5 Stocks With Big Insider Buying

Guidance Software

One more stock name consider with some decent insider buying is software player Guidance Software (GUID), a global provider of digital investigative solutions. Its EnCase platform provides an investigative infrastructure that enables our customers to search, collect and analyze electronically stored information. Insiders are buying this stock into noticeable weakness, since shares are down 16.3% so far in 2013.

Guidance Software has a market cap of $248 million and an enterprise value of $212 million. This stock trades at a reasonable valuation, with a forward price-to-earnings of 17.64. Its estimated growth rate for this year is 25%, and for next year it's pegged at 12%. This is a cash-rich company, since the total cash position on its balance sheet is $32.61 million and its total debt is just $574,000.

A beneficial owner just bought 130,049 shares, or about $1.26 million worth of stock, at $9.45 to $9.77 per share.

From a technical perspective, GUID is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock recently gapped down from around $12 a share to its recent low of $8.99 a share with heavy downside volume. Following that move, shares of GUID have started to rebound a bit towards its current price at $9.88 a share. That rebound is starting to push shares of GUID within range of triggering a near-term breakout trade.

If you're bullish on GUID, then I would look for long-biased as long as it's trending above some key support near $9.50, and then once it breaks out above its gap down day high at $10.50 a share and above its 200-day at $10.53 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 88,316 shares. If that breakout triggers soon, then GUID will set up to re-fill some of its previous gap down zone that started near $12 a share. Any high-volume move above $12 will then put $12.75 to $13 into range for shares of GUID.

To see more stocks with notable insider buying, 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 technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.

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