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A computer services stock that insiders love right now is
MagicJack VocalTec(CALL - Get Report), a provider of carrier-class voice over Internet protocol and convergence solutions for fixed and wireless communication service providers. Insiders are buying this stock into some impressive strength, with shares up over 63% so far in 2012.
MagicJack VocalTec has a market cap of $470 million and an enterprise value of $432 million. This stock trades at a reasonable valuation, with a forward price-to-earnings of 13.58. Its estimated growth rate for the next quarter is 100%, and for next year it's pegged at 29.9%. This is a cash-rich company, since the total cash position on its balance sheet is $36.89 million and its total debt is just $5 million.
A director just
bought 22,000 shares, or $507,000 worth of stock, at $22.86 per share.
From a technical perspective, CALL is currently trading above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending strong for the past six months, with shares soaring from a low of $10 to a recent high off $28.22 a share. During that uptrend, the stock has consistently made higher lows and higher highs, which is bullish technical price action. That said, the stock has pulled back off its recent high of $28.22 and is not sitting right above its 50-day moving average of $22 a share.
If you're a bullish on CALL, I would look for long-biased trades once this stock breaks out above some near-term overhead resistance at $25.30 a share with high-volume. Look for volume on that move that's near or well above its three-month average action of 432,876 shares. If we get that action soon, I would then add to any long positions once CALL takes out its 52-week high of $28.22 a share with volume.
If you buy this stock off weakness in an effort to anticipate the breakout, then keep in mind that the nearest major support levels are the 50-day at $22 and then $19.60 to $18 a share. In order to increase the probability of CALL breaking out soon, then it's probably important that $19.60 holds up as support.
I also featured MagicJack early this week in "
7 Stocks Rising on Big Volume."