5 Stocks Insiders Love Right Now

Tickers in this article: ASTI FIG PZG VRA VRNM

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.

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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, 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.

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 five stocks whose insiders have been doing some big buying per SEC filings.
Fortress Investment Group

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Insiders have been doing some sizeable buying in Fortress Investment Group , a global investment manager. Insiders are buying into some slight strength here since the stock is up around 10% so far in 2012.

Fortress Investment Group has a market cap of $712 million and an enterprise value of $645 million. This stock trades at an extremely cheap valuation, with a forward price-to-earnings of 5.95. Its estimated growth rate for this year is 2.2%, and for next year it's pegged at 34%. This is a cash-rich company, since the total cash position on its balance sheet is $333.17 million and its total debt is 261.25 million. After you back out the debt, Fortress has $71.62 million in cash on its books. This stock also has a dividend yield of 5.5%.

A director just bought 400,000 shares, or $1.39 million worth of stock, at $3.48 per share.

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From a technical perspective, FIG is currently trading below both its 50-day moving average and right above its 200-day moving average, which is neutral trendwise. This stock has been making mostly higher lows the past few months, but it's failed to make higher highs consistently. That pattern pretty puts the stock in no-man's-land until it can manage to get back above its 50-day and start making higher highs.

If you're a bull on FIG, I would only look for long biased trades once this stock breaks back above its 50-day moving average of $3.84 with strong volume. Look for volume on that move that's near or well above its three-month average action of 1.2 million shares. If we get that move soon, I would then add to any long position once it takes out some near-term overhead resistance at $4.12 to $4.38 with volume. I would simply avoid any long trades in FIG if it fails to hold a trend above its 50-day with strong upside volume flows. Paramount Gold and Silver

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Insiders are also doing some big buying in Paramount Gold and Silver , an exploration stage mining company with projects in northern Nevada and Chihuahua, Mexico. Insiders are buying into some notable strength here since the stock is up 15.9% so far in 2012.

Paramount Gold and Silver has a market cap of $338 million and an enterprise value of $322 million. This stock trades at a premium valuation, with a price-to-book of 6.41. Its estimated growth rate for this year is 81%. This is a cash-rich company, since the total cash position on its balance sheet is $7.4 million and its total debt is zero.

A beneficial owner just bought 1.17 million, or $2.4 million worth of stock, at $2.05 per share. The CEO also just bought 50,000 shares, or $111,500 worth of stock, at $2.22 per share.

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From a technical perspective, PZG is currently trading right above its 50-day moving average and right below its 200-day moving average, which is neutral trendwise. This stock has been trading range bound for the past few months, between $2 to $2.15 on the downside and $2.60 to $2.79 on the upside. This stock is quickly moving within range of challenging the upper end of its recent range.

If you're bullish on PZG, then I would look for long-biased trades once this stock breaks back above its 200-day moving average of $2.59 a share with high volume. Look for volume on that move that's near or well above its three-month average action of about 1 million shares. It's worth mention that the last two trading sessions (both up days) have produced volume of 3.9 million and 1.98 million shares traded.

If we get that move soon, then look to add to any long positions once PZG takes out some near-term overhead resistance at $2.79 to $2.83 with volume. Target a run back towards $3.06 to $3.23 a share, or possibly higher if the strong volume continues to show up and if PZG can sustain a trend above its 200-day. Vera Bradley

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Insiders are doing some decent buying in Vera Bradley , a designer, producer, marketer, and retailer of accessories for women. The company's products include offering of handbags, accessories and travel and leisure items. Insiders are buying into some slight weakness here, with shares off by around 3.4% so far in 2012.

Vera Bradley has a market cap of $1.26 billion and an enterprise value of $1.29 billion. This stock trades at a reasonable valuation, with a trailing price-to-earnings of 21.78 and a forward price-to-earnings of 15.42. Its estimated growth rate for this year is 18.9%, and for next year it's pegged at 18.8%. This is not a cash-rich company, since the total cash position on its balance sheet is $4.92 million and its total debt is $25.18 million. After you back out the cash, Vera Bradley has $20.26 million in debt on its books.

The CEO and director just bought 10,000 shares, or $304,420 worth of stock, at $30.44 per share.

From a technical perspective, VRA is currently trading below both its 50-day and 200-day moving averages, which is bearish. This stock just sold off from its recent high of $39.48 to a low of $28.50 a share with high-volume. After that slide lower, VRA found some buying interest right above a previous support level of $28.43 a share. Once buyers stepped in, the stock jumped up to its current price of $31.15 a share.

If you're a bullish on VRA, I would look for long biased trades once this stock breaks out above some near-term overhead resistance at $31.96 to $32.33 a share with high-volume. Look for volume on that move that registers near or well above its three-month action of 772,598 shares. If we get that action soon, look for VRA to make a quick pop towards its 50-day moving average of $34.75 or its 200-day moving average of $35.84. I would only add to any long positions if VRA takes those key moving averages out with high-volume.

If we do not get that breakout over $31.96 to $32.33 soon, then you could look to buy near that previous support zone at $28.50 to $28.43 a share. I would simply use a tight mental stop a few percentage points below those levels in case the stock fails to hold support.

Vera, one of 10 Stocks With Highest Profitability Ratios, was also highlighted recently in "6 Hot Stocks on Traders' Radars." Verenium

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Insiders are snapping up a large amount of stock in Verenium , which manufactures and markets its enzyme products in the fields of animal health and nutrition, grain processing, oilseed processing and other markets, such as oilfield services, pulp and paper and textiles. Insiders are buying into some big time strength here since the stock is up over 93% so far in 2012.

Verenium has a market cap of $53 million and an enterprise value of $57.79 million. This stock trades at a reasonable valuation, with a trailing price-to-earnings 10.34. Its estimated growth rate for this year is 12%, and for next year it's pegged at 30.3%. This is not a cash-rich company, since the total cash position on its balance sheet is $28.76 million and its total debt is $34.85 million. After you back out the cash, Verenium has $6.09 million in debt on its books.

A beneficial owner just bought 389,528 shares, or about $1.48 million worth of stock, at $3.76 to $3.97 per share.

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From a technical perspective, VRNM is currently trading above both its 50-day and 200-day moving averages, which is bullish. This stock has been trending strong since the start of the year, with shares soaring from a low of $2.14 to a recent high of $4.38 a share. That move has pushed the stock within range of triggering a major breakout trade if a number of past overhead resistance levels can get taken out with volume.

If you like the look of VRNM, I would consider long-biased trades if this stock can manage to break out above $4.38 to $4.68 a share with high-volume. Look for volume on that move that's near or well above its three-month average action of 109,102 shares. If we get that action soon, then VRNM could start to trend back towards its next major overheard resistance levels at $6 to $6.65 a share.

It's important that VRNM gets above $4.38 to $4.68 with volume soon and continues to trend above those levels if it's going to make a big run in the near future. A failure to hold or break out above those levels will mean VRNM isn't ready and will likely fall back below Wednesday's low of $3.78. Ascent Solar Technologies

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Insiders are also loading up on a large amount of stock in Ascent Solar Technologies , a development stage company formed to commercialize flexible photovoltaic modules using a technology. Insiders are buying into some big time strength here since the stock is up over 56% so far in 2012.

Ascent Solar Technologies has a market cap of $25.09 million and an enterprise value of $9.15 million. This stock trades at a reasonable valuation, with a price-to-sales of 6.53 and a price-to-book of 0.50. Its estimated growth rate for this year is 81.1%, and for next year it's pegged at 35.1%. This is a cash-rich company, since the total cash position on its balance sheet is $23.91 million and its total debt is $7.26 million. After you back out the cash, Ascent Solar Technologies has $16.65 million in cash on its books. This means the stock is currently trading just above its total cash per share valuation of 58 cents.

A beneficial owner just bought 8,067,390 shares, or about $4 million worth of stock, at 50 cents per share.

From a technical perspective, ASTI is currently below both its 50-day and 200-day moving averages, which is bearish. This stock saw an amazing move earlier this year when it spiked from 36 cents to $1.10 in just a few weeks. After that monster move, the stock has trended lower making mostly lower highs and lower lows. That's bearish price action and the stock has recently moved back below both its 50-day and 200-day.

If you're bullish on ASTI, I would look for long biased trades once this stock triggers a near-term breakout above 68 to 69 cents with high-volume. Look for volume on a move above those levels that hits near or well above its three-month average action of 368,954 shares. If we get that action soon, then look for ASTI to make a run at its 50-day (76 cents) or 200-day (80 cents) moving averages. I would only add to long positions if ASTI can take out those moving averages with high volume.

The biggest near-term support level for ASTI sits at 60 to 58 cents. The stock has held above those levels for the past few weeks, so you could buy off weakness and anticipate the breakout and simply use a mental stop right below those levels. If you're into buying strength, then wait for the high-volume breakout to trigger.

To see more stocks with notable insider buying like Enphase Energy , BioMimetic Therapeutics and Charming Shoppes , check out the Stocks With Big Insider Buying portfolio on Stockpickr.

-- Written by Roberto Pedone in Winderemere, Fla.

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Tickers in this article: ASTI FIG PZG VRA VRNM