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TheStreet Open House

5 Stocks Insiders Are Scooping Up

Stock quotes in this article: FSYS, NYX, CVS, TWO, HALO

Two Harbors Investment

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A stock in the real estate operations complex where insiders are snapping up a notable amount of stock in is Two Harbors Investment (TWO). This company operates as a real estate investment trust (REIT), which focuses on investing in, financing and managing residential mortgage-backed securities (RMBS), and related investments. Insiders are buying into some modest strength here since the stock is up over 9.4% so far in 2012.

Two Harbors Investment has a market cap of $1.42 billion and an enterprise value of $6.5 billion. This stock trades at a cheap valuation, since its trailing price-to-earning is 7.84.This is far from a cash-rich company, since the total cash position on its balance sheet is $1.62 billion and its total debt is a whopping $6.7 billion.

The CEO and president just bought 50,000 shares, or $495,000 worth of stock, at $9.90 per share.

From a technical perspective, TWO is currently trading above both its 50-day and 200-day moving averages, which is bullish. This stock found big buying support a few months ago at around $8.40 to $8.58 a share. Since buyers stepped in at those levels, the stock has uptrended strong towards its current price of just over $10 a share. Now shares of TWO are within range of triggering a big breakout.

If you're bullish TWO, I would look for long biased trades once this stock breaks out above some past overhead resistance at $10.15 with big volume. Traders should look for a sustained high-volume move and close above $10.15 to signal that this stock wants to trend much higher. Look for volume on that move that registers near or well above its three-month average volume of 3.138,280 shares.

To see more stocks with notable insider buying, including Sealed Air (SEE), Dominion Resources (D) and PostRock Energy (PSTR), check out the Stocks With Big Insider Buying portfolio on 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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