Life Time Fitness

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Another stock that insiders love right now is Life Time Fitness ( LTM), which operates multi-use sports and athletic, professional fitness, family recreation and spa centers in a resort-like environment. This stock has pretty much done nothing so far in 2012, with shares off by just 1.8%.

Life Time Fitness has a market cap of $1.90 billion and an enterprise value of $2.57 billion. This stock trades at a reasonable valuation, with a trailing price-to-earnings of 19.31 and a forward price-to-earnings of 14.63. Its estimated growth rate for this year is 21.7%, and for next year it's pegged at 13.8%. This is far from a cash-rich company, since the total cash position on its balance sheet is just $10.80 million and its total debt is a whopping $650.48 million.

The CEO and chairman of the board just bought 16,905 shares, or $745,000 worth of stock, at $44.07 per share.

>>5 Breakout Trades to Take in May

From a technical perspective, LTM is currently trading above its 200-day moving average and below its 50-day moving average, which is neutral trendwise. This stock formed a triple top just a few months ago, between $52.14, $52.26 and $52.68 a share. After running into heavy selling resistance at those levels, shares of LTM have dropped back below its 50-day moving average on monster volume. Also, during the last month and change LTM has been making lower highs and lower lows, which is bearish technical price action.

If you're a bullish on LTM, I would look for long-biased trades if this stock can manage to break out above some near-term overhead resistance at $47.57 to $49.88 a share with high volume. Look for volume on that move that's near or well above its three-month average action of 455,465 shares. If we get that action soon, then LTM could challenge its recent high of $52.68 a share.

I would avoid this stock or look for short-biased trades if LTM moves back below its 200-day moving average of $43.55 and below some near-term support at $43.15 a share with high-volume. A high-volume move below those levels would continue the near-term downtrend pattern for LTM, and it would possibly push the stock towards its next significant support zones at $39.04 to $37.55 a share.

Life Time Fitness shows up on a list of 10 Small-Cap Stocks Safe for Skittish Investors.

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