Heads Up: Insiders Now Own Nearly 50% of Bruker

NEW YORK (TheStreet) -- Bruker (BRKR) has been getting a lot of insider action lately and may get even more Wednesday, after the Fed meets.

As investors await the so-called "Santa Claus rally", a "steady-as-she goes" stealth rally of sorts has been going on under our noses. Take a look at this 3-month chart of the SPDR Dow Jones Industrial Average ETF ( DIA), which not only shows the price movement but the alarming volume statistics.

DIA Chart DIA data by YCharts

Look at the huge volume spike after the November elections followed by anemic volume ever since. In fact, as the Dow Jones Industrial Average has been rising, the volume has been falling lower. From a technical perspective, that is ominous, especially this time of year.

Now take a look at the Relative Strength Indicator, which appears to be in the overbought area and appears to be breaking down.

The widely used RSI is a momentum oscillator that compares the strength of gains against the strength of losses over a given period. RSI always ranges between 0 and 100. Values below 30 and above 70 are typically taken as oversold and overbought, respectively.

A strengthening RSI indicates that gains are tending to dominate losses. Once the RSI climbs above 70, however, the sustainability of the gains is called into question. With the Fed's quarterly meeting and press conference tomorrow (12:15 p.m. EST, Dec. 12) and the lackluster volume Tuesday, I smell a correction in the wind.

Perhaps that's one of the reasons why the deep-discount retailers like Dollar General ( DG) and Family Dollar ( FDO) fell so much on Tuesday on spectacular volume. Are they the "canaries in the coal mine"?

With the present downside market risk, if you're looking to make a stock purchase, you might want to consider companies where the insiders are piling into shares in an unusually optimistic manner. One such company is Bruker.

This innovative company designs, manufactures, services and sells proprietary life science and materials research systems worldwide. Tuesday shares jumped 2% on almost 50% higher-than-normal volume. One reason is that investors are learning that the CEO Dr. Frank Laukien and two of his relatives who are company directors own a combined total of almost 73,161,000 shares of BRKR.

In fact, the total percentage of the outstanding shares owned by insiders and 5% owners is an astounding 49%! Looking at recent purchases by this elite group since Sept. 14, 2012 (the most recent purchase being last Friday, Dec. 7) I noticed that the Laukiens' purchased 250,000 shares between the price of $13 and Dr. Laukien's purchase on Friday of 50,000 shares at $13.97.

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Bruker had a very profitable quarter ending Sept. 30. Year-over-year quarterly earnings increased by more than 100% and quarterly revenue grew by 7%. Total Cash improved to more than $242 million. Look at the impressive one-year chart of BRKR illustrating its price and trailing 12-month earnings rebound from just six weeks ago.

BRKR Chart BRKR data by YCharts

Considering that Bruker is one of the worlds' leading manufacturers of analytical X-ray systems, atomic force microscopy, optical emission spectrometers and combustion analyzers for materials research, it is no wonder that sales increased by $1.7 billion during the last 12 months.

Its subsidiary Bruker BioSpin is the global leader in analytical magnetic resonance instruments. A division called "Bruker Daltonics" is a leading manufacturer of mass spectrometry instruments for biochemical and pharmaceutical research.

I'd encourage you to visit its colorful and user-friendly Web site and see all the revolutionary ways it is assuming leadership in its fields of expertise.

When it comes to buying shares, investors may want to wait for the next pull back to the $14 level or lower, so that you'll be buying near the same levels at which the insiders have been buying. After tomorrow's big policy announcements by the Federal Reserve and Chairman Bernanke's press conference, you might just have such an opportunity.

As I've been reminding our readers regularly, I'd encourage you to utilize a trailing stop loss and alert system that falls below the "radar screens" of the stock exchange market makers. One such system called "TradeStops" is an intuitive product that will let you know when a trailing stop loss has been hit without having to place a stop-limit or stop-loss order that may attract unwanted "bottom feeders." I use it and have found it very effective and helpful.

It's a good time of year to be buying the shares of companies where the insiders believe in the future of the company so much that they're buying lots of shares themselves. Be patient, though, and use a buy-limit order that makes sense to you. Normally, it's best to never "chase" a stock. Let it come to you.

At the time of publication, the author was long DG, although positions may change at any time.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

Jim Cramer and Stephanie Link actively manage a real money portfolio for his charitable trust- enjoy advance notice of every trade, full access to the portfolio, and deep coverage of the latest economic events and market movements.

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