One final name in the food processing sector where insiders are doing some large buying in is Zhongpin (HOGS). This is a holding company, principally engaged in the meat and food processing and distribution business in the People's Republic of China. This is another situation where insiders are finding some deep value since the stock is off by over 50% so far in 2011.
This company has a market cap of $373 million and an enterprise value of $532 million. The stock trades at an extremely cheap valuation, since their trailing price-to-earnings is 4.95 and their forward price-to-earnings is 3.75. Zhongpin's estimated growth rate for this year is 18.2% and for next year it's pegged at 26.7%. This is not a cash-rich company, since their total cash position on their balance sheet is $151 million and their total debt is over $327 million.An analyst at Chardan Capital Markets recently said that Zhongpin may attract a takeover bid or investments from global food companies that are looking to get a piece of the growing demand for meat in China. The CEO and chairman of the board just bought 65,000 shares, or $524,900 worth of stock, between $7.90 and $8.12 per share. The vice president also just bought 40,000 shares, or $323,400 worth of stock, between $7.95 and $8.11 per share. From a technical standpoint, this stock recently collapsed from its May high of $17.31 a share to a recent low of $7.70 a share. This stock is now trading below both its 50-day and 200-day moving averages, which is bearish. That said, some buying interest has started to show up around $7.70 to $8 a share in the past few weeks. If you're looking to buy this stock, I would get long once it trades above its 50-day moving average at $9.75 a share on strong volume. Look for volume that's tracking in close to or greater than its three-month average volume of 1.1 million shares. I would add to any long position once the stock then trades above its next significant overhead resistance levels of $11.12 to $11.77 a share on strong volume. To see more stocks with notable insider buying like Air Transport Services Group (ATSG), QuinStreet (QNST) and Morgans Hotel Group (MHGC), check out the Stocks With Big Insider Buying portfolio on Stockpickr.
Twitter and become a fan on Facebook.
-- Written by Roberto Pedone in Winderemere, Fla. 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 stocks, options, futures, commodities and currencies. He is also an outside contributor to Beconequity.com and maintains the website Maddmoney.net, which he sold to Blue Wave Advisors in 2008. Roberto studied International Business at The Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV