Stock Quotes in this Article: DAVE, TFM, DXLG, UPIP, XON

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.

Fresh Market

One stock that insiders are active in here is Fresh Market (TFM), a specialty food retailer in the U.S. Insiders are buying this stock into big weakness, since shares are off by 23% over the last six months.

Fresh Market has a market cap of $1.7 billion and an enterprise value of $1.6 billion. This stock trades at a reasonable valuation, with a trailing price-to-earnings of 34.95 and a forward price-to-earnings of 19.63. Its estimated growth rate for this year is 12.9%, and for next year it's pegged at 18.4%. This is not a cash-rich company, since the total cash position on its balance sheet is $11.74 million and its total debt is $50.77 million.

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The CEO just bought 20,000 shares, or about $661,000 worth of stock, at $33.08 per share.

From a technical perspective, TFM is currently trending above its 50-day moving average and below its 200-day moving averages, which is neutral trendwise. This stock is ripping higher here right above its 50-day moving average of $34.23 a share. This move is starting to push shares of TFM within range of triggering a big breakout trade above some key near-term overhead resistance levels.

If you're bullish on TFM, then I would look for long-biased trades as long as this stock is trending above its 50-day at $34.23 or above more support at $32.54 and then once breaks out above some near-term overhead resistance levels at $36.41 to $36.50 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 1.08 million shares. If that breakout triggers soon, then TFM will set up to re-test or possibly take out its next major overhead resistance levels $$40 to $42 a share. Any high-volume move above $42 will then give TFM a chance to re-fill some of its previous gap-down-day zone from last November that started above $50 a share.

Destination XL Group

Another stock that insiders are loading up on here is Destination XL Group (DXLG), which operates as a specialty retailer of big and tall men's apparel in the U.S., England and Canada. Insiders are buying this stock into notable weakness, since shares are off by 11.9% so far in 2014.

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Destination XL Group has a market cap of $279 million and an enterprise value of $289 million. This stock trades at a premium valuation, with a forward price-to-earnings of 192.66. Its estimated growth rate for this year is -16.7%, and for next year it's pegged at 121.4%. This is not a cash-rich company, since the total cash position on its balance sheet is $4.54 million and its total debt is just $25.74 million.

A director just bought 1,598,100 shares, or about $9.04 million worth of stock, at $5.66 per share.

From a technical perspective, DXLG is currently trending above its 50-day moving average and below its 200-day moving average, which is neutral trendwise. This stock recently formed a double bottom chart pattern at $5.33 to $5.28 a share. Since forming that bottom, shares of DXLG have started to trend higher back above its 50-day moving average of $5.54 a share. That move has started to push shares of DXLG within range of triggering a near-term breakout trade.

If you're in the bull camp on DXLG, then I would look for long-biased trades as long as this stock is trending above those key support levels at $5.33 to $5.28 a share and then once it breaks out above some near-term overhead resistance at $5.71 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 259,455 shares. If that breakout materializes soon, then DXLG will set up to re-test or possibly take out its next major overhead resistance levels at its 200-day moving average of $6.22 a share to $6.40 to $6.62 a share.

Intrexon

One biotechnology player that insiders are in love with here is Intrexon (XON), which operates in the synthetic biology field. Insiders are buying this stock into modest strength, since shares are up 7.1% so far in 2014.

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Intrexon has a market cap of $2.4 billion and an enterprise value of $2.3 billion. This stock trades at a premium valuation, with a forward price-to-earnings of 365.64. Its estimated growth rate for this year is 79.3%, and for next year it's pegged at 124.1%. This is a cash-rich company, since the total cash position on its balance sheet is $177.49 million and its total debt is $1.69 million.

The CEO just bought 243,001 shares, or about $6.24 million worth of stock, at $25.72 per share.

From a technical perspective, XON is currently trending below its 50-day moving average, which is bearish. This stock recently formed a double bottom chart pattern at $24.02 to $23.87 a share. If that bottom can manage to hold, then shares of XON could set up to trigger a near-term breakout trade above some key overhead resistance levels.

If you're bullish on XON, then I would look for long-biased trades as long as this stock is trending above those support levels at $24.02 to $23.87 a share and then once it breaks out above some near-term overhead resistance levels at $26.72 to its 50-day moving average of $28.82 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 677,923 shares. If that breakout hits soon, then XON will set up to re-test or possibly take out its next major overhead resistance levels at $31.70 to $34 a share.

Famous Dave's of America

One restaurant player that insiders are jumping into here is Famous Dave's of America (DAVE), which develops, owns, operates and franchises restaurants under the Famous Dave's name. Insiders are buying this stock into big time strength, since shares are up huge by 50% so far in 2014.

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Famous Dave's of America has a market cap of $195 million and an enterprise value of $196 million. This stock trades at fair valuation, with a trailing price-to-earnings of 44.21 and a forward price-to-earnings of 18.52. Its estimated growth rate for this year is 44.6%, 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 $1.29 million and its total debt is $19.91 million.

A beneficial owner just bought 50,000 shares, or about $1.25 million worth of stock, at $25 per share.

From a technical perspective, DAVE is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock recent pulled back off its high of $31.99 a share to its 50-day moving average. Following that pullback, shares of DAVE have started to rebound higher and move within range of triggering a big breakout trade.

If you're bullish on DAVE, then I would look for long-biased trades as long as this stock is trending above its 50-day moving average of $24.16 and then once it breaks out above some near-term overhead resistance levels at $29 a share to its 52-week high at $31.99 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 50,069 shares. If that breakout gets underway soon, then DAVE will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $35 to $40 a share.

Unwired Planet

One more stock with some decent insider buying is Unwired Planet (UPIP), which develops patents that allow mobile devices to connect to the Internet. Insiders are buying this stock into strength, since shares are up sharply by 54% so far in 2014.

Unwired Planet has a market cap of $232 million and an enterprise value of $201 million. This stock trades at a premium valuation, with a price-to-sales of 2,085 and a price-to-book of 5.48. Its estimated growth rate for this year is 10.3%, and for next year it's pegged at 3.8%. This is a cash-rich company, since the total cash position on its balance sheet is $51.10 million and its total debt is $23.83 million.

A director just bought 100,000 shares, or $200,000 worth of stock, at $2 per share.
From a technical perspective, UPIP is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock recently gapped up sharply higher from $1.30 to $2.20 a share with strong upside volume. Shares of UPIP have started to come off its recent high with the stock trading around $2.12 a share. Shares if UPIP look likely to pullback more towards $2 to $1.90 a share, but if that pullback holds around those levels, then the stock can set up for a big breakout trade.

If you're bullish on UPIP, then look for long-biased trades as long as this stock is trending above some key near-term support levels at $2 to $1.90 and then once it breaks out above its 52-week high of $2.29 a share to more overhead resistance at $2.47 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 901,553 shares. If that breakout triggers soon, then UPIP will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $3.20 to $4 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.