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An electronic instruments player that insiders are warming up to here is
Daktronics(DAKT - Get Report), a supplier of electronic scoreboards, large electronic display systems and related marketing services, digital messaging solutions, software and services for sporting, commercial and transportation applications. Insiders are buying this stock into some decent weakness, with shares of by around 20% so far in 2012.
Daktronics has a market cap of $321 million and an enterprise value of $268 million. This stock trades at a premium valuation, with a trailing price-to-earnings of 38.25 and a forward price-to-earnings of 17.39. Its estimated growth rate for this year is 55%, and for next year it's pegged at 41.9%. This is a cash-rich company, since the total cash position on its balance sheet is $54.68 million, and its total debt is just $1.46 million.
The chairman of the board just
bought 10,000 shares, or about $72,000 worth of stock, at $7.02 per share.>>5 Stocks Under $10 Set to Soar
technical perspective, DAKT is currently trading above its 50-day moving average and below its 200-day moving average, which is neutral trendwise. This stock had been stuck in a nasty downtrend for most of 2012, with shares dropping from over $11 a share to a recent low of $6.21 a share. During that sharp move lower, shares of DAKT have consistently made lower highs and lower lows, which is bearish technical price action. That said, DAKT recently found some
high-volume buying interest at around $6.20 to $6.50 a share, and it has subsequently rallied back above its 50-day at $7.04 a share.
If you're bullish on DAKT, then I would look for long-biased trades as long as this stock is trending above its 50-day at $7.04 a share with strong upside volume flows. Look for volume that's tracking in near or above its three-month average volume of 125,998 shares. If you get long above the 50-day, then I would add to any positions once DAKT takes out its 200-day moving average of $8.76 a share with high volume.
On the flipside, I would avoid DAKT or look for short-baized trades if this stock drops back below its 50-day moving average of $7.04 with high volume. A high-volume move back below $7.04 could setup DAKT to re-test and possibly take out its June low of $6.21 a share. That move would push DAKT into new 52-week low territory, which is bearish price action.