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Insiders are snapping up a large amount of stock in
Verenium(VRNM), which manufactures and markets its enzyme products in the fields of animal health and nutrition, grain processing, oilseed processing and other markets, such as oilfield services, pulp and paper and textiles. Insiders are buying into some big time strength here since the stock is up over 93% so far in 2012.
Verenium has a market cap of $53 million and an enterprise value of $57.79 million. This stock trades at a reasonable valuation, with a trailing price-to-earnings 10.34. Its estimated growth rate for this year is 12%, and for next year it's pegged at 30.3%. This is not a cash-rich company, since the total cash position on its balance sheet is $28.76 million and its total debt is $34.85 million. After you back out the cash, Verenium has $6.09 million in debt on its books.
A beneficial owner just
bought 389,528 shares, or about $1.48 million worth of stock, at $3.76 to $3.97 per share.
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From a technical perspective, VRNM is currently trading above both its 50-day and 200-day moving averages, which is bullish. This stock has been trending strong since the start of the year, with shares soaring from a low of $2.14 to a recent high of $4.38 a share. That move has pushed the stock within range of triggering a major breakout trade if a number of past overhead resistance levels can get taken out with volume.
If you like the look of VRNM, I would consider long-biased trades if this stock can manage to break out above $4.38 to $4.68 a share with high-volume. Look for volume on that move that's near or well above its three-month average action of 109,102 shares. If we get that action soon, then VRNM could start to trend back towards its next major overheard resistance levels at $6 to $6.65 a share.
It's important that VRNM gets above $4.38 to $4.68 with volume soon and continues to trend above those levels if it's going to make a big run in the near future. A failure to hold or break out above those levels will mean VRNM isn't ready and will likely fall back below Wednesday's low of $3.78.