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5 Stocks With Big Insider Buying

Chesapeake Energy

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Another name that insiders are snapping up here is Chesapeake Energy (CHK - Get Report), which is engaged in the exploration, development and acquisition of properties for the production of natural gas and oil from underground reservoirs. Insiders are finding some decent value here since this stock has plunged 14% so far in 2012.

Chesapeake Energy has a market cap of $12.16 billion and an enterprise value of $25.87 billion. This stock trades at a cheap valuation, with a trailing price-to-earnings of 7.62 and a forward price-to-earnings of 11.62. Its estimated growth rate for this year is -82.5%, and for next year it's pegged at 232.7%. This is far from a cash-rich company, since the total cash position on its balance sheet is $438 million and its total debt is a whopping $13.33 billion.

A director just bought 27,700 shares, or around $498,000 worth of stock, at $18 per share. Another director also just bought bought 20,000 shares, or around $355,000 worth of stock, at $17.75 per share.

From a technical perspective, CHK is currently trading above its 50-day moving average and below its 200-day moving average, which is neutral trendwise. This stock hit a bottom in May at $13.32 a share, after CHK plunged from over $25 a share. After hitting that bottom, shares of CHK have reversed its downtrend and started to uptrend with shares making higher lows and higher highs, which is bullish technical price action. That move has now pushed CHK within range of triggering a near-term breakout trade.

If you're in the bull camp on CHK, I would look for long-biased trades if this stock can manage to trigger a near-term break out above some resistance at $19.50 to $20.63 a share with high-volume. Look for volume on that move to register near or above its three-month average action of 36,050,900 shares. If we get that action, then CHK has a great chance of re-testing and possibly taking out its 200-day moving average of $22.30 a share.

On the flipside, I would avoid CHK or look for short-biased trades if it fails to trigger that breakout, and then drops below its 50-day moving average of $17.03, and below some near-term support at $16.32 a share with heavy volume. A high-volume move below those levels could set this stock up to trade down towards $15.50 to $14.50 a share.

As of the most recently reported quarter, Chesapeake was one of T. Boone Pickens' holdings.

To see more stocks with notable insider buying, check out the Stocks With Big Insider Buying portfolio on Stockpickr.

-- Written by Roberto Pedone in Winderemere, Fla.


Follow Stockpickr on Twitter and become a fan on Facebook.
At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Windermere, Fla., is an independent trader who focuses on stocks, options, futures, commodities and currencies. He is also an outside contributor to and maintains the website, which he sold to Blue Wave Advisors in 2008. Roberto studied International Business at The Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany.
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