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TheStreet Open House

5 Stocks With Big Insider Buying

Stocks in this article: TQSIINCTPNKDOLE

Pinnacle Entertainment

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Another name that insiders find attractive here is casinos and gaming player Pinnacle Entertainment (PNK), an owner, operator and developer of casinos and related hospitality and entertainment facilities. Insiders are buying this stock into some modest strength, with shares up around 7% so far in 2012.

Pinnacle Entertainment has a market cap of $679 million and an enterprise value of $1.92 billion. This stock trades at a reasonable valuation, with a trailing price-to-earnings of 19.48 and a forward price-to-earnings of 12.49. Its estimated growth rate for this year is 50.8%, and for next year it's pegged at -5.4%. This is not a cash-rich company, since the total cash position on its balance sheet is $202.80 million and its total debt is $1.44 billion.

The vice president just bought 10,000 shares, or around $102,000 worth of stock, at $10.24 to $10.35 per share. The CEO also just bought 25,100 shares, or around $242,000 worth of stock, at $9.41 to $9.73 per share.

From a technical perspective, PNK is currently trading above both its 50-day and 200-day moving averages, which is bullish. This stock just found some big buying interest during the last two months, since it formed a major bottom at around $8.93 to $9 a share. Following that bottom, shares of PNK have soared with high volume back above both its 50-day and 200-day moving averages. This stock has also just started to breakout above some near-term overhead resistance at $10.33 a share.

If you're in the bull camp on PNK, then I would look for long-biased trades once this stock pulls back closer to its 200-day moving average of $10.38 a share. Basically, look to buy this stock off weakness and anticipate a possible re-test and possibly breakout above its next major overhead resistance levels at $11.76 to $11.91 a share.

On the flipside, I would probably just avoid this stock if it drops back below its 200-day moving average at $10.38 a share, or below some recent breakout levels of $10.33 to $9.89 a share with high volume. A move below those levels will likely mean that PNK is heading back towards those major support zones at $8.93 to $9 a share.

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