5 Stocks Insiders Love Right Now

Universal Stainless

An iron and steel player that insiders are jumping into here is Universal Stainless (USAP), which, together with its wholly owned subsidiaries, manufactures and markets semi-finished and finished specialty steel products, including stainless steel, tool steel and certain other alloyed steels. Insiders are buying shares into some decent strength since the stock is up 17% so far in 2012.

Universal Stainless has a market cap of $299 million and an enterprise value of $395 million. This stock trades at a cheap valuation, with a trailing price-to-earnings 17.14 and a forward price-to-earnings of 8.69. Its estimated growth rate for this year is 43.3%, and for next year it's pegged at 34.8%. This is far from a cash-rich company, since the total cash position on its balance sheet is just $274,000, and its total debt is $94.65 million.

>>5 Stocks to Trade for Breakout Gains

A beneficial owner just bought 33,339 shares, or $1.39 million worth of stock, at $41.90 to $42.19 per share. The same beneficial owner also just bought 18,638 shares, or $817,000 worth of stock, at $43.36 to $44.46 per share.

From a technical perspective, USAP is currently trading below above both its 50-day and 200-day moving averages, which is bullish. This stock has been trading range bound for the past month and change, between $45 on the upside and around $40 on the downside. A move outside of that range will most likely setup the next major trend for USAP.

If you're a bull on USAP, I would look for long-biased trades if this stock can manage to break out above some near-term overhead resistance at $44.74 to $45.03 a share with high-volume. Look for volume on that move that's near or well above its three-month average action of 50,277 shares. If we get that action soon, then target a run towards its next major near-term resistance levels at $50 to $52.70 a share.

Since this stock has failed at the upper-end of its recent range, that breakout might not be in the cards for awhile. If you want to buy USAP off of weakness, then I would let this pullback towards its 50-day moving average of $39.88, and make sure it holds that level. Basically, look to get long near the lower-end of the range as long as the 50-day does not get violated with high-volume.

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