One of my favorite strategies in investing is to align myself with insiders. Stocks with good growth prospects, reasonable valuations and strong insider buying intrigue me. One equity that meets these criteria that I recently came across is Pinnacle Entertainment (PNK).
7 reasons Pinnacle has more upside at just under $11 a share:
- Insiders have purchased over 300,000 net shares over the last eight months.
- The company has crushed earnings estimates for four straight quarters and consensus estimates for FY2012 and FY2013 have gone up over the past two months.
- The market seems to be discounting company's growth prospects given it has a five year projected PEG of under 1 (.8).
- The stock is significantly under analysts' price targets. The consensus price target by the 17 analysts that cover the stock is $15 a share.
- The stock has a forward PE of under 14, which is an over 60% discount to its historical average.
- The company is projected to grow revenues in the high single digits over the next two years. It has a large new casino hotel coming online in Baton Rouge this summer and owns a 26% interest in a large destination resort complex in fast growing Vietnam, which it also will operate.
- The stock has long term technical support at $9 a share and recently crossed its 100 day moving average (See Chart).
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in PNK over the next 72 hours.