Corporate insiders sell their own companies' stock for a number of reasons. They might need the cash for a big personal purchase such as a new house, or they might need the cash to fund a charity. Sometimes they sell as part of a planned selling program that they have put in place for diversification purposes.
Insiders, however, usually buy their own shares for one reason only: They think the stock is cheap and has tremendous upside.
Recently, a number of companies' corporate insiders have bought stock. These insiders are finding some value in this market, which warrants a closer look at these names.
One consumer goods player that investors are loading up on here is GNC Holdings (GNC) , which operates as a specialty retailer of health, wellness and performance products.
GNC Holdings has a market cap of $564 million. This stock trades at a fair valuation, with a forward price-to-earnings of 6.4. Its estimated growth rate for this year is -37.2%, and for next year it's pegged at -5.2%. This is not a cash-rich company, since its total cash position is $34.46 million and its total debt is $1.54 billion.
The CEO just bought 592,259 shares, or $5 million worth of stock, at $8 to $8.49 per share.
If you're bullish on GNC Holdings, I would look for long-biased trades as long as this stock is trending above near-term support at $8 or $7.62 a share, then once it breaks out above resistance, at $9 to $9.23 a share, with volume near or above its three-month average of 3.3 million shares. Some possible upside targets are its next major resistance levels at its 20-day of $9.83 or $10.30 to $11 a share.