One retail department and discount operator whose insiders are buying a gigantic amount of stock in is Sears Holdings (SHLD), the parent company of Kmart and Sears Roebuck. Insiders are buying into extreme weakness since this stock is down around 57% in the last six months.
Sears Holdings has a market cap of $3.37 billion and an enterprise value of $7.44 billion. This stocks trades at a price-to-sales of 0.08, and it trades at a price-to-book of 0.46. Its estimated growth rate for this year is -480%, and for next year it's pegged at 4.5%. This is far from a cash-rich company, since the total cash position on its balance sheet is $624 million and its total debt is a whopping $4.55 billion.A director and beneficial owner just bought 409,200 shares, or about $12.2 million worth of stock, at $30.99 per share. This same director also just bought 4.7 million shares, or about $136.6 million worth of stock, at $29.21 per share. From a technical standpoint, SHLD is currently trading substantially below both its 50-day and 200-day moving averages, which is bearish. This stock has been stuck in a nasty downtrend, with shares dropping from the October high of $82.74 to a recent low of $28.89 a share. Since hitting that low, this stock has started to rebound a bit, but it's still at risk of downtrending more if it can't hold that $28.89 low. The current relative strength index RSI reading for SHLD is 25.5, which demonstrates a very oversold condition. If you're a bull on SHLD, one could be a buyer of this beaten-down stock once it triggers a breakout trade above $34.65 and then $38 a share with high volume. Look for volume that's near or above its three-month average action of 1.2 million shares. Any potential move above $38 with volume should be considered significant because that's a recent gap down day high price. If SHLD can get back above $38, then it has the chance to start filling that gap down from $47 a share. I would simply use a mental stop that's a few percentage points below $34.65 if you get long off the breakout. Sears, which is rated D+ sell by TheStreet Ratings, was also recently featured in "7 Hot Stocks on Traders' Radars" and "7 Extreme Stocks to Trade in This Volatile Market."
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