Dole Food

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The last name to consider with some large insider buying is food processing player Dole Food ( DOLE), a producer of bananas and pineapples, and packaged fruit products, packaged salads and fresh-packed vegetables. Insiders are buying this stock into some decent strength here, since shares are up around 36% so far in 2012.

Dole Food has a market cap of $1.03 billion and an enterprise value of $2.57 billion. This stock trades at reasonable valuation, with a trailing price-to-earnings of 28.42 and a forward price-to-earnings of 8.17. Its estimated growth rate for this year is -5.1%, and for next year it's pegged at 9.2%. This is far from a cash-rich company, since the total cash position on its balance sheet is $94.12 million and its total debt is a whopping $1.64 billion.

The CEO and chairman of the board just bought 278,800 shares, or about $2.83 million worth of stock, at $9.67 to $10.45 per share.

From a technical perspective, DOLE is currently trading above both its 50-day and 200-day moving averages, which is bullish. This stock has been trading range bound for the past four months, with shares changing hands between $8.35 and $10.50 a share. In just the past few trading sessions, DOLE has started to take out that upper-end of that range, and break out above its March high of $11.39 with large volume.

Keep in mind that DOLE is one of the stocks that saw an unusual volume spike today that's being blamed one some technical computer glitches. Volume today is already over 4.3 million which is dramatically above its three-month average action of 805,922 shares.

If you're bullish on DOLE, then I would look for long-biased trades in this stock as long as it's trending above $10.50 to $11.39 a share with strong upside volume flows. I would consider any upside volume day that registers near or above 805,922 shares. If we continue to see that action, then DOLE has a great chance of re-testing and possibly taking out its 2011 highs at $14.58 to $14.99 a share.

I would simply avoid DOLE for now if it moves back below $10.50 to $10 a share with heavy volume. A move back below those levels could mean that the recent breakout has failed and the stock wants to re-visit those recent range lows.

To see more stocks with notable insider buying like Westport Innovations ( WPRT), Fuel Systems Solutions ( FSYS) and Puma Biotechnology ( PBYI), 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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