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TheStreet Open House

5 Stocks Insiders Love Right Now


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One restaurant player that insiders are loading up on a large amount of stock in here is Starbucks ( SBUX), which is a roaster, marketer and retailer of coffee operating in 60 countries. Insiders are buying this stock into strength, since shares are up 31% so far in 2013.

>>4 Huge Stocks on Traders' Radars

Starbucks has a market cap of $53 billion and an enterprise value of $52 billion. This stock trades at a premium valuation, with a trailing price-to-earnings of 33.82 and a forward price-to-earnings of 26.56. Its estimated growth rate for this year is 24.6%, and for next year it's pegged at 19.3%. This is a cash-rich company, since the total cash position on its balance sheet is $2.04 billion and its total debt is $549.70 million. This stock currently sports a dividend yield of 1.2%.

A director just bought 141,573 shares, or about $9.99 million worth of stock, at $70.60 per share.

From a technical perspective, SBUX is currently trending just below its 50-day moving average and above its 200-day moving average, which is neutral trendwise. This stock has been downtrending over the last month, with shares moving lower from its high of $74.06 to its intraday low of $69.86 a share. During that move, shares of SBUX have been making mostly lower highs and lower lows, which is bearish technical price action. That said, shares of SBUX are still in a longer-term uptrend since a key uptrend line hasn't been breached.

If you're bullish on SBUX, then I would look for long-biased trades as long as this stock is trending above some key near-term support at $66.11 a share, and then once it moves back above its 50-day moving average of $71 a share high volume. Look for a sustained move or close above that level with volume that hits near or above its three-month average action of 4.48 million shares. Keep in mind that its likely SBUX pulls back below $68 a share to test that uptrend line, so that could be a good place to get long the stock.

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