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One real estate investment and finance player that insiders are loading up on here is
Newcastle Investment(NCT), which invests in, and actively manages, a portfolio of real estate securities, loans, excess mortgage servicing rights and other real estate related assets. Insiders are buying up shares in this name into some major strength, since the stock is up over 60% so far in 2012.
Newcastle Investment has a market cap of $926 million and an enterprise value of 44.27 billion. This stock trades at an extremely cheap valuation, with a trailing price-to-earnings of 3.18 and a forward price-to-earnings of 4.97. Its estimated growth rate for this year is -47.6%, and for next year it's pegged at -7.4%. This is not a cash-rich company, since the total cash position on its balance sheet is $158.26 million and its total debt is a whopping $3.35 billion. This stock sports a large dividend yield of 10.8%.
A director just
bought 300,000 shares, or around $2.01 million worth of stock, at $6.70 per share. The secretary also just
bought 150,000 shares, or around $1 million worth of stock, at $6.70 per share. It looks like both of these purchases were part of a spot secondary offering of 22 million shares on July 26.
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From a technical perspective, NCT 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 trending higher from $5.02 to its recent high of $7.50 a share. During that uptrend, shares of NCT have mostly been making higher lows and higher highs, which is bullish technical price action. That move has now pushed NCT within range of triggering a major breakout trade.
If you're bullish on NCT, then I would look for long-biased trades once this stock manages to clear some overhead resistance levels at $7.41 to $7.89 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 3,173,240 shares. If we get that action soon, then NCT has a great chance of trading up towards $10 a share.
One could buy this stock off any weakness and simply use a stop just below its 50-day moving average of $6.78 a share. Or you can buy off strength once it clears $7.41 to $7.89 a share with heavy volume, and simply use a stop just below $7.41, or down toward $7 a share if you want to give it more room.