5 Stocks With Big Insider Buying
Dollar Tree
One market-leading stock that insiders are stepping up and doing some buying in is Dollar Tree (DLTR), which operates discount variety stores in the U.S. and Canada. Insiders are paying up here to own stock, since this name has returned over 40% so far in 2011.
This company has a market cap of $9.82 billion and an enterprise value of $9.5 billion. The stock trades at a reasonable valuation, since its trailing price-to-earnings is 22.3 and its forward price-to-earnings is 17.4. Dollar Tree's estimated growth rate for this year is 21.6%, and for this year it's pegged at 16.8%. This is a cash-rich company; the total cash position on its balance sheet is $545.40 million, and its total debt is $265.50 million. After you back out the debt, Dollar Tree has $279.90 million of cash on the books.
A director just bought 5,000 shares, or $399,211 worth of stock, at $79.84 per share. This same director also bought 5,000 shares, or $325,000 worth of stock, at $63.14 per share back in June. From a technical standpoint, this stock is currently trading well above both its 50-day and 200-day moving averages, which is bullish. The stock has also just started to break out above some past overhead resistance at $79.35 a share. The only problem with this recent breakout is that it's coming on light volume. That said, the stock is now trading near brand new all-time highs. If you like this stock, I would probably hold off on getting long since the breakout volume is light and the relative strength index is near 70, which indicates an overbought condition. I would look to get long on the next meaningful pullback that takes the stock closer to its 50-day moving average of $73.23. Keep in mind that if volume does start to come in and the stock is above $81, then it might just get momentum and trend up despite the overbought condition. Dollar Tree, one of TheStreet Ratings' top-rated multiline retail stocks, is also one of the top holdings at Steve Mandel's Lone Pine Capital.Select the service that is right for you!
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