5 Stocks Insiders Love Right Now

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. >>5 Stocks Set to Soar on Bullish Earnings 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. >>5 Breakout Stock Trades for a Santa Claus Rally 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.

CytRx

One biopharmaceutical player that insiders are in love with here is CytRx (CYTR), whose oncology pipeline includes two programs in clinical development for cancer indications: aldoxorubicin and tamibarotene. Insiders are buying this stock into strength, since shares are up sharply by 40% so far in 2013.

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CytRx has a market cap of $110 million and an enterprise value of $74 million. This stock trades at a premium valuation, with a price-to-sales of 330.20 and a price-to-book of 6.45. Its estimated growth rate for this year is 7.7%, and for next year it's pegged at 16.7%. This is a cash-rich company, since the total cash position on its balance sheet is $23.04 million and its total debt is zero. A beneficial owner just bought 284,979 shares, or about $694,000 worth of stock, at $2.35 per share. From a technical perspective, CYTR is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending strong for the last month, with shares moving higher from its low of $2 to its intraday high of $2.69 a share. During that move, shares of CYTR have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of CYTR within range of triggering a big breakout trade. If you're bullish on CYTR, then I would look for long-biased trades as long as this stock is trending above some near-term support levels at $2.32 or at $2.12, and then once breaks out above some near-term overhead resistance at $2.70 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 535,162 shares. If that breakout hits soon, then CYTR will set up to re-test or possibly take out its next major overhead resistance levels at $3.20 to $3.40 a share. Any high-volume move above those levels will then give CYTR a chance to re-test or possibly take out its 52-week high at $3.65 a share. Kratos Defense & Security Solutions Another stock that insiders are active in here is Kratos Defense & Security Solutions (KTOS), a specialized national security technology business providing mission-critical products, services and solutions for U.S. national security priorities. Insiders are buying this stock into decent strength, since shares are up 35% so far in 2013. >>5 Rocket Stocks to Buy in December Kratos Defense & Security Solutions has a market cap of $390 million and an enterprise value of $977 million. This stock trades at a cheap valuation, with a trailing price-to-earnings of 12.94. Its estimated growth rate for this year is 106.1%, and for next year it's pegged at 280%. This is not a cash-rich company, since the total cash position on its balance sheet is $49.80 million and its total debt is $644.60 million. The CEO just bought 31,273 shares, or about $199,000 worth of stock, at $6.40 per share. From a technical perspective, KTOS is currently trending above its 200-day moving average and well below its 50-day moving average, which is neutral trendwise. This stock has recently found some buying interest right around its 200-day moving average, after shares fell sharply from $8.85 to $6.32 a share. This move is starting to push shares of KTOS within range of triggering a near-term breakout trade. If you're in the bull camp on KTOS, then I would look for long-biased trades as long as this stock is trending above its 50-day at $6.60 or above its recent low of $6.32, and then once it breaks out above some near-term overhead resistance levels at $7 to $7.14 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 562,647 shares. If that breakout triggers soon, then KTOS will set up to re-test or possibly take out its next major overhead resistance levels at its 50-day moving average of $7.84 to $8.50 a share. Merrimack Pharmaceuticals One biopharmaceuticals player that insiders are jumping into here is Merrimack Pharmaceuticals (MACK), which is discovering, developing and preparing to commercialize medicines paired with companion diagnostics for the treatment of serious diseases, with an initial focus on cancer. Insiders are buying this stock into notable weakness, since shares are down by 24% so far in 2013. >>Timing the Fed's Taper Merrimack Pharmaceuticals has a market cap of $472 million and an enterprise value of $245 million. Its estimated growth rate for this year is 0.8%, and for next year it's pegged at 3.9%. This is a cash-rich company, since the total cash position on its balance sheet is $182.49 million and its total debt is $111.33 million. A director just bought 207,000 shares, or about $769,000 worth of stock, at $3.71 to $3.74 per share. Another director also just bought 75,000 shares, or about $270,000 worth of stock, at $3.51 to $3.79 per share. From a technical perspective, MACK 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 strong for the last month, with shares soaring higher from its low of $2.05 to its intraday high of $4.65 a share. During that uptrend, shares of MACK have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of MACK within range of triggering a near-term breakout trade. If you're bullish on MACK, then I would look for long-biased trades as long as this stock is trending above some near-term support levels at $4 or its 50-day at $3.29 and then once it breaks out above its 200-day moving average of $4.76 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 1.79 million shares. If that breakout hits soon, then MACK will set up to re-test or possibly take out its next major overhead resistance levels at $6.50 to $7 a share. Tronox One basic materials player that insiders are loading up on here is Tronox (TROX), which produces and markets titanium ore and titanium dioxide in the Americas, Europe and the Asia-Pacific. Insiders are buying this stock into modest strength, since shares are up huge 16% so far in 2013. >>5 Breakout Trades for the Final Stretch of 2013 Tronox has a market cap of $2.4 billion and an enterprise value of $3.3 billion. This stock trades at a premium valuation, with a forward price-to-earnings of 118.39. Its estimated growth rate for this year is -149.5%, and for next year it's pegged at 117%. This is not a cash-rich company, since the total cash position on its balance sheet is $1.46 billion and its total debt is $2.40 billion. This stock currently sports a dividend yield of 4.8%. The CEO just bought 20,000 shares, or about $426,000 worth of stock, at $21.32 per share. From a technical perspective, TROX 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 three months, with shares dropping sharply from its high of $26.69 to its recent low of $20.81 a share. During that move, shares of TROX have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of TROX have started to find some buying interest right around its 200-day moving average of $21.29 a share. If you're bullish on TROX, then I would look for long-biased trades as long as this stock is trending above some key near-term support at $20.81 and then once it breaks out above some near-term overhead resistance levels at $22.20 to its 50-day moving average at $22.88 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 641,766 shares. If that breakout hits soon, then TROX will set up to re-test or possibly take out its next major overhead resistance levels at $24.35 to $25.12 a share. Harvest Natural Resources One final name with some decent insider buying is Harvest Natural Resources (HNR), an independent energy company engaged in the acquisition, exploration, development, production and disposition of oil and natural gas properties. Insiders are buying this stock into big time weakness, since shares are off by 56% so far in 2013. Harvest Natural Resources has a market cap of $158 million and an enterprise value of $204 million. This stock trades at a reasonable valuation, with a trailing price-to-earnings of 14.72. Its estimated growth rate for this year is 95.4, and for next year it's pegged at -118.1%. This is not a cash-rich company, since the total cash position on its balance sheet is $3.93 million and its total debt is $76.79 million. A director just bought 100,000 shares, or $315,000 worth of stock, at $3.15 per share. From a technical perspective, HNR is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been uptrending strong for the last few weeks, with shares moving higher from its low of $2.76 to its recent high of $3.97 a share. During that uptrend, shares of HNR have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of HNR within range of triggering a near-term breakout trade. If you're bullish on HNR, then look for long-biased trades as long as this stock is trending above some near-term support levels at $3.50 or at $3.25 and then once it breaks out above its 200-day moving average of $4.17 and its 50-day moving average of $4.63 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 754,186 shares. If that breakout triggers soon, then HNR will set up to re-test or possibly take out its next major overhead resistance levels at $5.50 to $6.08 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. RELATED LINKS: >>5 Stocks Poised for Breakouts >>4 Health Care Stocks to Watch >>5 Stocks Under $10 Set to Soar 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 www.twitter.com/zerosum24 or @zerosum24.

Mistakes to avoid in first year of retirement

Rookie mistakes abound when you try pretty much anything for the first time. So, why should retirement be any different?

It's just that in retirement, as in skydiving, when you make a mistake, it's a lot harder to recover.

So, to help you through that first year, we asked the experts what are the biggest mistakes made by rookie retirees. Collectively, they had about a dozen, but we have boiled them down to seven.

1. Not having a financial or life plan. Not surprisingly, financial planners were nearly unanimous in the importance of visiting a financial planner and having a plan leading into retirement. "The biggest mistake you can make going into retirement is going into retirement without a plan in place. "That's critical as you're coming up on retirement," says Katherine Dean, managing director, wealth management planning for Wells Fargo Private Bank.

Failure to plan is one of the most common reasons why retirees run into problems, says David Laster, director of investment analytics at Merrill Lynch Wealth Management and author of Pitfalls in Retirement, published in the Journal of Retirement . "In one survey, by the Employee Benefits Research Institute, only 42% of workers try to calculate a budget before going into retirement. If you don't do that, that leaves you vulnerable to some unpleasant surprises in retirement. And it can be painful."

And not just financially. Lifestyle matters, too. "There is this honeymoon phase that could last a few weeks or few months," says Patrick O'Connell, executive vice president at Ameriprise Advisor Group. "After that point the people that have a good life plan are working on things that bring meaning and fulfillment into life. If they haven't thought about what they want to do that is meaningful and fulfilling, six months in, it is not this terrific experience they thought it would be," he says."

John Sweeney, executive vice president of retirement and investment strategies at Fidelity, says you have the best opportunity for a suc! cessful retirement when you talk to your financial planner – before you retire. That's when you have the most options. "Pay off your mortgage, reduce expenses, that all increases your chances of a successful retirement. If you continue to work, that will help. Using the catch-up contributions (to IRA or 401(k) will also help. Having that dialogue before they retire gives them many more options to improve success of the plan," he said.

2. Overspending. "When you are in retirement you have a lot of time on your hands," says T. Michelle Jones, vice president at Bryn Mawr Trust in Bryn Mawr, Pa. "People do more shopping, take vacations. It is important to create a real budget that includes fixed expenses and discretionary expenses. And consult a financial adviser. A lot of people are surprised to see how their money is being spent and where they are spending."

"New York Life asked a group of people how much of retirement saving can you spend without depleting your assets," Laster says. "The biggest number, 42%, said I have no idea. Income drives spending. If you retire and have accumulated a nice nest egg and there is no more paycheck, What do I do? A lot of people have no idea."

That big retirement nest egg can seem awfully tempting. "People try to enjoy all the things they have been deferring," Laster says. "They may travel a lot or splurge on presents. That's a potential risk, overspending, particularly right after retirement."

3. Claiming Social Security too early. "The biggest and most common (mistake) is that they take Social Security too soon," Jones says. "One of small things you can do is make benefits as large as possible by delaying as long as possible.

"About half of all Americans start benefits as early as possible, at age 62," she says. "Many people say, 'I want to get the most money because I don't know when I'm going to die,'" she says.

Waiting to take Social Security is a far smarter move, says Jeremy Kisner, president of Surevest Wealth Management in ! Phoenix. ! "A better move would have been not to claim it till a later date. For every year you wait between 66 and 70, your Social Security is increasing at 8% a year. In a lot of scenarios, people should be waiting."

4. Being too conservative with investments and not considering inflation. Retirees used to move most of their savings into bonds and CDs, but those days are over, given current interest rates. Sweeney says a 65-year-old should have half or more of their portfolio invested in stocks.

One reason: Bonds and CDs won't whip inflation. "We try to make folks understand the time frame they will live in retirement," he says. "If a couple lives to 65, they have a good chance that one of them will live into their 90s," he says. They need to understand inflation will erode their buying power over the 30 years or more that they are in retirement, he says.

Laster says after 2008 many people went to the safety of cash – CDs and money market funds paying zero interest. "They wanted the safety and security of high-quality Treasury bonds or something like that," he says. By doing so, however, they put themselves at real risk of outliving their money, particularly if they have to take out increasing amounts each year to compensate for inflation. "When you retire you should recognize that in all likelihood you can have another 20 or 30 years in retirement.," Laster says. It's important to have a diversified portfolio."

5. Retiring too early. "Sixty-nine percent of people plan to earn some money after they retire, but only 27% report that they have worked for money after retirement," Kisner says. "Typically, you might be at a job making $80,000. You can't come close to replacing the income. For every year you continue to work between 62 and 70, you increase your probability of success (in retirement) by 10%."

6. Underestimating life expectancy. "One that is really interesting to me, is underestimating life expectancy or longevity," Dean says."We're seeing people live much longer," she ! says. "Th! e Employee Benefits Research Institute (EBRI) is currently reporting that half of men who hit age 65 will have additional life expectancy of more than 17 years, and women, another 21 years. We see people now living into the hundreds."

7. Not having a health care strategy. "Health care costs have been rising substantially," Dean says. "Most of the population will need some kind of long-term care. That could be a substantial part of your retirement expenses. According to an EBRI survey, half of men reaching age 65 will need some sort of long-term care."

O'Connell says that not addressing the risk that health care can and will create in retirement is in his list of top three retirement mistakes. "I see clients that have well-defined plan and income strategy, but not one for health care," he says. "That's the biggest exposure and for many people the only significant thing that can cause chaos to their fiances and their family's."