesapeake Energy has a market cap of $13.5 billion and an enterprise value of $27.7 billion. This stock trades at a cheap valuation, with a forward price-to-earnings of 10.15. Its estimated growth rate for this year is 144.3%, and for next year it's pegged at 38.3%. This is not a cash-rich company, since the total cash position on its balance sheet is $33 million and its total debt is a whopping $13.63 billion. This stock currently sports a dividend yield of 1.7%.

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A director just bought 152,632 shares, or about $3.03 million worth of stock, at $19.87 per share.

From a technical perspective, CHK is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock recently started to spike back above its 50-day moving average of $20.58 a share. That move is quickly pushing the stock within range of triggering a near-term breakout trade.

If you're bullish on CHK, then I would look for long-biased trades as long as this stock is trending above its 200-day at $19.30 or its 50-day at $20.58 and then once it breaks out above some near-term overhead resistance levels at $22 to $22.87 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 11.49 million shares. If that breakout triggers soon, then CHK will set up to re-test or possibly take out its next major overhead resistance levels at $25.60 to $29 a share.

Ladenburg Thalmann Financial Services

Another stock that insiders are jumping into here is Ladenburg Thalmann Financial Services (LTS), which is engaged in investment banking, equity research, institutional sales and trading, independent brokerage and advisory services and asset management services through its main subsidiaries. Insiders are buying this stock into decent strength, since shares are up 20% so far in 2013.

Ladenburg Thalmann Financial Services has a market cap of $310 million and an enterprise value of $460 million. This stock trades at a reasonable valuation, with a price-to-sales of 0.47 and a price-to-book of 5.83. Its estimated growth rate for this year is 11.1%, and for next year it's pegged at 37.5%. This is not a cash-rich company, since the total cash position on its balance sheet is $41.36 million and its total debt is $198.88 million.

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A director just bought 20,000 shares, or about $500,000 worth of stock, at $25.03 per share. This purchase was part of the company's 8% Series A Cumulative Redeemable Preferred Stock.

From a technical perspective, LTS 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 two months, with shares moving higher from its low of $1.36 to its recent high of $1.72 a share. During that move, shares of LTS have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of LTS within range of triggering a major breakout trade.

If you're in the bull camp on LTS, then look for long-biased trades as long as this stock is trending above its 50-day at $1.56 and then once it breaks out above some key overhead resistance levels at $1.72 to $1.74 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 254,395 shares. If that breakout triggers soon, then LTS will set up to re-test or possibly take out its next major overhead resistance levels at $2.14 to $2.60 a share.

Synta Pharmaceuticals

Another stock that insiders are active in here is Synta Pharmaceuticals (SNTA), which is engaged in discovering, developing and commercializing small molecule drugs to extend and enhance the lives of patients with severe medical conditions like cancer and chronic inflammatory diseases. Insiders are buying this stock into big time weakness, since shares are off by 44% so far in 2013.

Synta Pharmaceuticals has a market cap of $348 million and an enterprise value of $277 million. This stock trades at a fair valuation, with a price-to-book of 6.10. Its estimated growth rate for this year is -11.3%, and for next year it's pegged at 5.1%. This is a cash-rich company, since the total cash position on its balance sheet is $90.39 million and its total debt is $23.64 million. After you back out the debt, this company has $66.75 million of total cash on its balance sheet.

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A director just bought 150,000 shares, or about $706,000 worth of stock, at $4.71 per share. That same director also just bought 500,000 shares, or about $2.26 million worth of stock, at $4.35 to $4.65 per share.

From a technical perspective, SNTA 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 three months, with shares plunging from its high of $10.74 to its recent low of $3.77 a share. During that move, shares of SNTA have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of SNTA have now started to rebound sharply off that $3.77 low and are quickly moving within range of triggering a near-term breakout trade.

If you're bullish on SNTA, then look for long-biased trades as long as this stock is trending above $4.50, and then once it breaks out above some near-term overhead resistance at $5.15 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 1.53 million shares. If that breakout triggers soon, then SNTA will set up to re-test or possibly take out its next major overhead resistance levels at $6 to its 50-day moving average at $6.65 a share.

Encore Wire

Another stock that insiders are in love with here is Encore Wire (WIRE), a manufacturer of copper electrical building wire and cable. Insiders are buying this stock into notable strength, since shares are up 14.6% so far in 2013.

Encore Wire has a market cap of $718 million and an enterprise value of $672 million. This stock trades at a cheap valuation, with a trailing price-to-earnings of 37.69 and a forward price-to-earnings of 15.8. Its estimated growth rate for this year is 33%, and for next year it's pegged at 81.8%. This is a cash-rich company, since the total cash position on its balance sheet is $32.74 million and its total debt is zero.

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A director just bought 3,500 shares, or about $118,000 worth of stock, at $33.96 per share.

From a technical perspective, WIRE is currently trending above both its 50-day and 200-day moving averages, which is bullish technical price action. This stock has been uptrending strong for the last two months, with shares moving higher from its low of $31.44 to its recent high of $35.88 a share. During that move, shares of WIRE have been mostly making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of WIRE within range of triggering a near-term breakout trade.

If you're bullish on WIRE, then look for long-biased trades as long as this stock is trending above its 50-day at $34.10 or above some more near-term support at $33.46 and then once it breaks out above some near-term overhead resistance levels at $34.88 to $35.49 and then above its 52-week high at $35.90 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 69,514 shares. If that breakout hits soon, then WIRE will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $40 to $45 a share.

Accuride

One final name with some decent insider buying is Accuride (ACW), a manufacturer supplier of commercial vehicle components in North America. Insiders are buying this stock into major strength, since shares are up a whopping 66% so far in 2013.

Accuride has a market cap of $253 million and an enterprise value of $558 million. This stock trades at a reasonable valuation, with a price-to-sales of 0.30 and a price-to-book of 5.14. Its estimated growth rate for this year is 54.3%, and for next year it's pegged at 259.50%. This is not a cash-rich company, since the total cash position on its balance sheet is $31.52 million and its total debt is $349.39 million.

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A beneficial owner just bought 12,717 shares, or about $62,000 worth of stock, at $4.90 per share.

From a technical perspective, ACW is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been trending sideways for the last two months, with shares moving between $4.75 on the downside and $5.83 on the upside. Shares of ACW have just started to spike back above its 50-day at $5.18 a share and are now quickly moving within range of triggering a major breakout trade above the upper-end of its recent sideways chart pattern.

If you're bullish on ACW, then look for long-biased trades as long as this stock is trending above its 50-day at $5.18 or above some more near-term support at $4.75, and then once it breaks out above some near-term overhead resistance levels at $5.50 to $5.83 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 246,105 shares. If that breakout triggers soon, then ACW will set up to re-test or possibly take out its next major overhead resistance levels at $6.24 to $6.25 a share. Any high-volume move above those levels will then give ACW a chance to tag $7 to $8 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 Delafield, Wis.

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

Roberto Pedone, based out of Delafield, 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.