One stock that insiders are in love with here is Liquidity Services
(LQDT - Get Report), which operates online auction marketplaces for sellers and buyers of surplus, salvage and scrap assets in the U.S. Insiders are buying this stock into notable strength, since shares are up sharply by 11% so far in 2014.
Liquidity Services has a market cap of $829 million and an enterprise value of $704 million. This stock trades at a fair valuation, with a trailing price-to-earnings of 19.98 and a forward price-to-earnings of 14.30. Its estimated growth rate for this year is -7.4%, and for next year it's pegged at 10.5%. This is a cash-rich company, since the total cash position on its balance sheet is $101.49 million and its total debt is zero.
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A director just bought 50,000 shares, or about $1.24 million worth of stock, at $24.91 per share.
From a technical perspective, LQDT is currently trending above its 50-day moving average and below its 200-day moving average, which is neutral trendwise. This stock has been uptrending over the last two months and change, with shares moving higher from its low of $20.37 to its recent high of $26.29 a share. During that move, shares of LQDT have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of LQDT within range of triggering a near-term breakout trade.
If you're bullish on LQDT, then I would look for long-biased trades as long as this stock is trending above some near-term support at $24 or above its 50-day at $22.81 and then once breaks out above some near-term overhead resistance $26.29 a share with 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 613,346 shares. If that breakout hits soon, then LQDT will set up to re-test or possibly take out its next major overhead resistance levels at $28.25 to its 200-day moving average of $28.69 a share. Any high-volume move above those levels will then give LQDT a chance to tag $32 to $34 a share.
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