5 Stocks Insiders Are Snapping Up: TripAdvisor and More

DELAFIELD, Wis. (Stockpickr) -- Corporate insiders sell their own companies' stock for a number of reasons. Must Read: Warren Buffett's Top 10 Dividend Stocks 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 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 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 five stocks whose insiders have been doing some big buying per SEC filings. Must Read: 12 Stocks Warren Buffett Loves in 2014 SFX Entertainment One entertainment player that insiders are warming up to here is SFX Entertainment , which is engaged in the production live events and digital entertainment content that focuses on the electronic music culture and other festivals. Insiders are buying this stock into massive weakness, since shares have dropped huge so far in 2014 by 63%. SFX Entertainment has a market cap of $397 million and an enterprise value of $601 million. This stock trades at a reasonable valuation, with a price-to-sales of 1.14 and a price-to-book of 1.43. Its estimated growth rate for this year is 24.3%, and for next year it's pegged at 68.7%. This is not a cash-rich company, since the total cash position on its balance sheet is $83.58 million and its total debt is $295.81 million. The CEO just bought 409,454 shares, or about $1.76 million worth of stock, at $4.23 to $4.41 per share. From a technical perspective, SFXE is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been uptrending a bit over the last few weeks, with shares moving higher from its low of $3.64 to its recent high of $4.56 a share. During that uptrend, shares of SFXE have been consistently making higher lows and higher highs, which is bullish technical price action. If you're bullish on SFXE, then I would look for long-biased trades as long as this stock is trending above some near-term support at just below $4 a share and then once it breaks out above some near-term overhead resistance at $4.56 a share and then above its 50-day moving average of $4.78 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 787,486 shares. If that breakout triggers soon, then SFXE will set up to re-test or possibly take out its next major overhead resistance levels $5.20 to $5.69 a share. Must Read: 10 Stocks George Soros Is Buying Rocket Fuel Another technology-driven advertising player that insiders are jumping into here is Rocket Fuel , which provides artificial-intelligence digital advertising solutions. Insiders are buying this stock into major weakness, since shares have plunged by a whopping 73% so far in 2014. Rocket Fuel has a market cap of $679 million and an enterprise value of $606 million. This stock trades at a reasonable valuation, with a price-to-sales of 1.83 and a price-to-book of 2.01. Its estimated growth rate for this year is -125.7%, and for next year it's pegged at 35.4%. This is a cash-rich company, since the total cash position on its balance sheet is $111.63 million and its total debt is $69.67 million. The CEO just bought 60,000 shares, or $1.03 million worth of stock, at $17.13 to $17.31 per share. From a technical perspective, FUEL is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been trying to carve out a bottom over the last month, with shares finding buying interest at $15.20, $15.74 and $15.52 a share. This stock has now started to bounce off those support levels and it's quickly moving within range of triggering a near-term breakout trade. If you're in the bull camp on FUEL, then I would look for long-biased trades as long as this stock is trending above some near-term support levels at $15.52 or at $15.20 a share and then once it breaks out above its 50-day at $16.68 to some more near-term overhead resistance at $18 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 795,100 shares. If that breakout develops soon, then FUEL will set up to re-test or possibly take out its next major overhead resistance level at $21.10 a share. Any high-volume move above $21.10 will then give FUEL a chance to re-fill its previous gap-down-day zone from August that started near $27 a share. Must Read: 7 Stocks Warren Buffett Is Selling in 2014 Rex Energy One energy player that insiders are snapping up a large amount of stock in here is Rex Energy , which operates as an independent oil and gas exploration and production company in the Appalachian and Illinois basins in the U.S. Insiders are buying this stock into massive weakness, since shares have dropped sharply over the last six months by 64%. Rex Energy has a market cap of $358 million and an enterprise value of $970 million. This stock trades at a premium valuation, with a trailing price-to-earnings of 48 and a forward price-to-earnings of 52. Its estimated growth rate for this year is -11.1%, and for next year it's pegged at -67.5%. This is not a cash-rich company, since the total cash position on its balance sheet is $87.62 million and its total debt is $692.45 million. A director just bought 487,800 shares, or about $4.28 million worth of stock, at $8.74 to $8.91 per share. From a technical perspective, REXX is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been downtrending badly for the last four months, with shares moving lower from its high of $15.62 to its new 52-week low at $6.62 a share. During that downtrend, shares of REXX have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of REXX have tried to form a double bottom chart pattern here at $6.62 to $6.64 a share. If you're bullish on REXX, then I would look for long-biased trades as long as this stock is trending above its new 52-week low of $6.62 a share and then once it breaks out above Tuesday's intraday high of $7.32 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 2.17 million shares. If that breakout develops soon, then REXX will set up to re-test or possibly take out its next major overhead resistance levels at $9 to its 50-day moving average of $9.21 a share. Must Read: 10 Stocks Carl Icahn Loves in 2014 TripAdvisor One travel player that insiders are active in here is TripAdvisor , which features reviews and advice on hotels, resorts, flights, vacation rentals, vacation packages and travel guides. Insiders are buying this stock into notable weakness, since shares have dropped by 21% over the last six months. TripAdvisor has a market cap of $10.9 billion and an enterprise value of $9.9 billion. This stock trades at a premium valuation, with a trailing price-to-earnings of 53 and a forward price-to-earnings of 30. Its estimated growth rate for this year is 16.7%, and for next year it's pegged at 30.1%. This is a cash-rich company, since the total cash position on its balance sheet is $576 million and its total debt is $346 million. The CEO just bought 13,785 shares, or about $1 million worth of stock, at $72.55 per share. From a technical perspective, TRIP is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been uptrending over the last few weeks, with shares moving higher from its low of $67.14 to its intraday high of $76.97 a share. During that uptrend, shares of TRIP have been making mostly higher lows and higher highs, which is bullish technical price action. If you're bullish on TRIP, then I would look for long-biased trades as long as this stock is trending above some key near-term support at $70 a share and then once it breaks out above Tuesday's intraday high of $76.97 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 2.35 million shares. If that breakout kicks off soon, then TRIP will set up to re-fill some more of its recent gap-down-day zone from November that started near $85 a share. Must Read: 10 Stocks Billionaire John Paulson Loves in 2014 Hi-Crush Partners LP One final stock with some decent insider buying is Hi-Crush Partners LP , which operates as a producer and supplier of monocrystalline sand. Insiders are buying this stock into large weakness, since shares have traded sharply lower b y 43% over the last three months. Hi-Crush Partners LP has a market cap of $1.40 billion and an enterprise value of $1.50 billion. This stock trades at a cheap valuation, with a trailing price-to-earnings of 12.4 and a forward price-to-earnings of 8.8. Its estimated growth rate for this year is 46.2%, and for next year it's pegged at 41.1%. This is not a cash-rich company, since the total cash position on its balance sheet is $20.62 million and its total debt is $197.12 million. This stock currently sports a dividend yield of 6.8%. The CEO just bought 30,000 shares, or about $1.61 million worth of stock, at $38.70 per share. From a technical perspective, HCLP is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been downtrending over the last three months, with shares moving lower from its high of $70.98 to its new 52-week low of $30.51 a share. During that downtrend, shares of HCLP have been making mostly lower highs and lower lows, which is bearish technical price action. That said, shares of HCLP have now started to bounce off that $30.51 low with strong upside volume flows. If you're bullish on HCLP, then I would look for long-biased trades as long as this stock is trending above Tuesday's intraday low of $36.33 or above $35 and then once it breaks out above Tuesday's intraday high of $39.64 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 694,017 shares. If that breakout materializes soon, then HCLP will set up to re-test or possibly take out its next major overhead resistance level at $42.50 a share. Any high-volume move above $42.50 will then give HCLP a chance to re-fill some of its previous gap-down-day zone from late November that started right around $47.50 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. Must Read: Warren Buffett's Top 10 Dividend Stocks 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 http://ift.tt/19UMVdH or @zerosum24.

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