Stock Quotes in this Article: ABIO, JPM, KCG, RGS, YRCW

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, it's 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 five stocks whose insiders have been doing some big buying per SEC filings.

YRC Worldwide

One trucking player that insider are snapping up a huge amount of stock in here is YRC Worldwide (YRCW), which provides various transportation services primarily in North America. Insiders are buying this stock into major strength, since shares are up 101% during the last three months.

YRC Worldwide has a market cap of $221 million and an enterprise value of $1.4 billion. This stock trades at a cheap valuation, with price-to-sales of 0.05. Its estimated growth rate for this year is 24.9%, and for next year it's pegged at 79.8%. This is not a cash-rich company, since the total cash position on its balance sheet is $170.50 million and its total debt is $1.36 billion.

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A beneficial owner just bought 4.1 million shares, or about $61.99 million worth of stock, at $15 per share. Another beneficial owner also just bought 2,333,333 shares, or about $34.99 million worth of stock, at $15 per share.

From a technical perspective, YRCW is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending strong over the last month, with shares moving higher from its low of $11.81 to its recent high of $23.93 a share. During that move, shares of YRCW have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of YRCW within range of triggering a near-term breakout trade.

If you're bullish on YRCW, then I would look for long-biased trades as long as this stock is trending above its 200-day moving average of $17.85 and then once breaks out above some near-term overhead resistance at $23.93 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 1.70 million shares. If that breakout hits soon, then YRCW will set up to re-fill some of its previous gap-down-zone day from last August that started near $30 a share.

KCG Holdings

Another investment brokerage player that insiders are loading up on here is KCG Holdings (KCG), which operates a proprietary trading business that engages in market making, buying, selling and dealing in securities, commodities, options and exchange-traded futures on exchanges worldwide. Insiders are buying this stock into solid strength, since shares are up 27% during the last three months.

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KCG Holdings has a market cap of $1.36 billion and an enterprise value of $2.66 billion. This stock trades at a cheap valuation, with a trailing price-to-earnings of 2.08. This is not a cash-rich company, since the total cash position on its balance sheet is $798.71 million and its total debt is $2.11 billion.

The CEO just bought 805,000 shares, or about $8.89 million worth of stock, at $11.04 per share. Another director also just bought 100,000 shares, or about $1.10 million worth of stock, at $11.04 per share.

From a technical perspective, KCG is currently trending above its 200-day moving average and just below is 50-day moving average, which is neutral trendwise. This stock recently found some buying interest right off its 200-day moving average of $10.61 a share, after the stock dropped from its recent high of $12.61 a share. That spike off its 200-day is now starting to push shares of KCG within range of triggering a near-term breakout trade.

If you're in the bull camp on KCG, then I would look for long-biased trades as long as this stock is trending above its 200-day at $10.61 or above more support at $10.56 and then once it breaks out above its 50-day moving average of $11.67 to more resistance at $12 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 496,194 shares. If that breakout triggers soon, then KCG will set up to re-test or possibly take out its 52-week high at $12.61 a share. Any high-volume move above that level will then give KCG a chance to tag its next major overhead resistance levels at $13.39 a share.

Arca Biopharma

One biopharmaceutical player that insiders are in love with here is Arca Biopharma (ABIO), which focuses on developing genetically-targeted therapies for cardiovascular diseases. Insiders are buying this stock into strength, since shares are up 29% during the last three months.

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ARCA Biopharma has a market cap of $28.3 million and an enterprise value of $11.9 million. This stock trades at a fair valuation, with a price-to-book of 1.31. This is a cash-rich company, since the total cash position on its balance sheet is $18.63 million and its total debt is zero.

A beneficial owner just bought 1,000,000 shares, or about $1.70 million worth of stock, at $1.70 per share.

From a technical perspective, ABIO is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been downtrending over the last few weeks, with shares falling from $2.28 to $1.68 a share. During that move, shares of ABIO have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of ABIO have held above is 200-day moving average of $1.64 a share off that pullback.

If you're bullish on ABIO, then I would look for long-biased trades as long as this stock is trending above its 200-day moving average of $1.64 and then once it takes out some near-term overhead resistance levels at $1.90 to $2.07 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 volume of 1.51 million shares. If we get that move soon, then ABIO will set up to re-test or possibly take out its next major overhead resistance levels $2.28 to $2.54 a share.

JPMorgan Chase

One money center bank that insiders are jumping into in a big way here is JPMorgan Chase (JPM), which provides various financial services worldwide. Insiders are buying this stock into modest strength, since shares are up 6% during the last three months.

JPMorgan Chase has a market cap of $207 billion and an enterprise value of -$130 billion. This stock trades at a cheap valuation, with a trailing price-to-earnings of 12.64 and a forward price-to-earnings of 8.66. Its estimated growth rate for this year is 37.5%, and for next year it's pegged at 6.2%. This is a cash-rich company, since the total cash position on its balance sheet is $978.60 billion and its total debt is $641.82 billion. This stock currently sports a dividend yield of 2.8%.

A director just bought 500,000 shares, or about $27.76 million worth of stock, at $55.41 per share.

From a technical perspective, JPM 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 over the last few weeks, with shares sliding lower from its high of $59.82 to its recent low of $54.20 a share. During that move, shares of JPM have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of JPM have so far held above its 200-day moving average of $53.37 a share off this pullback.

If you're bullish on JPM, then I would look for long-biased trades as long as this stock is trending above its 200-day moving average of $53.37 and then once it breaks out back above its 50-day moving average of $56.95 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 18.16 million shares. If we get that move soon, then JPM will set up to re-test or possibly take out its next major overhead resistance level at its 52-week high at $59.82 a share. Any high-volume move above that level will then give JPM a chance to tag $65 to $70 a share.

Regis

One final stock with huge insider buying is Regis (RGS), which owns, operates, and franchises hairstyling and hair care salons for men, women, and children in the U.S., Canada, Puerto Rico, and the U.K. Insiders are buying this stock into major weakness, since shares down by 29% during the last six months.

Regis has a market cap of $709 million and an enterprise value of $650 million. This stock trades at a premium valuation, with a forward price-to-earnings of 66.63. Its estimated growth rate for the next quarter is 66.7%, and for this year it's pegged at -100%. This is a cash-rich company, since the total cash position on its balance sheet is $339.42 million and its total debt is $294.15 million. This stock currently sports a dividend yield of 1.9%.

A director just bought 1,502,507 shares, or about $18.26 million worth of stock, at $12.13 to $12.50 per share.
From a technical perspective, RGS is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock recently gapped down sharply lower from around $14 to $11.48 a share with monster downside volume. Following that move, shares of RGS have started to rebound off that $11.48 low and the stock is now starting to move within range of triggering a major breakout trade.

If you're bullish on RGS, then look for long-biased trades as long as this stock is trending above $12 or above its 52-week low at $11.48 and then once it breaks out above some near-term overhead resistance levels at $12.75 to $12.79 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 720,190 shares. If that breakout triggers soon, then RGS will set up to re-fill some of its previous gap-down-day zone that started near $14 a share. If that gap gets filled with volume, then RGS could tag its 50-day at $14.36 or even $15 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.