Sonus Networks

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Another stock that insiders are loading up on here is Sonus Networks ( SONS), a provider of voice and multimedia infrastructure solutions, including session border control, Voice over Internet Protocol, access and VoIP media gateway solutions for service providers and enterprises. Insiders are buying this stock into weakness, since shares are off by over 20% so far in 2012.

Sonus Networks has a market cap of $515.17 million and an enterprise value of $171.52 million. This stock trades at a reasonable valuation, with a price-to-sales of 1.95 and a price-to-book of 1.28. Its estimated growth rate for this year is -40%, and for next year it's pegged at 85.7%. This is a cash-rich company, since the total cash position on its balance sheet is $340.85 million and its total debt is zero.

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A beneficial owner just bought 415,919 shares, or about $739,000 worth of stock, at $1.76 to $1.82 per share.

From a technical perspective, SONS is currently trading below both its 50-day and 200-day moving averages, which is bearish. This stock has been stuck in a nasty downtrend for the last six months, with shares dropping from $3 a share to its recent low of $1.56 a share. During that downtrend, shares of SONS have consistently been making lower highs and lower lows, which is bearish technical price action. That said, the stock is now trending close to a near-term breakout trade that could spark a solid move higher.

If you're in the bull camp on SONS, then I would look for long-biased trades once this stock manages to trigger a near-term breakout trade above its 50-day moving average of $1.89 a share, and then above some more resistance at $1.94 a share with high volume. Look for a sustained move or close above those levels with volume that registers near or above its three-month average action of 1,679,030 shares. If that breakout triggers soon, then SONS will have a great chance of re-testing and possibly taking out its next major overhead resistance levels at $2.23 to $2.45 a share.

I would simply avoid SONS if this stock fails to recapture its 50-day moving average of $1.89 a share. If SONS continue to fail at or near its 50-day, then this stock is likely to continue trending lower.

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