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One more stock with some large insider buying is
Digital Generation (
DGIT), which provides digital technology services that enable the electronic delivery of advertisements, syndicated programs, and video news releases to traditional broadcasters, online publishers, and other media outlets. Insiders are buying this stock into notable weakness, since shares are down by 35% so far in 2013.
Digital Generation has a market cap of $196 million and an enterprise value of $535 million. This stock trades at a cheap valuation, with a forward price-to-earnings of 13.86. Its estimated growth rate for this year is 101.7%, and for next year it's pegged at 240%. This is not a cash-rich company, since the total cash position on its balance sheet is $47.33 million and its total debt is $403.12 million.
A beneficial owner just
bought 467,000 shares, or about $3.03 million worth of stock, at $6.23 per share.
From a technical perspective, DGIT is currently trending above its 50-day moving average and well below its 200-day moving average, which is neutral trendwise. This stock has recently started to trend back above its 50-day moving average at $6.96 a share. That move is quickly pushing shares of DGIT within range of triggering a near-term breakout trade.
If you're bullish on DGIT, then look for long-biased trades as long as this stock is trending above $6.50, and then once it breaks out above some near-term overhead resistance levels at $7.50 to $8 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 566,939 shares. If that breakout triggers soon, then DGIT will set up to re-test or possibly take out its next major overhead resistance levels at $9 to $10 a share.
To see more stocks with notable insider buying, check out the
Stocks With Big Insider Buying portfolio on Stockpickr.
-- Written by Roberto Pedone in Madison, Wis.