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TheStreet Open House

5 Stocks With Big Insider Buying

Stock quotes in this article: PLCM, MCP, HLSS, HALO, IMMR


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One stock that insiders are warming up to here is Polycom (PLCM), a global provider of communications solutions that enable enterprise, government, education and health care customers to more effectively collaborate. Insiders are buying this stock into weakness, since shares are down over 45% in the last six months.

Polycom has a market cap of $1.86 billion and an enterprise value of $1.28 billion. This stock trades at a reasonable valuation, with a trailing price-to-earnings of 19.81 and a forward price-to-earnings of 14.38. Its estimated growth rate for this year is -43.2%, and for next year it's pegged at 9%. This is a cash-rich company, since the total cash position on its balance sheet is $572.07 million and its total debt is zero.

>>5 Stocks Poised for Breakouts

A director just bought 25,000 shares, or about $237,000 worth of stock, at $9.51 per share.

From a technical perspective, PLCM is currently trading above its 50-day moving average and below its 200-day moving average, which is neutral trendwise. This stock recently came out of a nasty downtrend that took it from over $20 to its 52-week low of $7.45 a share. After hitting that low, shares of PLCM reversed its bearish trend and started to uptrend moving back above its 50-day moving average. During that move, shares of PLCM have been consistently making higher lows and higher highs, which is bullish technical price action.

If you're bullish on PLCM, then I would look for long-biased trades as long as it's trending above its 50-day moving average of $9.69 a share with strong upside volume flows. I would consider any upside volume day that registers near or above its three-month average volume of 2.9 million shares as bullish. If PLCM can maintain that trend, then this stock has a great chance of re-testing and possibly taking out its next major overhead resistance levels at $11.98 to $13.43 a share.

On the flip side, I would avoid PLCM or look for short-biased trades if this stock fails to hold that trend, and then drops back below some near-term support at $9.40 a share with heavy volume. If we get that move, then this stock could easily re-test or possible take out its 52-week low of $7.45 a share.

For another take on Polycom, it shows up on a list of 2 Oversold Stocks to Avoid.

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