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5 Stocks Insiders Love Right Now

Stocks in this article: FRXSONSTCXEQYPLCE

Children's Place Retail

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Another stock that insiders are falling in love with is Children's Place Retail (PLCE), a pure-play children's specialty apparel retailer in North America. Insiders are buying this stock into some decent strength here, since shares are up over 7% so far in 2012.

Children's Place Retail has a market cap of $1.39 billion and an enterprise value of $1.20 billion. This stock trades at reasonable valuation, with a trailing price-to-earnings of 22.37 and a forward price-to-earnings of 15.01. Its estimated growth rate for this year is 11.6%, and for next year it's pegged at 16.9%. This is a cash-rich company, since the total cash position on its balance sheet is $158.62 million and its total debt is zero.

The chairman of the board just bought 13,350 shares, or around $748,000 worth of stock, at $56.03 per share.

From a technical perspective, PLCE is currently trading above both its 50-day and 200-day moving averages, which is bullish. This stock recently gapped up large from over $52 a share to around $56 a share with heavy volume. That gap also pushed PLCE into breakout territory, since the stock took out some overhead resistance levels at $52.16 to $53.60 a share. That gap and continued momentum has now pushed PLCE within range of triggering a major breakout trade.

If you're bullish on PLCE, then I would look for long-biased trades once this stock manages to trigger a breakout trade above some past overhead resistance levels at $57.55 to $57.63 a share with high volume. Look for volume on that move that registers near or above its three-month average action of 458,656 shares. If that breakout triggers soon, then PLCE should easily trend north of $60 a share. One could also anticipate this breakout and buy the stock off any weakness as long as it holds near-term support at $55 to $54 a share.

On the flipside, I would avoid this stock for now or look for short-biased trades if it fails to trigger that breakout soon, and then drops back below some key near-term support levels at $55 to $54 a share with heavy volume. A move below $54 will setup PLCE to re-fill that previous gap and possibly take this stock down towards $52 to $50 a share.

To see more stocks with notable insider buying like Sirius XM Radio (SIRI), Zipcar (ZIP) and Imax (IMAX), check out the Stocks With Big Insider Buying portfolio on Stockpickr.

-- Written by Roberto Pedone in Winderemere, Fla.

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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 Beconequity.com and maintains the website Maddmoney.net, 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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