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TheStreet Open House

5 Stocks Insiders Love Right Now

Tempur-Pedic International

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Another stock insiders are very active in here is Tempur-Pedic International (TPX), a manufacturer, marketer and distributor of premium mattresses and pillows. Insiders are buying this stock into some extreme weakness here, since shares are down by 38% so far in 2012.

Tempur-Pedic International has a market cap of $1.92 billion and an enterprise value of $2.5 billion. This stock trades at a cheap valuation, with a trailing price-to-earnings of 10.53 and a forward price-to-earnings of 10.40. Its estimated growth rate for this year is -12.3%, and for next year it's pegged at 11.5%. This is not a cash-rich company, since the total cash position on its balance sheet is $134.20 million and its total debt is $683.71 million.

A beneficial owner just bought 528,410 shares, or about $16.27 million worth of stock, at $30.44 to $31.50 per share.

From a technical perspective, TPX is currently trading below its 200-day moving average and above its 50-day moving average, which is neutral trendwise. This stock has been uptrending very strong for the last three months, with shares moving from a low of $20.70 to its recent high of $36.11 a share. During that uptrend, shares of TPX have mostly made higher lows and higher highs, which is bullish technical price action. That move has now pushed TPX within range of triggering a near-term breakout trade.

If you're bullish on TPX, then I would look for long-biased trades as long as its trending above $30 a share, and then once it manages to break out above some near-term overhead resistance levels at $34.29 to $36.11 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 1,909,600 shares. If that breakout triggers soon, then TPX could easily re-fill some of its gap down zone from back in June that started near $45 a share.

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