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Another name that insiders are loading up on here is consumer goods player
Tempur-Pedic(TPX - Get Report), a manufacturer, marketer and distributor of premium mattresses and pillows, which it sells in approximately 80 countries under the TEMPUR and Tempur-Pedic brands. Insiders are finding some deep value here since this stock has plunged 55% so far in 2012.
Tempur-Pedic has a market cap of $1.5 billion and an enterprise value of $1.92 billion. This stock trades at a cheap valuation, with a trailing price-to-earnings of 7 and a forward price-to-earnings of 7.87. Its estimated growth rate for this year is -16.4%, and for next year it's pegged at 12.4%. This is not a cash-rich company, since the total cash position on its balance sheet is $134.02 million and its total debt is $566.17 million. After you back out the cash, Tempur-Pedic has a total of $432.15 million in debt on its books.
A director just
bought 112,000 shares, or around $2.80 million worth of stock, at $25.00 to $25.16 per share. Another director also just
bought 4,500 shares, or around $106,000 worth of stock, at $23.60 per share.>>5 Household-Name Stocks Ready to Boost Dividends
From a technical perspective, TPX is currently trading below both its 50-day and 200-day moving averages, which is bearish. This stock has just gapped down huge from over $40 to a low of $21.05 a share on monster volume. Since that gap-down, shares of TPX have been trending sideways between $21.05 on the downside and $25.79 on the upside. Traders should now look to play a move out of this sideways trading pattern, since it will likely setup the next major trend for TPX.
If you're in the bull camp on TPX, I would look for long-biased trades if this stock can manage to
trigger a breakout above some near-term overhead resistance at $25.79 to $26.88 a share with high-volume. Look for volume on that move that registers near or above its three-month average volume of 4.4 million shares. That $26.88 price level is significant because that's the gap-down day high price. If we get that action soon, then look for TPX to rip significantly higher as the stock starts to fill some of that massive gap.
On the flipside, I would avoid TPX or look for short-biased trades if it fails to trigger that breakout soon, and then drops below some major near-term support at $22.58 to $21.05 a share with heavy volume. A high-volume move below those levels would be very bearish for TPX, since it would push the stock into new 52-week-low territory.