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TheStreet Open House

5 Stocks With Big Insider Buying

Stock quotes in this article: NSPH, DLTR, FCE.A, VITC


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One stock whose insiders are doing some active buying in is Nanosphere (NSPH), which develops, manufactures and markets an advanced molecular diagnostics platform, the Verigene System, that enables sensitive genomic and protein testing on a single platform. Insiders clearly see value here; this stock has been crushed in 2011, with shares off by over 70%.

Nanosphere has a market cap of $49.96 million and an enterprise value of -$7.18 million. The company is currently not profitable, with an operating cash flow of -$32.94 million and levered free cash flow of -$26.31 million. This is a cash-rich company, since the total cash position on its balance sheet is $54.53 million and its total debt is zero.

A director and beneficial owner just bought 285,235 shares, or $314,928 worth of stock, at $1.10 per share. The CEO also recently bought 10,000 shares, of $9,000 worth of stock, at 90 cents per share.

From a technical standpoint, this stock is currently below both its 50-day and 200-day moving averages, which is bearish. That said, the stock is quickly approaching a crossover of its 50-day of $1.25, and volume going into the potential move is strong. Volume on Wednesday hit over 670,000 shares as the stock closed up 5.5%. That volume is well above its three-month average volume of 347,700 shares.

If you like this stock, I would look to get long once it busts above that 50-day moving average with volume. I would then add aggressively to any long position once the stock takes out $1.38 to $1.48 a share with volume. Target a run back towards $1.70 or possibly even higher if this stock wants to trend up significantly from current levels. Use a mental stop just below the 50-day if/when it does cross back above that key technical level.

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