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If you're looking for an energy company whose insiders are doing some buying, then take a look at
Vantage Drilling(VTG - Get Report), a drilling company focused on operating a fleet of drilling units. The cmpany's primary business is to contract drilling units, related equipment and work crews primarily on a dayrate basis to drill oil and natural gas wells for its customers. So far this year shares are down over 9%.
Vantage Drilling has a market cap of $533 million and an enterprise value of $1.6 billion. This stock isn't cheap, trading at a forward price-to-earnings of 30. This company isn't cash-rich, either, with a whopping $1.11 billion in debt on its balance sheet and just $51.71 million in total cash.
A beneficial owner just
bought 979,300 shares, or $1.7 million worth of stock, at $1.71 to $1.78 per share.
From a technical standpoint, this stock has dropped noticeably from its yearly high of $2.26 a share to its current price of $1.84. Shares of VTG are now just starting to trade back above both its 200-day and 50-day
moving averages. If the stock can manage to close above both of those levels, then we could be entering into a short-term bullish trend change. It's also worth pointing out that VTG is still in a longer-term bullish trend since a one-year chart shows a pattern of higher lows.
One way to play VTG is to take a long position on any weakness as long as the stock is trading above both of those key moving averages I mentioned above. One could then add to any long position once VTG breaks out above some
near-term resistance at $1.88 a share. Add again aggressively if you see VTG trade above some major past resistance at $2.50 a share.
It's worth noting that Vantage Drilling has a reasonable short interest. The current short interest as a percentage of the float for VTG stands at 5.4%. The bears have also been increasing their bets from the last reporting period by a rather large 25.6%, or by about 1.8 million shares.
One final stock that has seen some large insider buying is
Aegerion Pharmaceuticals(AEGR - Get Report), a development stage biopharmaceutical company that engages in the development and commercialization of novel therapeutics to treat severe lipid disorders. This stock is off to a decent start in 2011, with shares up over 12.2%.
This company has a market cap of $280 million and an enterprise value of $242 million. This stock is far from expensive trading at a forward price-to-earnings of 9.9. This is another cash-rich company with $46 million in total cash and just $10 million in total debt, for a net cash amount of $36 million.
Aegerion just recently did a public offering of 4.3 million shares that was priced at $15.50 per share. The company said it plans to use the funds to complete studies on a drug called lomitapide which is targeted to treat a disease that causes very high levels of bad cholesterol.
The CEO recently
bought 64,516 shares, or $999,998 worth of stock, at $15.50 per share. This is the fourth time the CEO has purchased shares this year, but this most recent buy was by far the largest.
From a technical standpoint, this stock has fallen hard since late April dropping from a high of $25.92 to its current level of $16 a share. The stock recently hit a short-term low of $14.62, which is a previous
support zonefrom back in late March.
If you want to buy this stock, look to add it on weakness and use $14.62 as your mental stop. A move below that level would have me bailing on this name since it would mean the downtrend is not over. If that level does indeed hold, then add to your position once it trades above the 50-day
moving average of $17.88, and then add again above $18 to $18.28 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 Winderemere, Fla.
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