Stock Quotes in this Article: COH, FCX, FIO, AXDX, MRTX

DELAFIELD, Wis. (Stockpickr) -- Corporate insiders sell their own companies' stock for a number of reasons.

>>5 Hated Earnings Stocks You Should Love

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.

>>5 Stocks to Trade This Week

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.

>>5 Stocks Ready to Break Out

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.

Accelerate Diagnostics

One medical equipment player that insiders are active in here is Accelerate Diagnostics (AXDX), which develops the BACcel system, planned for rapid diagnosis in life-threatening bacterial infections. Insiders are buying this stock into big time strength, since shares are up 222% so far in 2013.

Accelerate Diagnostics has a market cap of $505 million and an enterprise value of $478 million. This stock trades at a premium valuation, with a price-to-book of 18.41. This is a cash-rich company, since the total cash position on its balance sheet is $27.17 million and its total debt is zero.

>>5 Stocks Under $10 on the Verge of Breakouts

A director just bought 11,500 shares, or about $142,000 worth of stock, at $12.26 to $13.14 a share. Another director also just bought 7,191 shares, or about $91,000 worth of stock, at $12.56 to $12.73 a share.

From a technical perspective, AXDX is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been downtrending for the last few weeks, with shares dropping from its high of $16.45 to its recent low of $11.91 a share. That low corresponded with AXDX's 50-day moving average at $11.62 a share. This stock subsequently has started to form a double bottom chart pattern at $11.81 to $11.91 a share.

If you're bullish on AXDX, then I would look for long-biased trades as long as this stock is trending above its 50-day moving average at $11.62, and then once breaks out above some near-term overhead resistance at $14 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 105,818 shares. If that breakout hits soon, then AXDX will set up to re-test or possibly take out its 52-week high at $16.45 a share. Any high-volume move above that level will then give AXDX a chance to tag $20 a share.

Freeport-McMoRan Copper & Gold

Another integrated mining player that insiders are loading up on a huge amount of stock in here is Freeport-McMoRan Copper & Gold (FCX), which deals in the mining of copper, gold and molybdenum. Insiders are buying this stock into decent strength, since shares are up 10% so far in 2013.

Freeport-McMoRan Copper & Gold has a market cap of $39 billion and an enterprise value of $61 billion. This stock trades at a reasonable valuation, with a trailing price-to-earnings of 13.83 and a forward price-to-earnings of 11.83. Its estimated growth rate for this year is -20.2%, and for next year it's pegged at 24.5%. This is not a cash-rich company, since the total cash position on its balance sheet is $2.22 billion and its total debt is a whopping $21.12 billion. This stock currently sports a dividend yield of 3.3%.

>>Own Gold? Here's Why It's Time to Sell

A director just bought 1.5 million shares, or about $56.17 million worth of stock, at $37.38 per share.

From a technical perspective, FCX 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 $25.83 to its intraday high of $37.96 a share. During that uptrend, shares of FCX have been consistently making higher lows and higher highs, which is bullish technical price action. That said, shares of FCX have now entered overbought territory, since its current relative strength index reading is 81.15.

If you're in the bull camp on FCX, then I would look for long-biased in this stock after it's worked off some of its overbought condition. Look for this stock to pullback towards $35 or its 50-day moving average of $33.22 a share before jumping into this name from the long side.

Fusion-IO

One computer hardware player that insiders are snapping up a large amount of stock in here is Fusion-IO (FIO), a provider of data-centric computing solutions. Insiders are buying this stock into extreme weakness, since shares are down by 52% so far in 2013.

>>5 Rocket Stocks Worth Buying This Week

Fusion-IO has a market cap of $1.1 billion and an enterprise value of $727 million. This stock trades at a cheap valuation, with a price-to-sales of 2.77 and a price-to-book of 2.30. Its estimated growth rate for this year is -233.3%, and for next year it's pegged at 57.1%. This is a cash-rich company, since the total cash position on its balance sheet is $225.26 million and its total debt is zero.

The CEO just bought 105,500 shares, or about $1 million worth of stock, at $9.52 per share.

From a technical perspective, FIO is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock recently gapped down sharply from $13 to $9.40 with heavy downside volume. Following that gap down, shares of FIO have now started to rebound off that $9.40 low and it's quickly moving within range of triggering a near-term breakout trade.

If you're bullish on FIO, then look for long-biased trades as long as this stock is trending above $10 or that low of $9.40 and then once it breaks out above some near-term overhead resistance at $11.31 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 volume of 4.61 million shares. If that breakout triggers soon, then FIO will set up to re-fill some of its previous gap down zone that started just above $13 a share. If that gap gets filled with volume, then FIO could easily tap its 200-day moving average of $14.87 a share.

Mirati Therapeutics

One biopharmaceutical player that insiders love right here is Mirati Therapeutics (MRTX), which discovers, develops, and commercializes novel therapeutics with an initial focus on cancer and infectious diseases. Insiders are buying this stock into massive strength, since shares are up sharply by 93% so far in 2013.

>>2 Oversold Stocks That Could Bounce Higher

Mirati Therapeutics has a market cap of $174 million and an enterprise value of $151 million. This stock trades at a premium valuation, with a price-to-book of 27.80. Its estimated growth rate for next year is -22.5%. This is a cash-rich company, since the total cash position on its balance sheet is $20.26 million and its total debt is zero.

A beneficial owner just bought 400,000 shares, or $7 million worth of stock, at $17.50 per share. Another beneficial owner also just bought 57,143 shares, or about $1 million worth of stock, at $17.50 per share.

From a technical perspective, MRTX is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been trending sideways and consolidating for the last month, with shares moving between $16.30 on the downside and $20.90 on the upside. Shares of MRTX are now slowly starting to trend within range of triggering a breakout trade above the upper-end of its recent sideways trading chart pattern.

If you're bullish on MRTX, then look for long-biased trades as long as this stock is trending above some key near-term support levels at $16.72 or at $16.30 and then once it breaks out above some near-term overhead resistance levels at $19 to its all-time high at $20.90 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 51,282 shares. If that breakout hits, then MRTX will set up to enter new all-time high territory, which is bullish technical price action. Some possible upside targets off that breakout are $25 to $27 a share.

Coach

One final name with some big insider buying is Coach (COH), which is a marketer of fine accessories and gifts for women and men. Insiders are buying this stock into modest weakness, since shares are down by 8% so far in 2013.

>>Hack Earnings Season With These Serial Surprisers

Coach has a market cap of $14.3 billion and an enterprise value of $13.1 billion. This stock trades at a reasonable valuation, with a trailing price-to-earnings of 14.09 and a forward price-to-earnings of 13.11. Its estimated growth rate for this year is -6.2, and for next year it's pegged at 10.9%. This is a cash-rich company, since the total cash position on its balance sheet is $854.74 million and its total debt is just $985,000. This stock currently sports a dividend yield of 2.7%.

The CEO just bought 21,000 shares, or about $1.01 million worth of stock, at $48.38 per share.

From a technical perspective, COH is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock recently gapped down sharply from over $54 to $48.88 a share with heavy downside volume. Following that gap down, shares of COH have now started to rebound off that $47.88 low and enter a V-shaped uptrend.

If you're bullish on COH, then look for long-biased trades as long as this stock is trending above support at $50 or at $49, and then once it breaks out above Wednesday's high of $51.13 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 4.03 million shares. If that breakout triggers soon, then COH will set up to re-fill some of its previous gap down zone that started just above $54 a share. This stock could even tag $55 to $56 if that gap gets filled with volume.

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.


RELATED LINKS:







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 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.