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5 Stocks With Big Insider Buying

CarMax

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One used vehicle retailer that insiders are jumping into here is CarMax (KMX), which is a wholesaler of used cars and also sells new cars under franchise agreements with four new car manufacturers (Chrysler, General Motors, Nissan and Toyota). Insiders are buying this stock into big time strength, since shares are up 36% in the last six months.

CarMax has a market cap of $8.97 billion and an enterprise value $14.33 billion. This stock trades at a fair valuation, with a trailing price-to-earnings of 21.61 and a forward price-to-earnings of 19.09. Its estimated growth rate for this year is 4.5%, and for next year it's pegged at 10.2%. This is not a cash-rich company, since the total cash position on its balance sheet is $445.13 million and its total debt is a whopping $5.74 billion.

A director just bought 30,000 shares, or about $1.18 million worth of stock, at $39.43 per share.

From a technical perspective, KMX is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending strong for the last four months, with shares soaring higher from its low of $28.04 to its recent high of $40.22 a share. During that uptrend, shares of KMX have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of KMX within range of triggering a near-term breakout trade.

Traders should now look for long-biased trades in KMX as long as it's trending above some near-term support at $38.55 or above its 50-day at $37.68, and then once it manages to break out above some near-term overhead resistance levels at $40 to $40.22 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 1.85 million shares. If that breakout triggers soon, then KMX will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $45 to $50 a share.

Stock quotes in this article: SREV, GHDX, AKAM, KMX, GUID 

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