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TheStreet Open House

5 Stocks Insiders Love Right Now


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A computer services player that insiders are warming up to here is Tucows (TCX), which is focused on serving the needs of network of resellers by providing services, interfaces, customer service, reseller-oriented technology and design and development processes. Insiders are buying this stock into some decent strength, since shares are up over 50% so far in 2012.

Tucows has a market cap of $52.34 million and an enterprise value of $52.75 million. This stock trades at a cheap valuation, with a trailing price-to-earnings of 8.03 and a forward price-to-earnings of 10.36. Its estimated growth rate for this year is 100%, and for next year it's pegged at 10%. This is not a cash-rich company, since the total cash position on its balance sheet is $4.51 million and its total debt is $4 million.

>>4 Tech Stocks Spiking on Big Volume

A director just bought 277,935 shares, or about $319,000 worth of stock, at $1.11 per share.

From a technical perspective, TCX is currently above its 200-day moving average and below its 50-day moving average, which is neutral trendwise. This stock plunged in June from $1.72 a share to $1.02 a share. During that move lower, shares of TCX were consistently making lower highs and lower lows, which is bearish technical price action. That said, the stock has now formed a double bottom at around $1.02 to $1 a share, and it's started to challenge its 50-day moving average of $1.16 a share.

If you're bullish on TCX, then I would look for long-biased trades once this stock manages to trigger a near-term breakout trade above a key downtrend line at $1.23 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 291,075 shares. If that breakout triggers soon, then TCX will have a great chance of re-testing and possibly taking out its next major overhead resistance levels at $1.34 to $1.43 a share.

Keep in mind that one could anticipate that breakout and also buy TCX off any weakness as long as it holds $1 a share. If you buy off weakness, then I would add to the position once $1.23 to $1.29 is taken out with volume.

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