5 Stocks Insiders Love Right Now

ShoreTel

Another stock where key insiders are active in is business communication solutions provider ShoreTel (SHOR). This company, together with its subsidiaries, engages in the development and sale of Internet protocol communications systems for enterprises in the U.S. and internationally. This stock is off to a slow start in 2012 with shares off by around 5.9%.

ShoreTel has a market cap of $287 million and an enterprise value of $164 million. This stock trades at a steep valuation, since its forward price-to-earnings is 28.57. Its estimated growth rate for this quarter is -400%, and for this year it's pegged at -100%. This is a cash-rich company, with a total cash position on its balance sheet of $115.85 million and total debt of zero.

The CEO just bought 17,200 shares, or $100,000 worth of stock, at $5.82 per share. A director also just bought 91,900 shares, or $503,000 worth of stock, at $5.47 per share.

From a technical perspective, SHOR is currently trading below both its 50-day and 200-day moving averages, which is bearish. This stock recently ran into resistance at around $7.28 a share, which happens to near the level it hit resistance at back in September of last year. After finding sellers at $7.28, this stock plunged on monster volume down to a recent low of $5.30 a share.

If you're bullish on SHOR, I would look to get long this stock once it takes out the 50-day moving average of $6.31 with high-volume. Look for volume that's near or well above its three-month average volume of 312,421 shares. One could also be a buyer off any weakness as long as that low of $5.30 a share isn't violated. I like that the upside volume has been strong for the last couple of trading sessions, so look for continued upside if that 50-day gets taken out soon with strong volume.

To see more stocks with notable insider buying, including General Electric (GE), Blackrock (BLK) and Exco Resources (XCO), check out the Stocks With Big Insider Buying portfolio on Stockpickr. Follow @stockpickr

-- Written by Roberto Pedone in Winderemere, Fla.

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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.

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