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Another name that insiders are doing some big buying in is
Sealy(ZZ), which, together with its subsidiaries, engages in the manufacture and marketing of bedding products. Insiders are buying into some decent strength here since the stock is up 16% so far in 2012.
Sealy has a market cap of $201 million and an enterprise value of $873 million. This stock trades at a premium valuation, with a forward price-to-earnings of 25. Its estimated growth rate for this year is 133%, and for next year it's pegged at 300%. This not a cash-rich company, since the total cash position on its balance sheet is $107.97 million and its total debt is $791.88 million.
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A beneficial owner just
bough 864,494 shares, or $1.5 million worth of stock, at $1.70 per share.
From a technical perspective, ZZ is currently trading above its 50-day and 200-day moving average, which is bullish. This stock flirted with a major breakout trade Wednesday when shares briefly traded above some major past overhead resistance at $2.02 to $2.15 a share on monster volume. Volume registered 2.57 million shares versus its three-month average volume of 403,365 shares. That said, the stock failed to close above those breakout levels, and it closed a bit off its daily high of $2.23 a share.
If you're bullish on ZZ, then I would look for long-biased trades off a sustained high-volume move and close above $2.02 to $2.15 a share. Look for volume on any move above those levels that's near or well above 403,365 shares. If we get that action soon, then look for ZZ to make a run at its next major overhead resistance levels at $2.78 to $3.11 a share.