Keynote Systems

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One more stock whose insiders are doing some large buying is Keynote Systems ( KEYN), a global provider of Internet and mobile cloud monitoring and testing solutions. Insiders are finding some value here since this stock is down by 23% so far in 2012.

Keynote Systems has a market cap of $275 million and an enterprise value of $223 million. This stock trades at a cheap valuation, with a trailing price-to-earnings of 6.02 and a forward price-to-earnings of 12.91. Its estimated growth rate for this year is -16.1%, and for next year it's pegged at 23.20%. This is a cash-rich company, since the total cash position on its balance sheet is $43.63 million and its total debt is zero.

A beneficial owner just bought 595,600 shares, or about $9.09 million worth of stock, at $15.00 per share.

From a technical perspective, KEYN is currently trading below both its 50-day and 200-day moving averages, which is bearish. This stock recently sold off hard from near $19 to a low of $14.77 a share. Following that selloff, this stock has started to find some buying interest with the stock trading up 3.2% on Wednesday to $15.75 a share in weak overall market.

If you're bullish on KEYN, I would only look for long-biased trades if this stock can manage to trigger a near-term breakout above $16 a share with high-volume. Look for volume on that move that's near or well above its three-month average action of 131,089 shares. If we get that move soon, look for KEYN to make a run at its 50-day moving average of $18.53 a share or possibly into the low $20s.

Traders should avoid KEYN or look for short-biased trades if this stock fails to get back above $16, and then drops below some near-term support at $14.77 a share with high-volume. A high-volume move below $14.77 will mean KEYN is printing a new 52-week low and is most likely heading much lower to possibly $12 a share.

To see more stocks with notable insider buying like FuelCell Energy ( FCEL), Shutterfly ( SFLY) and General Electric ( GE), 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 stocks, options, futures, commodities and currencies. He is also an outside contributor to and maintains the website, which he sold to Blue Wave Advisors in 2008. Roberto studied International Business at The Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany.

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