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5 Stocks Insiders Love Right Now

St. Jude Medical

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Another stock that insiders are jumping into here is St. Jude Medical (STJ), which develops, manufactures and distributes cardiovascular medical devices for the management of chronic pain. Insiders are buying this stock into some modest strength, since shares are up 11% so far in 2012.

St. Jude Medical has a market cap of $12 billion and an enterprise value of $13.5 billion. This stock trades at a reasonable valuation, with a trailing price-to-earnings of 16.06 and a forward price-to-earnings of 10.62. Its estimated growth rate for this year is 4.6%, and for next year it's pegged at 5%. This is not a cash-rich company, since the total cash position on its balance sheet is $1.05 billion and its total debt is $2.52 billion.

>>10 Stock Picks of the Highest-Rated Money Managers

A director just bought 25,000 shares, or about $966,000 worth of stock, at $38.65 per share.

From a technical perspective, STJ is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been downtrending badly for the last month, with shares moving lower from $43.76 to $37.78 a share. During that downtrend, shares of STJ have gapped down once, and mostly made lower highs and lower lows, which is bearish technical price action. That said, the stock has started to find some buying interest at around $38 a share, as shares have moved into oversold territory. The current relative strength index (RSI) for STJ is 32.04, which indicates an oversold condition.

If you're in the bull camp on STJ, then I would look for long-biased as long as it's trending above some near-term support at $37.78 a share with strong upside volume flows. I would consider any upside volume day that registers near or above its three-month average action of 2.7 million shares as bullish. If STJ can maintain that trend, then look to add to any long positions once STJ takes out $40.43 to $41 a share with high volume.

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