Stock Quotes in this Article: GDOT, HAIN, JNS, KMR, TTWO

WINDERMERE, Fla. (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.


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.


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.


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.


Green Dot

One financial player that insiders are active in here is Green Dot GDOT. This company provides money management solutions in the U.S. It offers general purpose reloadable prepaid debit cards, and cash loading and transfer services. Insiders are buying this stock into some extreme weakness, since shares are down more than 60% so far in 2012.


Green Dot has a market cap of $417 million and an enterprise value of $235 million. This stock trades at a cheap valuation, with a trailing price-to-earnings of 9.14 and a forward price-to-earnings of 8.20. Its estimated growth rate for the next quarter is negative 11.4%, and for next year it's pegged at a positive 15.4%. This is a cash-rich company, since the total cash position on its balance sheet is $237.03 million and its total debt is $49.12 million.


The CEO and chairman of the board just bought 89,000 shares, or about $995,453 million worth of stock, at $11.05 per share.


From a technical perspective, GDOT is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending modestly for the last month and change, with shares rising from a low of $9.54 to its recent high of $11.93 a share. During that uptrend, shares have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed GDOT within range of triggering a near-term breakout trade.


If you're bullish on GDOT, then I would look for long-biased trades once this stock manages to break out above some near-term overhead resistance at $11.93 a share with high volume. Look for a sustained move or close above $11.93 with volume that hits near or above its three-month average action of 686,456 shares. If that breakout triggers soon, then look for GDOT to re-fill its previous gap down zone from October that started near $13 a share. Any high-volume move above $13.19 to $13.59 would then give GDOT a chance to fill an even bigger gap down zone from July that started near $23 a share.


Hain Celestial Group

Another name in the food processing complex that insiders are jumping into here is Hain Celestial Group HAIN. This company, and its subsidiaries manufacture, market, distribute and sell natural and organic products. Insiders are buying this stock into some extreme strength, since shares are up a whopping 65% so far in 2012.


Hain Celestial Group has a market cap of $2.79 billion and an enterprise value of $3.15 billion. This stock trades at a reasonable valuation, with a trailing price-to-earnings of 33.51 and a forward price-to-earnings of 21.25. Its estimated growth rate for this year is 30.1%, and for next year it's pegged at 17.8%. This is not a cash-rich company, since the total cash position on its balance sheet is $36.15 million and its total debt is $360.50 million.


A beneficial owner just bought 34,400 shares, or about $2.03 million worth of stock, at $59.02 per share.


From a technical perspective, HAIN is currently trending below its 50-day moving average and above its 200-day moving average, which is neutral trendwise. This stock has been downtrending for the last two months, with shares falling from a high of $73.72 to its recent low of $56.46 a share. During that downtrend, shares of HAIN have been consistently making lower highs and lower lows, which is bearish technical price action. That said, the stock has started to rebound off that low and is now moving within range of triggering a near-term breakout trade.


If you're in the bull camp on HAIN, then I would look for long-biased trades once this stock manages to break out above some near-term overhead resistance levels at $62.11 to $63.33 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 835,943 shares. If that breakout triggers soon, then HAIN will set up to re-test or possibly take out its next major overhead resistance levels at $66.21 to $70 a share.


Take-Two Interactive Software


One video game player that insiders are warming up to here is Take-Two Interactive TTWO. This company is a developer, marketer and publisher of interactive entertainment for consumers around the globe. The company develops and publishes products through its two wholly-owned labels Rockstar Games and 2K. Insiders are buying this stock into some modest weakness, since shares are down by 15% so far in 2012.


Take-Two Interactive Software has a market cap of $1.04 billion and an enterprise value of $1.04 billion. This stock trades at a cheap valuation, with a forward price-to-earnings of 5. Its estimated growth rate for this year is 140.8%, and for next year it's pegged at 693.10%. This is barely a cash-rich company, since the total cash position on its balance sheet is $328.28 million and its total debt is $325.54 million.


A beneficial owner just bought 1,098,200 shares, or about $12.56 million worth of stock, at $11.44 per share. That same beneficial owner also just bought 918,911 shares, or about $10.20 million worth of stock, at $11.09 per share.


From a technical perspective, TTWO is currently trending above its 50-day moving average and just below its 200-day moving average, which is neutral trendwise. This stock has been uptrending very strong for the last three months, with shares moving from a low of $7.37 to its recent high of $11.79 a share. During that uptrend, shares of TTWO have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed TTWO within range of triggering a near-term breakout trade.


If you're bullish on TTWO, then I would look for long-biased trades if this stock can manage to break out above some near-term overhead resistance levels at $11.79 to $12.05 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 1,951,630 shares. If that breakout triggers soon, then look for TTWO to trend up towards $14 to $16 a share. Any high-volume move above $16.99 to $17.58 a share would then put $20 into range of TTWO.


Janus Capital


Another name that insiders are snapping up a large amount of shares in is Janus Capital JNS. This company provides investment management, administration, distribution and related services to individual and institutional investors through mutual funds, separate accounts and subadvised relationships. Insiders are buying this stock into some notable strength, since shares are up over 25% so far in 2012.

Janus Capital has a market cap of $1.50 billion and an enterprise value $1.35 billion. This stock trades at a fair valuation, with a trailing price-to-earnings of 13.83 and a forward price-to-earnings of 13.59. Its estimated growth rate for this year is -38.1%, and for next year it's pegged at 13.5%. This is a cash-rich company, since the total cash position on its balance sheet is $683.60 million and its total debt is $542.80 million.


A beneficial owner just bought 1,282,419 shares, or about $10.29 million worth of stock, at $7.95 per share. That same beneficial owner also just bought 1,185,236 shares, or about $9.71 million worth of stock, at $8.19 per share.


From a technical perspective, JNS is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been downtrending for the last two months, with shares dropping from $9.52 to its recent low of $7.86 a share. During that downtrend, shares of JNS have been mostly making lower highs and lower lows, which is bearish technical price action. That said, the stock has recently started to find some buying support just below $8 share.


If you're in the bull camp on JNS, then I would look for long-biased trades once this stock manages to break out above some near-term overhead resistance levels at $8.10 to $8.81 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 3,011,480 shares. If that breakout triggers soon, then JNS will set up to re-test or possibly take out its next major overhead resistance levels at $9.52 to $9.71 a share. Any high-volume move above those levels will then put $10 to $11 into focus for JNS.


Kinder Morgan Management


The last name to consider with some decent insider buying is oil well services and equipment player Kinder Morgan Management KMR. This company operates as a pipeline transportation and energy storage company in North America. Its pipelines transport natural gas, refined petroleum products, crude oil, carbon dioxide and other products. This stock has traded flat so far in 2012, with shares down by just 7.9%.


Kinder Morgan Management has a market cap of $8.22 billion and an enterprise value of $8.19 billion. This stock trades at a fair valuation, with a forward price-to-earnings of 28.51. Its estimated growth rate for this year is 34.8%, and for next year it's pegged at 15.4%.


The CEO and chairman of the board bought 20,000 shares, or around $1.54 million worth of stock, at $72.74 per share.


From a technical perspective, KMR is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been downtrending for the last month and change, with shares falling from $79 to its recent low of $70.71 a share. During that downtrend, shares of KMR have been mostly making lower highs and lower lows, which is bearish technical price action. That move has now pushed KMR near oversold levels, since its current relative strength index (RSI) reading is now 32.


If you're bullish on KMR, then I would look for long-biased trades once this stock manages to break out above some near-term overhead resistance at $74.19 to $75.68 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 403,375 shares. If KMR triggers that breakout soon, then look for this stock to re-test or possibly take out its next major overhead resistance levels at $76.50 to $78 a share. Any high-volume move above those levels will then put $78.61 to $79 into focus for KMR.


To see more stocks with notable insider buying like Theravance THRX and UnitedHealth Group UNH, check out the Stocks With Big Insider Buying portfolio on Stockpickr.


-- Written by Roberto Pedone in Winderemere, Fla.



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

Roberto Pedone, based out of Windermere, Fla., 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.